Webis Regulatory News (WEB)

1 Feb 2007 07:01

betinternet.com PLC01 February 2007 FOR IMMEDIATE RELEASE1 February 2007 BETINTERNET.COM PLC ("the Company" or "betinternet.com") INTERIM RESULTS FOR THE 26 WEEKS ENDED 26 NOVEMBER 2006 betinternet.com plc, the global on-line gaming group, today announces itsinterim results for the 26 weeks ended 26 November 2006. Highlights of the results are: • Group turnover has increased by 53% to £43.6m (2005: £28.5m)• European Wagering Services (EWS) pari-mutuel business has continued to grow with turnover increasing by 247%• EBITDA profit of £182k (2005: loss of £599k)• Sportsbook turnover has increased by 27% to £31.8m (2005: £25.1m)• Sportsbook margin has increased by 19% to 2.5% (2005: 2.1%)• Group overheads have reduced by 17% to £1.39m (2005: £1.67m) Commenting on the results, Denham Eke, chairman of betinternet, said: "These results show that the business has moved to profitability at EBITDAlevel, with a particularly strong performance from European Wagering Services ("EWS"), the group's pari-mutuel operation, and growing revenues from thesportsbook business. This is a significant improvement on the same period lastyear and shows that the strategies put in place by the new management team areworking well." ENDS For further information: betinternet.com plc Tel: 01624 698141Garry Knowles, Managing Director Evolution Securities 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' wheredividends are paid to winners and the operator retains a percentage of the 'pool'. Chairman's Statement Introduction The first half of the Company's financial year, which ended on 26th November2006, has seen the business move to profitability at EBITDA level, with aparticularly strong performance from European Wagering Services ("EWS"), thegroup's pari-mutuel operation, and growing revenues from the sportsbookbusiness. This is a significant improvement on the same period last year and shows thatthe strategies put in place by the new management team are working well. Unlike many internet gaming companies, betinternet.com has little exposure tothe US and the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA)of 2006 has had no impact on our revenues. As a result, the board believesbetinternet.com to be uniquely placed to actively pursue opportunities toacquire non-US business from those companies adversely affected by thislegislation. We believe that we are well positioned to take full advantage ofsuch opportunities. Overview of Results During the period under review, group turnover was £43.6m (2005: £28.5m) andgross profit was £1.52m (2005: £1.07m). EWS has performed particularly well, with turnover for the 26 week period at£11.8m (2005:£3.4m). The operation has a good balance of income from itswebsite, link2bet.com, as well as through its telephone call centre. Revenues from the sportsbook business have also improved, with the introductionof additional income streams from 24 fixed odds games and download and instantcasino games being added during the period. As a result, the sportsbook hasmoved further towards our stated aim of providing a one-stop gaming andentertainment portal. The gross margin from the games and casino channelscontinues to outstrip that made from sports betting where increased competitionin the Far East has a continued impact. However, the directors understand thatit is betting on sports events that drives customers to the portal and for thisreason it is the board's intention to continue to add a variety of new contentto this portal. Overheads have been reduced by 17% to £1.39m (2005: £1.67m) for the period. Thisreduction has been achieved by better controls and by increasing the use oftechnology to replace manual processes throughout the whole business. It isexpected that this process will continue into the second half of the year. Board and executive changes In September 2006, we appointed Damon Waddington as Finance Director. Damonjoined the Company as Financial Controller in February 2006. We have also recently announced the appointment of Ed Comins to the position ofchief operating officer of EWS with effect from 6th February 2007. Ed hasconsiderable commercial experience within the gaming sector, having previouslybeen the business development director of Totepool, the UK Tote's horseracingpool betting brand. Future Prospects EWS' growth has been achieved by offering the excellent levels of service,connectivity and technical solutions that our customers require. We have createdbespoke wagering solutions for individual customers as well as for other gamingbusinesses and anticipate that this is an area that will continue to be indemand. We plan to enhance the link2bet.com website to improve navigation andmake placing wagers more efficient. We believe that Ed Comins' industry-experience will enable him to assistconsiderably with the continued growth of our pari-mutuel business. There remainmany opportunities in this market, especially given the restrictions tofixed-odds wagering brought about by the UIGEA. In addition, the US ThoroughbredProtective Bureau has published its report on our business. We have now sentthis report to many of the racetracks in the US as a reference tool and as aresult of this, are optimistic that we will be able to gain access to additionalcontent for our customers. Enhancements to the sportsbook portal are ongoing, with additional gamingcontent and improved customer functionality being worked on constantly. We alsocontinue to look at additional payment solutions specific to the regions inwhich we operate. Having a dedicated development and design team is aconsiderable advantage to us in making these enhancements to our website in atimely manner. Approximately two-thirds of our sportsbook's customers are resident in the FarEast where the market continues to grow as payment solutions improve andinternet connectivity increases. European football, especially the EnglishPremiership, remains the preferred wagering product for these customers, wherelive pictures are readily available by satellite and now increasingly, throughinternet streaming. The board expects that the Company will start to see revenue from the provisionof a white-label sportsbook service to third parties in the current financialyear. We expect to launch our first white-label website shortly and are keen toattract other companies to take up this service. The directors are confident that betinternet.com can build on the substantialimprovements made over the last six months and that both our pari-mutuel andsportsbook businesses are now well positioned for further growth. Denham EkeChairman Consolidated Profit and Loss Accountfor the 26 weeks ending 26 November 2006 Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 26 November 27 November 28 May 2006 2005 2006 Note £000 £000 £000Turnoverbetting stakes receivedSportsbook 31,791 25,092 57,496Pari-mutuel 11,812 3,407 10,073 ---------- ---------- ----------Total group turnover 1 43,603 28,499 67,569 Cost of salesWinnings paid and bets laid off 1 (42,084) (27,411) (65,246)Net betting duty paid 1 (1) (15) (58) ---------- ---------- ----------Gross profit 1 1,518 1,073 2,265Administration expenses (1,386) (1,672) (3,320)Other operating income 2 50 - - ---------- ---------- ----------Earnings before interest,tax,depreciationand amortisation 182 (599) (1,055)Depreciation (89) (146) (268) Share based costs (16) - -Amortisation of goodwill (43) (250) (498) ---------- ---------- ----------Total operating profit / (loss) 34 (995) (1,821)Interest 16 2 (83) ---------- ---------- ----------Profit / (loss) on ordinary activities before andafter taxation and retained profit / (loss) forthe year 50 (993) (1,904) ---------- ---------- ----------Basic profit / (loss) per share (pence) 4 0.02 (0.66) (1.18) Diluted profit / (loss) per share (pence) 4 0.02 (0.66) (1.18) Consolidated Balance Sheetfor the 26 weeks ending 26 November 2006 Unaudited Unaudited Audited 26 November 27 November 28 May 2006 2005 2006 Note £000 £000 £000Fixed assetsIntangible assets - 291 43Tangible assets 269 400 224Investments 271 145 271 ---------- ---------- ---------- 540 836 538 ---------- ---------- ----------Current assetsDebtors 688 443 549Cash at bank and in hand 6 409 849 458 ---------- ---------- ---------- 1,097 1,292 1,007CreditorsAmounts falling due within one year (1,516) (2,864) (1,490) ---------- ---------- ----------Net current liabilities (419) (1,572) (483) ---------- ---------- ----------Total assets less current liabilities 121 (736) 55 CreditorsAmounts falling due after more than one year - (99) - ---------- ---------- ----------Net assets / (liabilities) 121 (835) 55 ---------- ---------- ----------Capital and reservesCalled up share capital 1,969 1,505 1,969Share premium 9,550 8,213 9,550Profit and loss account (11,398) (10,553) (11,464) ---------- ---------- ----------Equity shareholders' funds 121 (835) 55 ---------- ---------- ---------- Consolidated Cash Flow Statementfor the 26 weeks ending 26 November 2006 Unaudited Unaudited Audited 26 weeks to 26 weeks to 52 weeks to 26 November 27 November 28 May 2006 2005 2006 Note £000 £000 £000 Net cash inflow / (outflow) from operating 5 38 93 (1,467)activitiesReturns on investments and servicing of finance 16 2 (83)Acquisition of tangible fixed assets (134) (195) (141)Acquisition of investments - (63) (188) ---------- ---------- ----------Cash outflow before use of liquid resources and (80) (163) (1,879)financing ---------- ---------- ---------FinancingIssue of convertible loan - 36 -Share issue - - 1,738 ---------- ---------- ---------- Decrease in cash during the period 6 (80) (127) (141) ---------- ---------- ---------- Reconciliation of net cash flow to movement in net 26 November 27 November 28 Mayfunds 2006 2005 2006 £000 £000 £000 Operating net funds 338 479 479Decrease in cash during the period (80) (127) (141) ---------- ---------- ---------Closing net funds 6 258 352 338 ---------- ---------- ---------- Notes to the Accountsfor the 26 weeks ending 26 November 2006 1 Segmental Analysis Sportsbook Pari-mutuel Total 26 weeks to 26 November 2006 £000 £000 £000 Betting stakes received 31,791 11,812 43,603 Winnings paid and bets laid off (31,021) (11,063) (42,084) Net Betting duty paid 10 (11) (1) ---------- ---------- ---------- Gross profit 780 738 1,518 ---------- ---------- ---------- Margin 2.5% 6.2% 3.5% Sportsbook Pari-Mutuel Total 26 weeks to 27 November 2005 £000 £000 £000 Betting stakes received 25,092 3,407 28,499 Winning paid and bets laid off (24,546) (2,865) (27,411) Betting duty paid (14) (1) (15) ---------- ---------- ---------- Gross profit 532 541 1,073 ---------- ---------- ---------- Margin 2.1% 15.9% 3.8% 2 Other operating income Other operating income has arisen on the disposal of a 25% interest in Isle of Man Tote Limited, a pari-mutuel operation and consists of a dividend of £25k prior to the sale and £25k on the disposal of shares. 3 Taxation No provision for taxation is required as the company is subject to a 0% Isle of Man income tax charge on its gaming activities. 4 Profit per share The basic and diluted earnings per share calculation is based on the profit for the period after taxation of £50,157 (2005 loss of £992,529) and the weighted average number of shares in issue throughout the period of 196,944,179 (2005: 150,461,402) ordinary 1p shares and fully diluted average number of shares of 200,866,238 (2005 : 150,461,402) ordinary 1p shares. 5 Reconciliation of operating profit to net Unaudited Unaudited Audited cash inflow / (outflow) from operating 26 weeks to 26 weeks to 52 weeks to activities 26 November 27 November 28 May 2006 2005 2006 £000 £000 £000 Operating profit / (loss) 34 (995) (1,821) Share based costs 16 - - Depreciation and amortisation charges 132 396 766 Increase in debtors (139) (236) (342) (Decrease) / increase in creditors (5) 928 (70) ---------- ---------- ---------- Net cash inflow from operating activities 38 93 (1,467) ---------- ---------- ---------- 6 Analysis of net funds Unaudited Audited At 26 At 28 May November 2006 Cash Flow 2006 £000 £000 £000 Cash in hand and at bank 458 (49) 409 Bank overdraft (120) (31) (151) ---------- ---------- ---------- 338 (80) 258 ---------- ---------- ---------- 7 Basis of preparation of the financial statements The results for the period ended 26 November 2006 are prepared in accordance with applicable accounting standards, using the same accounting policies as set out in the group accounts for the year ended 28 May 2006 with the exception of FRS 20 - share based payments, which has been adopted in the period under review. The fair value of share options granted is recognised as an employee expense with corresponding increase in equity. Fair value has been determined using the Black Scholes model. There is no charge to the prior year. 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 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. 8 Other information (i) The comparatives for the 52 weeks ended 28 May 2006 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 1st February 2007. (iv) The interim report is expected to be posted to shareholders on 16 February 2007 and will be available from that date, free of charge, for one month 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 Evolution Securities, Kings House, 1 King Street, Leeds LS1 2HH This information is provided by RNS The company news service from the London Stock Exchange