Webis Regulatory News (WEB)

26 Jun 2008 07:00



26 June 2008

WEBIS HOLDINGS PLC

(or "the Company")

Trading Update

The Board of Webis Holdings plc, the global on-line gaming group, is pleased to provide a trading update in relation to the Company's unaudited results for its financial year ended 25 May 2008. 

The Company has continued to make progress and both our sportsbook, betinternet.com and our pari-mutuel operation, European Wagering Services (or "EWS"), have seen an improved trading performance for the year as a whole.

betinternet.com Sportsbook Portal

The betinternet.com sportsbook portal has seen a positive effect on revenues from the greater spend on marketing the website within Europe. The Company has sponsored 14 horse races at Newmarket and Ascot racecourses during April and May 2008, three of which were broadcast live on terrestrial TV in the UK. This initial promotional activity has given the brand great exposure to a clientele that would generally be unfamiliar with our offering. The Board is committed to continuing with similar types of sponsorship throughout the new financial year, as it believes that this type of marketing activity successfully promotes the brand to its target audience. Notwithstanding this, the Company remains fully committed to serving new and existing customers in the Far East by ongoing enhancement of its football product offering.

The marketing spend has also had a positive impact on the revenues achieved by our two casinos and fixed-odds games. These products accounted for 66% of the overall sportsbook's revenue for the full year and continue to show strong growth. The Board anticipates adding further similar products to the portal during the forthcoming year.

Technology continues to play a greater role within our sportsbook, both for the creation of new content and as a risk management tool. As a direct result, we have again been able to reduce our sportsbook operating costs and these savings have been re-invested in marketing. We have also committed to upgrading our sportsbook hardware environment and the relocation of this to a third-party, purpose-built, hosting facility on the Isle of Man. This project is planned for completion in July and will further enhance the security and resilience of our sportsbook portal.

The current European football championships are attracting a large amount of interest for the sportsbook and the Board anticipates a positive impact on revenues from this event for the forthcoming year.

European Wagering Services

EWS has shown the anticipated improvement in the second half of the financial year, following the resolution in November 2007 of our previously notified temporary banking issue. For the full year, turnover increased however our net margin reduced as the impact of the banking issue in the first half had a greater effect on the higher margin 'leisure players' rather than the lower margin 'high rollers'. In addition, at a limited number of racetracks, we have experienced an increase in the 'Host Track Fee' (a percentage of turnover that we pay to each racetrack) and this has also had a small impact on our net margin.

The Board is pleased to report that the re-design of the link2bet.com website is now underway, following our concentration on a contract to provide a white-label website, which was successfully launched in May 2008 at www.totebet.com. We anticipate the updated link2bet.com website will be launched in Quarter One of the new financial year and once this is fully operational we would expect to increase our marketing spend accordingly.

Our other current focus is to increase the amount of quality content that our customers can wager on and we remain in negotiations with a view to achieving this. This process takes considerable time and requires a commitment to ongoing relationship-building at a high level within the pari-mutuel industry. Ed Comins, the chief operating officer of EWS, has established himself as an effective presence within the industry and this will help facilitate our negotiations with potential partners. 

Managing Director, Garry Knowles, said "it is very encouraging that the Company continues to make good progress and has managed a path through the challenges facing our industry. Our previous focus on ensuring that the Company has strong foundations has meant that we have been able to concentrate our energies successfully on growing both EWS and betinternet.com during the second half of the financial year. I anticipate that this growth will continue into the new financial year as we allocate more funding to marketing the increased offering of both the pari-mutuel and sportsbook operations."

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