Webis Regulatory News (WEB)

27 Feb 2006 15:51

betinternet.com PLC27 February 2006 FOR IMMEDIATE RELEASE27 February 2006 BETINTERNET.COM PLC ("the company" or "betinternet") INTERIM RESULTS FOR THE 26 WEEKS ENDED 27 NOVEMBER 2005 betinternet.com plc, the global on-line gaming group, today announces interimresults for the 26 weeks ended 27 November 2005. Highlights of the results are: • Group turnover has fallen by 39% to £28.50m (2004: £47.06m) due to the previously announced cessation of activity of IPA • European Wagering Services (EWS) pari-mutuel business showing signs of new growth after last year's setback • Financing in place to allow for business development. £1.6m (gross) received after period end • EBITDA loss of £0.6m (2004: loss of £0.18m) • New sportsbook platform expected prior to World Cup football tournament in June • Sportsbook hosting to be moved to Curacao to allow for strategic move into US market Commenting on the results, Denham Eke, chairman of betinternet, said: "These results show an anticipated fall at EBITDA level as a result of thepreviously announced changes within our pari-mutuel operation and a reduction inmarketing activity in anticipation of the arrival of the new software platform. The Board considers that the new platform, together with a strategic marketingpush into the United States and the introduction of new gaming products, willenable the sportsbook operation to take advantage of the continued growth in theonline gaming sector. In addition, we expect that European Wagering Serviceswill continue its growth with a steady, sustainable increase in its customerbase." ENDS For further information: betinternet.com plc Tel: 01624 698141Garry Knowles, Managing Director Williams de Broe plc Tel: 0113 243 1619Joanne Lake Britton Financial PR Tel: 0207 251 2544Tim Blackstone Notes to editors: The following are attached: 1. Chairman's statement2. Consolidated Profit & Loss Accounts3. Consolidated Balance Sheets4. Consolidated Cash Flow Statements5. Notes to the Accounts N.B. Pari-mutuel (or "tote" wagering) refers to wagering into a "pool" where dividends are paid to winners and the operator retains a percentage of the"pool". Chairman's Statement Introduction The first six months of the Company's financial year, which ended on 27 November2005, have seen a continued and steady improvement in the pari-mutuel operation,European Wagering Services, but have proved challenging for the sportsbookbusiness, with reduced margins during the first half of the European footballseason. However, the Board considers that the arrival of our new software platform,together with a strategic marketing push into the United States market and theintroduction of new gaming products, will enable the sportsbook operation totake advantage of the continued growth in the online gaming sector. In addition, we expect that European Wagering Services will continue its growthwith a steady, sustainable increase in its customer base, whilst maintaining astrong operating margin. Overview of results During the period under review, group turnover was £28.5m (2004: £47.06m) andgross profit was £1.07m (2004: £1.48m). Following a strategic repositioning during 2005, European Wagering Services hasshown very promising signs of growth. Turnover for the 26 week period was£3.4m. Whilst this shows an anticipated reduction compared with the previousperiod, the business is now operating on a significantly enhanced margin,resulting in a gross profit of £541,000 for the period. The sportsbook operation remained steady as we have undertaken a reduced amountof marketing in anticipation of the move to a new platform. Turnover, includingthat from casino games, was at £25.1m (2004: £14.8m). The blended margindecreased to 2.1% (2004: 3.1%) as a result of both an increase in the number ofless favourable results in the first half of the football season and a change inthe balance from sports betting to casino play. Our live casino product, Play Live Casino, continues to perform strongly and therevenue generated from this and our football game, Play Football, outstrippedthat from sports betting during this period. Overheads were similar to last year at £1.67m (2004: 1.66m) and we expect theseto show a reduction in the full financial year. Fund-raising The business strategy of re-locating the servers to Curacao, developing a newsportsbook platform and entering into the US market has been supported by afurther placement of shares with Burnbrae Ltd in January 2006. Prospects European Wagering Services has achieved organic growth due to the growingnumbers of pari-mutuel players operating through our Isle of Man based hub. Thedirectors are confident that this business will deliver sustainable growth andincreased profit. In addition, we are continuing to follow our strategy ofoffering incentives to select customers betting on greyhound racing. The reporton the audit of our business by the US Thoroughbred Protective Bureau (TRPB),which was expected in late 2005, is now due for presentation in March 2006 andwe remain confident that it will reflect our business in a positive light. The future growth of our sportsbook business is based upon the delivery of ournew platform, which is being developed in partnership with IGW, a specialistsoftware developer, based in Miami. We are planning to launch the new softwareprior to the 2006 World Cup Tournament and expect this will bring significantimprovements for both our customers and internal operational team. In addition,we are planning to launch a Random Number Generator casino alongside a number offixed-odds games, with further gaming products to be added during the secondhalf of the calendar year. The addition of these products will reduce ourreliance on favourable sports results and better balance the company's riskexposure. Our investment in Global CoreSports will see the launch of the firstproduct, coreFootball in mid 2006 and the reaction from the initial user trialsis extremely positive. The directors remain confident that the investments being made in the sportsbookplatform will enable betinternet.com to improve the performance of itssportsbook operation by providing a compelling one-stop gaming and entertainmentexperience. Denham EkeChairman Consolidated Profit and Loss Accountfor the 26 weeks ending 27 November 2005 Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 27 November 28 November 29 May 2005 2005 2004 £000 Note £000 £000Turnover including share of joint ventureBetting stakes receivedPari-Mutuel 6 3,407 32,264 45,794Sports Betting 9,956 14,800 29,157Casino and Games 15,136 - 18,747Joint Venture 6 - 1,403 1,403 ---------- ---------- ---------- 28,499 48,647 95,101Less: share of joint venture - (1,403) (1,403) ---------- ---------- ---------- Total group turnover 1 28,499 47,064 93,698Cost of salesWinnings paid and bets laid off (27,411) (45,558) (90,564)Betting duty paid (15) (29) (82) ---------- ---------- ---------- Gross profit 1 1,073 1,477 3,052Administration expenses (1,672) (1,656) (3,415) ---------- ---------- ---------- Earnings before interest,tax,depreciationand amortisation (599) (179) (363)Depreciation (146) (250) (754) Amortisation of goodwill (250) (316) (675) ---------- ---------- ---------- Gross operating loss (995) (745) (1,792)Share of operating (loss)/profit in joint - 24 (105)venture ---------- ---------- ----------Total opening loss including share of joint (995) (721) (1,897)ventureInterest 2 1 5 ---------- ---------- ----------Loss on ordinary activities before and aftertaxation and retained loss for the year (993) (720) (1,892) ---------- ---------- ---------- Basic and diluted loss per share (pence) 3 (0.66) (0.57) (1.4) ---------- ---------- ---------- Consolidated Balance Sheetfor the 26 weeks ending 27 November 2005 Unaudited Unaudited Audited 27 November 28 November 29 May 2005 2004 2005 £000 £000 £000Fixed assetsIntangible assets 291 899 541Tangible assets 400 482 351Investments 145 - 83 ---------- ---------- ---------- 836 1,381 975 ---------- ---------- ----------Current assetsDebtors 443 619 207Cash at bank and in hand 849 583 650 ---------- ---------- ---------- 1,292 1,202 857 CreditorsAmounts falling due within one year (2,864) (2,176) (1,611) ---------- ---------- ---------- Net current liabilities (1,572) (974) (754) ---------- ---------- ----------Total assets less current liabilities (736) 407 221 CreditorsAmounts falling due after more than one year (99) - (63) ---------- ---------- ---------- Net (liabilities) / assets (835) 407 158 ---------- ---------- ---------- Capital and reservesCalled up share capital 1,505 1,254 1,505Share premium 8,213 7,541 8,213Profit and loss account (10,553) (8,388) (9,560) ---------- ---------- ---------- Equity shareholders' funds (835) 407 158 ---------- ---------- ---------- Consolidated Cash Flow Statementfor the 26 weeks ending 27 November 2005 Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks 27 November 28 November to 29 May 2005 2004 2005 Note £000 £000 £000 Net cash inflow / (outflow) from 4 93 (466) (1,182)operating activitiesReturns on investments and servicing of 2 1 5financeAcquisition of tangible fixed assets (195) (10) (97)Acquisition of investments (63) - (83)Cash assumed on acquisition of joint - 414 414venture ---------- ---------- ---------- Cash outflow before use of liquid resources andfinancingfinancing (163) (61) (943) ---------- ---------- ---------FinancingIssue of convertible loan 36 200 63Share issue - - 922 ---------- ---------- ---------- (Decrease) / increase in cash during the 5 (127) 139 42period ---------- ---------- ---------- Reconciliation of net cash flow to movementin net funds 27 November 28 November 29 May 2005 2004 2005 £000 £000 £000 Operating net funds 479 437 437Increase/(Decrease) in cash during the (127) 139 42period ---------- ---------- ---------Closing net funds 5 352 576 479 ---------- ---------- ---------- Notes to the Accountsfor the 26 weeks ending 27 November 2005 1 Segmental Analysis Sports betting Pari-Mutuel Casino & Games Total £000 £000 £000 £000 Betting stakes received 9,956 3,407 15,136 28,499 Winnings paid and bets laid off (9,683) (2,865) (14,863) (27,411) Betting duty paid (2) (1) (12) (15) ---------- ---------- ---------- ---------- Gross Profit 271 541 261 1,073 ---------- ---------- ---------- ---------- Margin 2.7% 15.9% 1.7% 3.8% Sports betting Pari-Mutuel Total 26 weeks to 28 November 2004 £000 £000 £000 Betting stakes received 14,800 32,264 47,064 Winning paid and bets laid off (13,990) (31,568) (45,558) Betting duty paid (9) (20) (29) ---------- ---------- ---------- Gross profit 801 676 1,477 ---------- ---------- ---------- Margin 5.4% 2.1% 3.1% Casino and Games were launched in December 2004. The 50% of Euro Off-Track Limited Partnership not previously owned was acquired on 30 June 2004 and was in joint venture. The consolidated profit and loss account for the 26 weeks to 28 November 2004 includes the group's share of turnover and operating profit for the period to 28 June 2004. Thereafter, the results of the operation were fully consolidated. 2 Taxation No provision is required due to the availability of losses brought forward. 3 Loss per share The earnings per share calculation is based on the loss for the period after taxation and the weighted average number of shares in issue throughout the period. Calculations of loss per share is based on losses of £992,529 (2004: £719,927) and the weighted average number of ordinary being the equivalent of 150,461,602 (2004: 125,448,127) ordinary 1p shares. The diluted loss per share is the same as the basic loss per share as the adjustment to assume conversion of dilutive ordinary shares would decrease the loss per share. Notes to the Accounts (continued) 4 Analysis of net funds Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks 27 November 28 November to 29 May 2005 2004 2005 £000 £000 £000 Operating loss (995) (745) (1,792) Non cash impact of acquisition of joint venture - (787) - Depreciation and amortisation charges 396 566 1,140 (Increase)/decrease in debtors (236) 232 537 Increase/(decrease) in 928 268 (1,067) creditors ---------- ---------- ---------- Net cash outflow from operating activities 93 (466) (1,182) ---------- ---------- ---------- 5 Analysis of net funds At 27 At 29 May November 2005 Cash Flow 2005 £000 £000 £000 Cash in hand and at bank 650 199 849 Bank overdraft (171) (326) (497) ---------- ---------- ---------- 479 (127) 352 ---------- ---------- ---------- 6 Basis of preparation of the financial statements The results for the period ended 27 November 2005 are prepared in accordance with applicable accounting standards, using the same accounting policies as set out in the group accounts for the year ended 29 May 2005. The interim statements are unaudited, but have been reviewed in accordance with Auditing Practices Board guidance by the Auditors, KPMG Audit LLC. The directors have considered the adequacy of the cash resources and working capital available to the group for the next twelve months and, having also taken cognisance of the impact of the share placement in January 2006, which raised £1.6m (before expenses), are satisfied that the group has adequate resources to meet its obligations as they fall due. On this basis the directors have concluded that it is appropriate to prepare the financial statements on a going concern basis. 7 Other information (i) The comparatives for the 52 weeks ended 29 May 2005 are not the company's statutory accounts for that financial period. Those accounts have been reported on by the company's auditors and delivered to the Companies Registry. The report of the auditors was unqualified. (ii) All profits derive from continuing activities. (iii)The interim statement was approved by the board on 27 February 2006. (iv) The interim report is expected to be posted to shareholders on 10 March 2006 and will be available from that date at the Company's Registered Office; Viking House, Nelson Street, Douglas, Isle of Man IM1 2AH. (v) The Company's nominated advisor and broker is Williams de Broe, PO Box 515, 6 Broadgate, London EC2M 2RP This information is provided by RNS The company news service from the London Stock Exchange