Report and Accounts for 52 weeks to 31 May 2013

RNS Number : 4793R
Webis Holdings PLC
28 October 2013
 



FOR IMMEDIATE RELEASE

28 October 2013

 

WEBIS HOLDINGS PLC

("Webis" or "the Group")

 

 

Report and accounts for the 52 week period ended 31 May 2013

 

 

Webis Holdings plc, the global gaming group, today announces its audited results for the period.

 

Operating Highlights

 

·      Turnover has increased by 48.3% to £168.64 million (2012: £113.75 million)

 

·      Gross profit has increased by 70.9% to £5.44 million (2012: £3.18 million)

 

·      Total comprehensive profit has increased to £0.355 million (2012: loss of £0.041 million)

 

·      Basic earnings per share have increased to 0.11 pence (2012: negative 0.02 pence)

 

·      Gross margin has improved by 14.3% to 3.2% (2012: 2.8%)

 

·      Net assets have increased by 424.2% to £3.11 million (2012: £0.59 million)

 

·      Company Cash has increased by 131.1% to £2.59 million (2012: £1.07 million)

 

·      Successful fundraising generated £0.8 million

 

·      Successful first season at Cal Expo, California beating internal forecasts

 

 

Commenting on the results, Denham Eke, Chairman of Webis Holdings plc, said: "The Group has achieved a full year Total Comprehensive Profit: the first since 2009. We have consistently achieved good advances within both of our gaming subsidiaries: WatchandWager.com Limited (WatchandWager) and betinternet.com (IOM) Limited (betinternet). This follows our continued enhancement of customer-facing website content and the recruitment of more experienced industry personnel".

 

The Audited Annual Report and Accounts will be posted to shareholders and will also be available from the Company's website, www.webisholdingsplc.com.

 

 

ENDS

 

 

For further information:

 


Webis Holdings plc

Tel: 01624 698141

Garry Knowles, Managing Director






Beaumont Cornish Limited

Tel: 020 7628 3396

Roland Cornish

 


Britton Public Relations

Tim Blackstone

Tel: 07957 140416

 

 

 

 

 

Chairman's Statement

 

Introduction

I am very pleased to report the results for the financial year to the end of May 2013. The Group has achieved a full year Total Comprehensive Profit: the first since 2009. We have consistently achieved good advances within both of our gaming subsidiaries: WatchandWager.com Limited (WatchandWager) and betinternet.com (IOM) Limited (betinternet). This follows our continued enhancement of customer-facing website content and the recruitment of more experienced industry personnel.

 

We have also successfully completed our first full harness racing season at the Cal Expo racetrack in Sacramento, California. Our investment in this activity is extremely important for the furtherance of our United States strategy, especially given the current momentum for state-by-state changes to gaming legislation.

 

Year End Results Review

Group turnover for the period was £168.64 million (2012: £113.75 million), up by 48.3%. Gross profit increased to £5.44 million (2012: £3.18 million), up by 70.9%. Importantly, overall gross margin increased to 3.2% (2012: 2.8%).

 

Operating expenses increased to £5.072 million (2012: £3.19 million), up by 59.1%. The majority of the increase in expenses was attributable to the licence acquisition and continuing operational costs for Cal Expo, which totalled £1.54 million (2012: £Nil).

 

As a consequence, Total Comprehensive Profit improved to £0.355 million (2012: loss of £0.041 million), our first positive outcome since 2009.

 

Shareholder equity has increased to £3.114 million (2012: £0.594 million). Following a successful fund raising of £0.8 million in January 2013, total Cash stands at £5.114 million (2012: £2.683 million), up 90.6%, including a ring-fenced amount of £2.64 million (2012: £1.61 million) to protect the player liability as required by Isle of Man gambling legislation.

 

Our Pari-mutuel turnover increased to £33.78 million (2012: £30.66 million), with Profit before tax at £0.11 million (2012: £0.17 million).  Racetrack Operations generated turnover of £37.90 million (2012: £Nil), with Loss before tax at £0.001 million (2012: £Nil).

 

Our Sportsbook turnover increased to £96.96 million (2012: £83.09 million), with Profit before tax at £0.25 million (2012: loss of £0.21 million).

 

WatchandWager.com

WatchandWager (formerly European Wagering Services), our tote betting and racetrack operation overall performed well, despite some challenging trading conditions. As previously reported, we suffered card payment provider issues in the second quarter of the year, which impacted on player numbers. These issues have largely been resolved with the introduction of different payment methods and player numbers at the end of the financial year have been restored to previous levels across the platform. We saw a gradual improvement in performance of our wagering platform in the second half of the year, and this was assisted by a generally strong performance by Cal Expo harness racing during that period.

 

In the last quarter, we launched our new watchandwager.com website and we have commenced the process of migrating our US resident customers to this website from link2bet.com. We expect that the majority of our player base will be utilising our new website as their preferred choice for wagering within the first half of the new financial year.

 

Our first season of harness racing at Cal Expo finished in May 2013 and it has proven to be an exciting period, with our 'bricks and mortar' presence providing us with some strong leverage, and greater recognition, throughout the US industry. This has assisted us in obtaining more racing content for international customers from the Churchill Downs and Monarch simulcast and media controlled racetracks and we are now able to accept wagers at some of the most prestigious race meetings in the US. We have also been granted access to the French PMU and the Swedish ATG betting pools, with the latter proving particularly popular with our client base.

 

Cal Expo broke-even within the financial year, which was ahead of our expectations, originally to be at the completion of the first full contractual year in September 2013. We amended the racing program during the season to support our overall plan of fewer race dates with larger field sizes, backed by good TV exposure, which proved successful. Like-for-like turnover, from all sources, wagering on Cal Expo harness racing was up by 26% on the previous year, by the end of the season. Importantly, we continue to receive income from Cal Expo during the close season through a share of the activity at the other Californian racetracks.

 

betinternet.com

Our betinternet sportsbook has seen a marked change in its performance and profitability over the course of the year, particularly in the second half, where turnover and margin levels have increased significantly. Our sportsbook fixed-odds margin increased by 1.03% to 3.75%; well ahead of our expectations. betinternet increased expenditure on 'In Play' products, data and pricing feeds, particularly for Tennis, Basketball and Golf.  This, together with a number of favourable sports results, has been responsible for the majority of this success.

 

For the full year, turnover on our 'In Play' content increased to 57% (2012: 43%) of our total fixed odds turnover on single bets, with this percentage reaching over 80% during some individual weeks towards the end of the period. This highlights the importance of the work that our in-house development team have undertaken on our 'In Play' product. We remain committed to further investing in this part of our business and have entered into long-term contracts with established data and pricing providers to assist with continued growth in this area.

 

Casino and games turnover also increased although the margin achieved was lower than expected due to some previously reported large wins. Full-year Live Dealer Casino activity was impacted as this product was unavailable for a six-week period in the early part of the second half whilst we sourced a new provider following the closure of our previous supplier without any notice. We have also increased our Customer Relationship Management (CRM) to help get the best return from our marketing expenditure, aimed particularly at casino and games customers who are more reactive to marketing offers than sports betting customers, who are generally event driven.

 

Our mobile sportsbook has seen growth throughout the year and we plan to focus on enhancements to our mobile offering for all channels in the forthcoming year.

 

Regulatory developments

The board remains aware of proposed regulatory changes within some of the jurisdictions where we currently accept customers. We are seeking informed updates on any changes to gaming legislation and the board will make decisions on a case-by-case basis as to where we choose to operate or seek suitable licences, centred on an opportunity versus cost basis. It is likely that we will see increases in licencing fees and betting taxes in forthcoming years, but the online gaming industry has proved strongly resilient to the multiple challenges that it has encountered since its inception. We will update shareholders as appropriate on any developments in this area.

 

 

 

Post Year and Strategy

The board remains committed to further investing in both operations to build on the achievements that we have seen in the period. As previously announced WatchandWager was approved for an Advanced Deposit Wagering (ADW) licence by the California Horse Racing Board (CHRB) on 19th July. This licence is now operational and allows us to take wagers from, and market to, Californian residents on content for which we have the Horsemen's agreement. We are currently working with the key industry participants to secure these agreements, and it is anticipated that holding this licence, together with our existing licence to operate harness racing at Cal Expo, will put us in a better strategic position for any further changes to gaming legislation within the state of California.

 

Our CHRB licence to operate harness racing at Cal Expo was formally approved in August 2013, in advance of planned live racing from October 2013 to May 2014. Both our California Horse Racing and ADW licences for 2014 remain subject to formal approval by the CHRB before the end of 2013, but we expect both licences to be approved. In addition, we anticipate the North Dakota Racing Commission to approve our multi-jurisdiction ADW Service Provider licence for 2014, in November 2013. 

 

We plan to invest in marketing our new watchandwager.com website directly within those US states where it is currently legal to do so. Our anticipation is that our wide variety of racing content, coupled with an intuitive betting interface will be an attractive proposition for the recruitment of higher-margin 'leisure' players. To help implement our US strategy, we have recruited two new senior employees for the roles of Vice President US Operations and Vice President US Finance & Compliance, who have joined our existing team in our San Francisco office.

 

We added Quickfire Poker to betinternet in June, available via a specific channel tab from anywhere within the website. Our customers will now have access to the strong liquidity of the MPN (formerly Microgaming Poker Network) using their single sportsbook wallet.

 

The update of the 'look-and-feel' of the betinternet website was completed slightly later than planned in August. The new website presents more of our 'In Play' content to our customers and allows for a dynamic resizing based on the users' screen resolution.

 

We have also added further In Play content with the roll-out of Volleyball, Handball, American Football and Baseball. We will continue to increase our In Play offering so that there is live content available for our clients to bet on for most of each day.

 

Outlook

The board is pleased with our achievements thus far, and remains enthused by the opportunities that lie ahead. Both of our operating subsidiaries are now in much healthier positions, with more robust platforms and focused experienced personnel. With a strong balance sheet and the opportunity to invest further in our products, we anticipate the continuation of our growth strategies will be more rewarding in the forthcoming year. We remain very close to the US regulatory changes and are confident that our online licencing and land-based presence at Cal Expo positions us well for any positive amendments to legislation, particularly within California.

 

Finally, I would like offer my thanks to all of our shareholders for their continued support and to all of our staff in the Isle of Man and the United States for their efforts and dedication throughout the year.

 

 

Denham Eke

Chairman

 

 

Webis Holdings plc

Consolidated Statement of Comprehensive Income

For the period ended 31 May 2013

 


Note



2013

2012





£000

 

£000

 

Turnover

2



168,642 

113,751 

Cost of sales




(163,091)

(110,531)

Betting duty paid




(115)

(40)





----------

 

----------

Gross Profit




5,436 

 

3,180 

Personnel expenses




(1,114)

(1,137)

Technology costs




(431)

(334)

Other expenses




(1,861)

(1,528)

Racetrack operating costs




(1,536)

-

Depreciation and amortisation




(130)

(189)





----------

----------

 

Results from operating activities

364 

(8)

Share-based payment expense

3







----------

----------

Total operating profit/(loss)


364

 

(8)

Net finance costs

4



(9)

(33)

Taxation

5







----------

----------

Total comprehensive profit/(loss) for the period attributable to owners




355

(41)





----------

----------

Basic and diluted earnings/(loss) per share (pence)


0.11

(0.02)





----------

----------

 

Webis Holdings plc

Consolidated Statement of Financial Position

As at 31 May 2013

 


Note



2013

2012





£000

£000

Non-current assets






Intangible assets - goodwill

7



111 

111 

Intangible assets - other

8



193 

194 

Property, equipment and motor vehicles

9



96 

31 

Bonds and deposits




135 





----------

----------

Total non-current assets




535 

 

336 

 

Current assets






Trade and other receivables




1,255 

621 

Cash and cash equivalents - company funds




2,475 

1,071 

Cash and cash equivalents - protected player funds




2,639 

1,612 





----------

----------

Total current assets




6,369

 

3,304 

 

Current liabilities






Trade and other payables




(3,765)

(3,046)

Bank loans




(15)

-





----------

----------

Total current liabilities




(3,780)

 

(3,046)

 





----------

----------

Non-current liabilities






Bank loans




(10)

-

Total liabilities




(3,790)

(3,046)





----------

----------

Net assets




3,114 

594 





----------

 

----------

 

Equity






Called up share capital




3,933 

2,302 

Share premium account




10,583 

10,049 

Share option reserve




116 

116 

Retained losses




(11,518)

 

(11,873)

 





----------

----------

Total equity




3,114 

594 





----------

----------

 

 

 

Webis Holdings plc

Statement of Changes in Shareholders' Equity

For the period ended 31 May 2013

 


Called

up

share

capital

 

 

Share

premium

 

Share

option

reserve

 

 

Retained

earnings

 

Total

shareholders'

equity


£000

 

£000

 

£000

 

£000

 

£000

 

Balance as at 29 May 2011

2,302 

10,049 

116

(11,832)

635 

Total Comprehensive loss for the period

(41)

(41)

Transactions with owners






Arising on shares issued in the year

Share-based payment expense


----------

----------

----------

----------

----------

Balance as at 27 May 2012

2,302 

10,049 

116 

(11,873)

594 

 

Total Comprehensive loss for the period

355

355 

Transactions with owners






Arising on shares issued in the year

1,631 

534 

2,165 

Share-based payment expense


----------

----------

----------

----------

----------

Balance as at 31 May 2013

3,933 

10,583 

116 

(11,518)

3,114 


----------

----------

----------

----------

----------

 

 

 

Webis Holdings plc

Consolidated Statement of Cash Flows

For the period ended 31 May 2013

 

 




2013

2012

 




£000

 

£000

 

 

Net cash inflow from operating activities

 


1,634 

1,396

 

Cash flows from investing activities





 

Interest received



12 

10 

 

Purchase of intangible assets



(102)

(126)

 

Purchase of property, equipment and motor vehicles



(92)

(24)

 




----------

----------

 

Net cash outflow from investing activities


(182)

 

(140)

 

Cash flows from financing activities





Interest paid



(21)

(43)

Loan financing received from Bank



25 

Loan financing received from Burnbrae Ltd



175 

Issue of equity shares



800 




----------

----------

Net cash inflow/(outflow) from financing activities



979 

            (43)

Net increase in cash and cash equivalents



2,431 

          1,213

Cash and cash equivalents at beginning of period



2,683 

1,470 




----------

----------

Net cash and cash equivalents at end of period



5,114 

2,683 




----------

----------

Cash and cash equivalents comprise





Cash and deposits



5,114 

2,683 




----------

----------




5,114 

2,683 




----------

----------

Cash generated from operations





Profit/(loss) from operations



364 

(8)

Adjusted for:





Depreciation and amortisation



130 

190 

Share-based payment expense



(Increase)/decrease in receivables



(769)

217

Increase in payables



1,909 

997




----------

----------

Net cash inflow from operating activities



1,634 

1,396




----------

----------

 

 

 

Webis Holdings plc

Notes to the Financial Statements

For the period ended 31 May 2013

 

1

Reporting entity

 


Webis Holdings plc is a company domiciled in the Isle of Man. The address of the Company's registered office is Viking House, Nelson Street, Douglas, Isle of Man, IM1 2AH.

 


The Group's consolidated financial statements as at and for the period ended 31 May 2013 consolidate those of the Company and its subsidiaries (together referred to as "the Group").

 


The announcement does not constitute the Group's statutory financial statements. It is an extract from the financial statements for the period ended 31 May 2013 which have not yet been filed.

 

1.1

Basis of preparation

 

(a)

Statement of compliance


The financial information included in this announcement has been extracted from the Group's consolidated financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") and its interpretations as adopted by the European Union.

 

(b)

Basis of measurement and functional currency


The Group consolidated financial statements are presented in Pounds Sterling, rounded to the nearest thousand. They are prepared under the historical cost convention except where assets and liabilities are required to be stated at their fair value.

 

(c)

Use of estimates and judgement


The preparation of Group financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Although these estimates are based on management's best knowledge and experience of current events and expected economic conditions, actual results may differ from these estimates.

 


The directors believe the assumptions used in the model to calculate the fair value of the share based payments are the most appropriate for the Group.

 

 

 

2

Segmental Analysis

 





2013

2012





£000

£000


Turnover






Sportsbook


Asia Pacific

77,056 

67,001 




UK & Ireland

10,833 

10,360 




Europe

7,246 

4,684 




Rest of the World

1,828 

1,042 


Pari-mutuel and Racetrack Operations


United States

54,820 

17,119 




Caribbean

9,901 

8,921 




Asia Pacific

6,419 

4,624 




UK & Ireland

399 




Rest of the World

140 











----------

----------





168,642 

113,751 





----------

----------

 


Profit/(loss) before tax






Sportsbook



247 

(214)


Pari-mutuel and Racetrack Operations



108 

173 


Group



-

-





----------

----------





355

(41)





----------

----------

 


Net assets






Sportsbook



(723)

(970)


Pari-mutuel and Racetrack Operations



1,758 

1,650 


Group



2,079 

(86)





----------

----------





3,114 

594 





----------

----------

 

3

Share-based payment expense

 









2013

£000

 

2012

£000

 


Share options







----------

----------









----------

----------

 

 

 








4

Net finance costs

 









2013

2012





£000

 

£000

 


Bank interest receivable



12 

10 





----------

----------





12 

10 





----------

----------


Bank interest payable



(1) 

-


Loan interest payable



(20) 

(43)





----------

----------





(21)

(43)





----------

----------


Net finance costs



(9)

(43)





----------

 

----------

 







5

Taxation









2013

2012





£000

 

£000

 


Profits/(losses) before tax



355

(41)


Tax charge at IOM standard rate (0%)



-

-


Adjusted for:






Tax credit for US tax losses (at 15%)



(21)

(22)


Add back deferred tax losses not recognised



21

22





----------

----------


Tax charge for the year



-

-





----------

----------







6

Earnings per ordinary share

 


The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

 

The calculation of the diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares, on the assumed conversion of all dilutive share options.

 

An adjustment for the dilutive effect of share options and convertible debt in the previous period has not been reflected in the calculation of the diluted loss per share, as the effect would have been anti-dilutive.

 





2013

2012





£000

 

£000

 


Profit/(loss) for the period



355

(41)





----------

 

----------





No.

No.

 


Weighted average number of ordinary shares in issue

330,148,762 

230,171,644 


Diluted number of ordinary shares



344,148,762 

230,171,644 

 


Basic earnings/(loss) per share (pence)



0.11 

(0.02)


Diluted earnings/(loss) per share (pence)



0.11 

(0.02)

 

7

Intangible assets - goodwill

 






Goodwill






£000


Cost






Balance at 27 May 2012




111 


Additions during the period









----------


Balance at 31 May 2013




111 






----------


Amortisation and impairment






At 27 May 2012





Amortisation for the period







----------


At 31 May 2013











Net Book Value




----------


At 31 May 2013




111 






----------


At 27 May 2012




111 






----------

 

The goodwill relates to the acquisition of the pari-mutuel business which is both a cash generating unit and a reportable segment, including goodwill arising on the acquisition in 2010 of WatchandWager.com LLC, a US registered entity licenced for pari-mutuel wagering in North Dakota.

 

The Group tests intangible assets annually for impairment, or more frequently if there are indications that the intangible assets may be impaired.  The recoverable amount of goodwill on both pari-mutuel business units has been determined based on a value in use calculation using cash flow projections based on financial budgets approved by the Directors.

 

The key assumptions on which the Directors have based their three year discounted cash flow analysis are a pre-tax discount rate of 15% and growth rate in pari-mutuel business of 2%.  The assumption of growth rate in pari-mutuel business has been based on the historic performance of the business as well as forecast performance based on the Board's plan to invest further in this business.  In respect of the value in use calculations, cash flows have been considered for both the conservative and the full forecast potential of future cash flows with no impact to the valuation of goodwill.

 

 

8

Intangible assets - other

 










Software &

Development

Costs






£000


Cost






Balance at 27 May 2012




2,758 


Additions during the period




102 






----------


Balance at 31 May 2013




2,860 






----------


Amortisation and impairment






At 27 May 2012




2,564 


Amortisation for the period




103 






----------


At 31 May 2013




2,667 

 


Net Book Value




----------


At 31 May 2013




193 






----------


At 27 May 2012




194 






----------

 

9

Property, equipment and motor vehicles

 







Computer

equipment

Fixtures &

fittings

Company Car

 

Total



£000

£000

£000

£000


Cost






At 27 May 2012

1,256 

285 

17 

1,558 


Additions

71 

16 

92 



----------

----------

----------

----------


At 31 May 2013

1,327 

301

22

1,650 



----------

----------

----------

----------


Depreciation






At 27 May 2012

1,244 

282 

1,527 


Charge for the period

16 

27 



----------

----------

----------

----------


At 31 May 2013

1,260 

287 

1,554 



----------

----------

----------

----------


Net Book Value






At 31 May 2013

67 

14 

15 

96 



----------

----------

----------

----------


At 27 May 2012

12 

16 

31 



----------

----------

----------

----------

 

10

Approval of financial statements

 


The financial statements were approved by the Board on 25 October 2013. The Annual Report is expected to be posted to shareholders on 1 November 2013 and will be available from that date at the Group's Registered Office: Viking House, Nelson Street, Douglas, Isle of Man IM1 2AH. A copy of the Annual Report will also be made available on the Group's website www.webisholdingsplc.com.

 


The Group's nominated advisor and broker is:

Beaumont Cornish Limited, 2nd Floor, Bowman House, 29 Wilson Street, London EC2M 2SJ

 

 

Notes to editors:

 

The following are attached:

 

Chairman's Statement

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Statement of Changes in Shareholders' Equity

Consolidated Statement of Cash Flows

Notes to the Financial Statements

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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