Final Results

RNS Number : 4118U
Webis Holdings PLC
15 October 2010
 



15 October 2010

 

WEBIS HOLDINGS PLC

("Webis" or "the Group")

PRELIMINARY RESULTS FOR THE 52 WEEK PERIOD ENDED 30 MAY 2010

 

 

Webis Holdings plc, the global on-line gaming group, today announces its preliminary results for the period.

 

Summary:

 

·         

Loss for the period of £337,000 (2009: profit of £452,000)

 

·         

EBITDA loss of £37,000 (2009: £757,000 profit)

 

·         

Group turnover of £114.2m (2009: £140.1m)

 

·         

betinternet.com sportsbook turnover decreased by 26.6% to £79.2m (2009: £107.9m)

 

·         

European Wagering Services pari-mutuel turnover grew by 8% to £35.0m (2009: £32.3m)

 

 

 

Commenting on the results, Denham Eke, Chairman of Webis Holdings plc, said: "Overall, it has been a difficult year for the Group, with numerous challenges. However, the majority of these issues have been resolved and the future of EWS has gained a clear direction as a result of our US acquisition. We are now committed to establishing a clear strategy for the sportsbook and the Board is confident of a successful year ahead".

 

 

ENDS

 

 

For further information:

 


Webis Holdings plc

Tel: 01624 698141

Garry Knowles, Managing Director


Damon Waddington, Finance Director






Evolution Securities

Tel: 0113 2431619

Joanne Lake/Peter Steel

 


 

 

Notes to editors:

 

The following are attached:

 

Chairman's Statement

Consolidated Income Statement

Consolidated Balance Sheet

Statement of Changes in Shareholders' Equity

Consolidated Cash Flow Statement

Notes to the Accounts

 

 

 

Chairman's Statement

 

Introduction

 

Despite an encouraging performance from the Group's pari-mutuel platform, European Wagering Services Limited ("EWS"), the consolidated results for the financial year ended 30 May 2010 were affected, as previously notified, by a disappointing year for the betinternet.com (IOM) Limited sportsbook ("betinternet"). Consolidated turnover reduced to £114 million (2009: £140 million) and the Group recorded an operating loss of £315,000 (2009: £475,000 profit). 

 

European Wagering Services Limited

 

EWS generated an increase in turnover to £35.0 million (2009: £32.3 million) despite the global decline in pool betting due to the lasting effects of the economic downturn. This continues to impact the horse and greyhound racing industry in the United States, EWS's principal market. The largest area of growth came from the EWS website, www.link2bet.com. We continued to make enhancements to the site during the year, which have helped us to recruit new lower-staking, higher margin customers and, in turn, improved business mix.

 

The margin for our B2B business reduced slightly as a result of increased competition and EWS also incurred a foreign exchange loss of £18,000 (2009: £123,000 profit). These factors were, however, partly offset by the increase in website traffic and EWS recorded a pre tax profit of £464,000 (2009: £531,000).

 

The Board's strategy for EWS during the year was focused on obtaining an increase in quality racing content and establishing a presence in the US. As previously notified, we recently secured a US pari-mutuel hub operating licence with the North Dakota Racing Commission, which will enable the business to conduct pari-mutuel account deposit wagering in the US, subject to state by state legislation. The establishment of a presence in the US is a significant move forward for EWS, which will enhance the opportunity to secure further US racetrack content in the near future and provide the business with greater credibility in its markets.

 

betinternet.com (IOM) Limited

 

betinternet generated turnover of £79.2 million (2009: £107.9 million), recording a pre-tax loss of £778,000 (2009: £41,000 loss). The business suffered a number of setbacks during the financial year, again largely related to the ongoing effects of the economic downturn.

 

Within our casino and games offerings, many high-roller players dropped away, resulting in a sizable reduction in turnover and margin against the prior year. The fixed-odds element of the sportsbook also underperformed, with a reduction in the gross margin due to a number of issues. Firstly, our affiliates' referral scheme became loss-making. We have taken action to correct this and the scheme has since returned to profitability. Secondly, football betting was impacted by an unusual lack of draws during the early stages of the 2009/10 English Premiership season. Finally, the margin generated by our horse racing offering, which accounts for a significant proportion of the sportsbook's total turnover, remains highly volatile.

 

As a result of these issues and the increased level of competition and regulation within this area, the Board has decided to review its sportsbook strategy. This review is currently ongoing and, once completed, the Board will provide shareholders with an update.

 

Overview of Group Results

 

The consolidated results for the financial year ended 30 May 2010 show Group turnover reduced to £114 million (2009: £140 million) and gross profit reduced by 24% to £2.6 million (2009: £3.4 million). The gross margin reduced to 2.25% (2009: 2.43%).

 

The Group recorded a loss before interest, tax, depreciation and amortisation of £37,000 (2009: £757,000 profit) and an operating loss of £315,000 (2009: £475,000 profit).

 

Operating expenses remained broadly in line with last year at £2.7 million (2009: £2.6 million). As anticipated, we reduced our accommodation costs following the expiry of our leases. However, the Group incurred a foreign exchange loss as sterling increased in value against other global currencies, particularly the US dollar, within the financial year.

 

Share premium account

 

The Board received approval at last year's annual general meeting to apply for court approval to cancel the share premium account. In light of the losses incurred during the year, the Board has decided to postpone the application for the time being and will revisit this in due course.

 

Staff

 

I am, as always, grateful to the executive and staff of Webis for their continued contribution and ability to adapt to the ever-changing industry in which we operate.

 

Summary

 

Whilst betinternet's performance has been disappointing, it has highlighted the competitive environment in which the sportsbook operates. As such, the Board has committed to reviewing its strategy for this part of our business in order to ensure that the implementation of our strategy for EWS is not hindered as a result.

 

Subsequent events

 

As has happened to many businesses within the wagering sector, the Group's bankers have recently withdrawn payment processing services. We immediately implemented a temporary payment solution pending the  development of a permanent solution for EWS and betinternet with alternative providers.

 

In the case of EWS, the acquisition of the US license will greatly assist in stabilising payment solutions for the business in the near future. Once we have established new payment methods, we intend to implement a development and marketing strategy in the US, which is currently in the advanced planning stage.

 

Encouragingly, betinternet enjoyed a successful World Cup and the subsequent start of the football season is showing more favourable results compared with the same period in 2009. The Real Time Gaming Casino has been replaced by an improved turnkey solution from CTXM, a well-established provider of gaming services. This will enable us to incorporate a Poker game on the website for the first time before the year end.

 

Overall, it has been a difficult year for the Group, with numerous challenges. However, the majority of these issues have been resolved and the future of EWS has gained a clear direction as a result of our US acquisition. We are now committed to establishing a clear strategy for the sportsbook and the Board is confident of a successful year ahead.

 

 

 

Denham Eke

Chairman

 

 

 

Webis Holdings plc

Consolidated Statement of Comprehensive Income

for the Period ended 30 May 2010

 


Note



2010

2009





£000

 

£000

 

Turnover

2



114,167 

140,149 

Cost of sales




(111,519)

(136,718)

Betting duty paid




(30)

(33)





----------

 

----------

Gross Profit




2,618 

 

3,398 

Administration expenses




(2,655)

(2,641)





----------

----------

 

Earnings before interest, tax, depreciation and amortisation

(37)

757 

Depreciation and amortisation




(255)

(247)

Share based costs




(23)

(35)





----------

----------

Total operating (loss) / profit


(315)

 

475 

Net finance costs

4



(22)

(23)

Tax

5







----------

----------

(Loss) / profit for the period




(337)

452





----------

----------

Basic (loss) / profit per share (pence)


(0.16) 

0.22

Diluted (loss) / profit per share (pence)


(0.16) 

0.21





----------

----------

 

 

Webis Holdings plc

Consolidated Statement of Financial Position

As at 30 May 2010

 


Note



2010

2009





£000

£000

Non-current assets






Intangible assets - goodwill

7



43 

43 

Intangible assets - other

8



311 

295 

Property and equipment

9



75 

110 

Investments








----------

----------





429 

 

448 

 

Current assets






Trade and other receivables




834 

713 

Cash and cash equivalents




999 

1,502 





----------

----------

Total assets




1,833 

 

2,215 

 

Current liabilities






Bank overdraft




(295)

(205)

Trade and other payables




(1,287)

(1,464)

Convertible loan notes




(300)





----------

----------





(1,882)

 

(1,669)

 

Non-current liabilities






Convertible loan notes




(300)





----------

 

----------

 

Total liabilities




(1,882)

(1,969)





----------

 

----------

 

Net assets




380 

694 





----------

 

----------

 

Shareholders' equity






Called up share capital




2,068 

2,068 

Share premium account




9,927 

9,927 

Share option reserve




107 

84 

Profit and loss account




(11,722)

 

(11,385)

 





----------

----------

Total shareholders' equity




380 

694 





----------

----------

 

 

Webis Holdings plc

Statement of Changes in Shareholders' Equity

for the Period ended 30 May 2010

 


Called

up

share

capital

 

 

Share

premium

 

Share

option

reserve

 

 

Retained

earnings

 

Total

shareholders'

equity


£000

 

£000

 

£000

 

£000

 

£000

 

Balance as at 25 May 2008

2,068 

9,927 

49 

(11,837)

207 

Share based payments - share options

35 

35 

Profit for the Period

452 

452 


----------

----------

----------

----------

----------

Balance as at 31 May 2009

2,068 

9,927 

84 

(11,385)

694 

 

Share based payments - share options

23 

23 

Loss for the Period

(337)

(337)


----------

----------

----------

----------

----------

Balance as at 30 May 2010

2,068 

9,927 

107 

(11,722)

380 


----------

----------

----------

----------

----------

 

 

Webis Holdings plc

Consolidated Statement of Cash Flows

for the Period ended 30 May 2010

 




2010

2009




£000

 

£000

 

Net cash (outflow) / inflow from operating activities

 


(335)

663 

 

Cash flows from investing activities





Interest received



Purchase of intangible assets



(211)

(236)

Purchase of property, plant & equipment



(25)

(66)




----------

----------

Net cash outflow from investing activities


(236)

 

(295)

 

Cash flows from financing activities





Issue of equity shares



Interest paid



(22)

(30)




----------

----------

Net cash outflow from financing activities



(22)

(30)

Net (decrease) / increase in cash and cash equivalents


(593)

338 

Cash and cash equivalents at beginning of period



1,297 

959 




----------

----------

Net cash and cash equivalents at end of period

704 

1,297 




----------

----------

Cash and cash equivalents comprise





Cash and deposits



999 

1,502 

Bank overdraft



(295)

(205)




----------

----------




704 

1,297 




----------

----------

Cash generated from operations





(Loss) / profit from operations



(315)

475 

Adjusted for:





Depreciation and amortisation



255 

247 

Share based payment charge



23 

35 

Increase in receivables



(121)

(66)

Decrease in payables



(177)

(28)




----------

----------

Net cash (outflow) / inflow from operating activities



(335)

663 




----------

----------

 

 

Webis Holdings plc

Notes to the Consolidated Financial Statements

For the Period ended 30 May 2010

 

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 30 May 2010 consolidate those of the Company and its subsidiaries (together referred to as "the Group").

 


The preliminary announcement does not constitute the Group's statutory financial statements. It is an extract from the financial statements for the Period ended 30 May 2010 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 adopted by the International Accounting Standards Board ("IASB").

 

(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.

 


The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

 


Certain comparative amounts have been reclassified to conform with the current year's presentation.

 

 

 

2

Segmental Analysis

Period ended 30 May 2010





2010

2009





£000

£000


Turnover






Sportsbook


Asia Pacific

54,476 

80,682 




UK & Ireland

13,656 

9,228 




Europe

9,738 

11,404 




Rest of the World

1,332 

6,557 


Pari-mutuel


United States

18,788 

13,742 




Caribbean

16,177 

18,536 





----------

----------





114,167 

140,149 





----------

----------

 


Profit / (loss) before tax






Sportsbook



(778)

(41)


Pari-mutuel



464 

531 


Group



(23)

(38)





----------

----------





(337)

452 





----------

----------

 


Net assets






Sportsbook



(757)

21 


Pari-mutuel



1,579 

1,115 


Group



(442)

(442)





----------

----------





380 

694 





----------

----------

 

3

Share based costs

 









2010

£000

 

2009

£000

 


Share options



23 

35 





----------

----------





23 

35 





----------

----------

 

 

 








4

Net finance costs

 









2010

2009





£000

 

£000

 


Bank interest receivable







----------

----------









----------

----------


Bank interest payable



(4)

(7)


Loan interest payable



(18)

(23)





----------

----------





(22)

(30)





----------

----------


Net finance costs



(22)

(23)





----------

 

----------

 

5

Tax on profit on ordinary activities

 


No provision for taxation is required for either the current or previous periods, due to the zero per cent corporate tax regime in the Isle of Man. Unprovided deferred tax was £nil (2009: £nil).

 

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 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.

 





2010

2009





£000

 

£000

 


(Loss) / profit for the Period



(337)

452





----------

 

----------





No.

No.

 


Weighted average number of ordinary shares in issue

206,826,667 

206,826,667 


Diluted number of ordinary shares



226,498,798 

226,498,798 

 


Basic (loss)/profit per share



(0.16) 

0.22 


Diluted (loss)/profit per share



(0.16) 

0.21 

 

7

Intangible assets - Goodwill

 






Goodwill






£000


Cost






Balance at 31 May 2009




43 


Additions during the period









----------


Balance at 30 May 2010




43 






----------


Amortisation and impairment






At 31 May 2009





Amortisation for the period







----------


At 30 May 2010









----------


Net Book Value






At 31 May 2009 and 30 May 2010




43 






----------

 

 

8

Intangible assets - Other

 










Software &

Development

Costs






£000


Cost






Balance at 31 May 2009




2,306 


Additions during the period




211 






----------


Balance at 30 May 2010




2,517 






----------


Amortisation and impairment






At 31 May 2009




2,011 


Amortisation for the period




195 






----------


At 30 May 2010




2,206 

 


Net Book Value




----------


At 30 May 2010




311 






----------


At 31 May 2009




295 






----------

 

9

Property and equipment

 








Computer

equipment

Fixtures &

fittings

 

Total




£000

£000

£000


Cost






At 31 May 2009


1,216 

281 

1,497 


Additions


25 

25 




----------

----------

----------


At 30 May 2010


1,241 

281

1,522 




----------

----------

----------


Depreciation






At 31 May 2009


1,132 

255 

1,387 


Charge for the period


47 

13 

60 




----------

----------

----------


At 30 May 2010


1,179 

268 

1,447 




----------

----------

----------


Net Book Value






At 30 May 2010


62 

13 

75 




----------

----------

----------


At 31 May 2009


84 

26 

110 




----------

----------

----------

 

10

Approval of financial statements

 


The financial statements were approved by the Board on 15 October 2010. The Annual Report is expected to be posted to shareholders on 20 October 2010 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:

Evolution Securities, Kings House, 1 Kings Street, Leeds LS1 2HH.

 

 


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