TIDMWEB
RNS Number : 9773F
Webis Holdings PLC
27 February 2018
For immediate release
27 February 2018
Webis Holdings plc
("Webis" or "the Group")
Interim Report and Financial Statements for the period ended 30
November 2017 ("The Report")
Webis Holdings plc, the global gaming group, today announces its
unaudited interim results for the period ended 30 November 2017,
extracts from which are set out below.
The Report is available on the Company's website
www.webisholdingsplc.com and at the Group's registered office:
Viking House, Nelson Street, Douglas, Isle of Man IM1 2AH
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014
For further information:
Webis Holdings plc Tel: 01624 639396
Denham Eke
Beaumont Cornish Limited Tel: 020 7628 3396
Roland Cornish/James Biddle
Chairman's Statement
Introduction
Although we incurred a small loss for the period, I am pleased
to report a further significant growth in turnover of 41% to US$
209 million (2016: US$ 148 million), thus continuing the positive
trend highlighted in my previous Chairman's Statement for the
Financial Year 2017. In addition, we increased activity on our
website/mobile product - watchandwager.com - reporting a record
number of users across the platform for the Breeders' Cup races at
Del Mar, California on November 4(th) , 2017.
Our on-line ADW operations had a robust period of increased
handle and consistent profitability, both through our
website/mobile platform and through our business-to-business
trading.
Our racetrack operation at Cal Expo, Sacramento, California,
experienced a challenging first half, reflecting the costs of
starting our new season of racing, coupled with a weak initial
wagering handle in the early part of the season.
Half Year Results Review
Group turnover increased by 41.4% to US$ 209.30 million (2016:
US$ 148.08 million) with gross profit increasing by 7.1% to US$
2.22 million (2016: US$ 2.07 million). The increase in turnover was
largely due to growth in our business-to-business activity in
international markets, as well as an increase in
business-to-consumer within the US, notably via the
watchandwager.com website and mobile product.
Operating expenses showed a small decrease to US$ 2.23 million
(2016: US$ 2.26 million). Despite some savings, these were largely
offset by increased costs of maintaining and growing our range of
licences and also ensuring regulatory compliance within the
industry and the various jurisdictions within which we operate.
These costs are effectively mandatory and we consider being fully
compliant to be absolutely vital to our future growth.
Overall, the Board are encouraged by these results. We are now
ranked within the Top Five (ranked by turnover) of licensed USA
operators and further cements WatchandWager's position as a
credible provider within the USA.
We continue to push forward with our strategy of diversifying
our product offering to ensure the stability of our business
performance. Despite generating significant turnover,
business-to-business trading is inherently volatile and is high
risk in terms of a reducing margin returned. The decisions of key
content groups or player groups are largely outside our control. In
addition, the performance of our racetrack at Cal Expo has been
hampered by low horse numbers, which has created smaller fields and
fewer races, hence generating lower betting handle.
In respect of the Condensed Consolidated Statement of Financial
Position, our net assets show a small decrease to US$ 1.92 million
(year-end 31 May 2017: US$ 1.94 million). Total cash balances stand
at US$ 13.65 million (year-end 31 May 2017: US$ 15.07 million).
WatchandWager Advanced Deposit Wagering
Business-to-consumer - activity through all channels increased
during the period, and we were rewarded with a record number of
active players on our website and mobile platforms on Breeders' Cup
day in November 2017. We also managed to continue this growth
through a more precisely targeted use of promotional bonuses and
offers. We enjoy an enhanced margin from business-to-consumer play
and developing this business segment is a key part of our US
strategy.
Business-to-business - the supply of wagering services to
high-roller player groups provided a significant contribution to
our overall turnover during the period, primarily due to an
increase in high volume wagering into international jurisdictions,
particularly France, but also North America, UK/Ireland and the
Hong Kong Jockey Club pools, despite the latter having their usual
break from racing in mid-July to early September. We continue to
increase our spread of activity over a broader variety of
world-wide racetracks from a larger business trading database. We
are, however, aware of the various issues inherent in this business
as the sector continues to consolidate.
Cal Expo
In October, WatchandWager re-commenced harness racing at the Cal
Expo racetrack in Sacramento for the sixth successive season under
new contractual terms with both our landlord and management team.
We spent much of the summer months focused on horse recruitment and
had some success in attracting new horses. Overall, however, horse
numbers have reduced. The trainers who have regularly supported our
meeting are generally trying to cut back, mainly citing economic
factors. Thus, initial wagering on the first two months was below
expectations, and this is an area that we are looking to address in
the remaining months of the season.
Summary and Outlook
The Board is pleased to report a generally further positive
performance during the start of the second half in what is normally
a quieter time of year for quality content. This is especially so
in our on-line operations, but less so at Cal Expo. Handle and
player numbers have generally held up well during December 2017 and
January 2018.
Business-to-consumer - despite growth, it was very disappointing
to be informed at the end of 2017 that the USA media rights
company, Monarch Content Management, were not renewing our contract
for wagering and streaming rights into 2018. In total, this
decision affects seventeen tracks in the USA, some of which are
owned by the Stronach Group. Following this news, we have been in
active negotiations with those tracks who are willing to enter into
separate arrangements with some success and we expect this to
continue. The loss of wagering on these tracks has had a minimal
impact on our website and player numbers - simply put, our player
base has limited loyalty to these tracks and we have successfully
transferred activity to other tracks who are more willing to work
with us. However, the Board would like to record our disappointment
at the motives behind Monarch's decision, which is, in our opinion,
clearly anti-competitive in nature and of no benefit to the US
horseracing industry.
During the end of 2017, we successfully renewed our multiple
wagering licences within the US and continue to be in good
regulatory status.
We remain focused on growing our business-to-consumer activity,
and have recently signed agreements with a marketing agency in
Kentucky and consultant in California to accelerate this
strategy.
Business-to-business - growth in handle continues with high
volume wagering into international markets, especially France.
However, this sector does remain volatile as it is essentially a
relationship business, requiring the management of both content
providers and player groups. As a result, the Board is aware of the
need to minimise this risk as much as possible, both by recruiting
new players and by, providing new content and negotiating better
rates on existing arrangements with suppliers. This is an on-going
process to diminish any concentration risk from a reliance on
individual players or player groups.
Cal Expo - racing operations have continued in December and
January, but the handle and revenues derived from operations is
below our expectations. There are many reasons for this downturn
with the most important being a lack of horse numbers, along with a
general downturn in wagering on horses, especially in California.
We race until early May and our principal objective is to minimise
current losses at the track and start advanced planning for a
return to profitability.
US Gaming
The Board continues to monitor developments in the progress of
Federal and State US online gaming legislation and, like much of
the rest of the industry, is very encouraged by the Supreme Court
review of the Professional and Amateur Sports Protection Act
legislation which effectively outlaws fixed odds betting, the
result of which is now expected at the latest by June 2018. Most
significantly, there appears to be a general view that live
operating racetracks should be permitted to conduct land-based
sports betting, which adds strategic advantage and value to our
various licences and live racing at Cal Expo. We have not spent
significant funds in lobbying this area, which has proved a correct
decision given the overall slow progress. There does, however, seem
to be significant progress in recent months and we are now actively
developing a strategy for sports betting and how to best utilise
our US licensed assets, in conjunction with a consultant in
California.
Summary
The Board is encouraged by our continued impressive top line
growth, although recognising that there are ongoing challenges to
our business-to-business trading and our racetrack operation.
Our strategy of building brand value, with our increasing suite
of US licences, together with our US established operations and
business relationships, has created a significant asset. The
barriers to entry into the US market become ever greater and the
Board will look for further opportunities to build on this asset
for the benefit of shareholders. Ultimately, we work to position
the Group as a stable and diversified business and remain positive
regarding our current overall position.
Denham Eke
Non-executive Chairman
Condensed Consolidated Statement of Comprehensive Income
For the period ended 30 November 2017
Period
to 30 Period
November to 30 November
2017 (unaudited) 2016 (unaudited)
Note US$000 US$000
------------------------------------- ----- ------------------ -------------------
Turnover 2 209,308 148,077
Cost of sales (206,693) (145,688)
Betting duty paid (399) (320)
------------------------------------- ----- ------------------ -------------------
Gross profit 2,216 2,069
------------------------------------- ----- ------------------ -------------------
Operating costs (2,228) (2,257)
Operating loss (12) (188)
------------------------------------- ----- ------------------ -------------------
Other gains/(losses) - net 14 (26)
Share based costs (1) (1)
Finance income - -
Finance costs (20) -
------------------------------------- ----- ------------------ -------------------
Finance (costs)/income - net 3 (20) -
------------------------------------- ----- ------------------ -------------------
Loss before income tax (19) (215)
------------------------------------- ----- ------------------ -------------------
Income tax expense 4 - -
------------------------------------- ----- ------------------ -------------------
Loss for the period (19) (215)
------------------------------------- ----- ------------------ -------------------
Other comprehensive income for the - -
period
------------------------------------- ----- ------------------ -------------------
Total comprehensive income for the
period (19) (215)
------------------------------------- ----- ------------------ -------------------
Basic and diluted earnings per share
for loss attributable to the equity
holders of the Company during the
period (cents) 5 (0.00) (0.05)
------------------------------------- ----- ------------------ -------------------
The notes set out below form an integral part of these condensed
consolidated interim financial statements.
Condensed Consolidated Statement of Financial Position
As at 30 November 2017
As at Year to
30 November 31 May
2017 2017
(unaudited) (audited)
Note US$000 US$000
----------------------------- ----- -------------- ------------
Non-current assets
Intangible assets 6 132 105
Property, equipment
and motor vehicles 97 109
Bonds and deposits 101 103
----------------------------- ----- -------------- ------------
Total non-current
assets 330 317
----------------------------- ----- -------------- ------------
Current assets
Bonds and deposits 2,856 2,863
Trade and other receivables 1,232 3,071
Cash and cash equivalents 7 13,650 15,072
----------------------------- ----- -------------- ------------
Total current assets 17,738 21,006
----------------------------- ----- -------------- ------------
Total assets 18,068 21,323
----------------------------- ----- -------------- ------------
Equity
Called up share capital 6,334 6,334
Share option reserve 3 -
Retained losses (4,416) (4,397)
----------------------------- ----- -------------- ------------
Total equity 1,921 1,939
----------------------------- ----- -------------- ------------
Current liabilities
Trade and other payables 15,647 18,884
----------------------------- ----- -------------- ------------
Total current liabilities 15,647 18,884
----------------------------- ----- -------------- ------------
Non-current liabilities
Loans 8 500 500
----------------------------- ----- -------------- ------------
Total non-current
liabilities 500 500
----------------------------- ----- -------------- ------------
Total liabilities 16,147 19,384
----------------------------- ----- -------------- ------------
Total equity and liabilities 18,068 21,323
----------------------------- ----- -------------- ------------
The notes set out below form an integral part of these condensed
consolidated interim financial statements.
Condensed Consolidated Statement of Changes in Equity
For the period ended 30 November 2017
Called up Share option Retained Total
share capital reserve earnings equity
US$000 US$000 US$000 US$000
Balance as at 31
May 2016 (audited) 6,334 - (4,402) 1,932
Total comprehensive
income for the period:
Loss for the period - - (215) (215)
Transactions with
owners:
Share-based payment
expense - 1 - 1
Balance as at 30
November 2016 (unaudited) 6,334 1 (4,617) 1,718
--------------------------- --------------- ------------- ---------- --------
Balance as at 31
May 2017 (audited) 6,334 2(4,397) 1,939
Total comprehensive
income for the period:
Loss for the period - - (19) (19)
Transactions with
owners:
Share-based payment
expense - 1 - 1
Balance as at 30
November 2017 (unaudited) 6,334 3(4,416) 1,921
--------------------------- ----- ------- -----
The notes set out below form an integral part of these condensed
consolidated interim financial statements.
Condensed Consolidated Statement of Cash Flows
For the period ended 30 November 2017
Period
to Period to
30 November 30 November
2017 2016
(unaudited) (unaudited)
US$000 US$000
----------------------------------------------------- ------------- ---------------
Cash flows from operating activities
Loss before income tax (19) (215)
Adjustments for:
* Depreciation of property, equipment and motor
vehicles 37 35
* Amortisation of intangible assets 30 31
* Finance costs/(income) - net 20 -
* Other Foreign exchange movements 10 172
Changes in working capital:
* Decrease/(increase) in receivables 1,839 (5,768)
* (Decrease)/increase in payables (3,237) 10,214
Cash flows (used in)/from operations (1,320) 4,469
Finance income - -
Bonds and deposits utilised in the course
of operations 9 58
Net cash (used in)/generated from operating
activities (1,311) 4,527
----------------------------------------------------- ------------- ---------------
Cash flows from investing activities
Purchase of intangible assets (57) (48)
Purchase of property, equipment and
motor vehicles (25) (18)
Net cash used in investing activities (82) (66)
----------------------------------------------------- ------------- ---------------
Cash flows from financing activities
Interest and charges paid (20) -
Net cash used in financing activities (20) -
----------------------------------------------------- ------------- ---------------
Net (decrease)/increase in cash and
cash equivalents (1,413) 4,461
Cash and cash equivalents at beginning
of year 15,072 6,445
Exchange losses on cash and cash equivalents (9) (163)
----------------------------------------------------- ------------- ---------------
Cash and cash equivalents at end of
period 13,650 10,743
----------------------------------------------------- ------------- ---------------
The notes set out below form an integral part of these condensed
consolidated interim financial statements.
Notes to the Condensed Consolidated Interim Financial
Statements
For the period ended 30 November 2017
1 General information and basis of preparation
Webis Holdings plc (the "Company") 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
Webis Holdings plc unaudited condensed consolidated financial
statements as at and for the period ended 30 November 2017
consolidate those of the Company and its subsidiaries (together
referred to as the "Group").
The unaudited condensed consolidated financial statements of the
Group (the "Financial Information") are prepared in accordance with
Isle of Man law and International Financial Reporting Standards
("IFRS") and their interpretations issued by the International
Accounting Standards Board ("IASB") and adopted by the European
Union ("EU"). The financial information in this report has been
prepared in accordance with the Group's accounting policies. Full
details of the accounting policies adopted by the Group are
contained in the consolidated financial statements included in the
Group's annual report for the year ended 31 May 2017 which is
available on the Group's website: www.webisholdingsplc.com.
The accounting policies and methods of computation and
presentation adopted in the preparation of the Financial
Information are consistent with those described and applied in the
consolidated financial statements for the year ended 31 May 2017.
There are no new IFRSs or interpretations effective from 1 June
2017 which have had a material effect on the financial information
included in this report.
The unaudited condensed consolidated financial statements do not
constitute statutory financial statements. The statutory financial
statements for the year ended 31 May 2017, extracts of which are
included in these unaudited condensed consolidated financial
statements, were prepared under IFRS as adopted by the EU and have
been filed at Companies Registry. The auditors' report on those
financial statements was unqualified and did not contain an
emphasis of matter paragraph.
The preparation of the Financial Information requires management
to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and
liabilities, income and expenses. Actual results could differ
materially from these estimates. In preparing the Financial
Information, the critical judgements made by management in applying
the Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated
financial statements as at and for the year ended 31 May 2017 as
set out in those financial statements.
The Financial Information is presented in US Dollars, rounded to
the nearest thousand, which is the functional currency and also the
presentation currency of the Group.
Going Concern
The Group has increased revenues significantly, whilst
controlling operating costs as much as possible. This has resulted
in significantly reduced losses being incurred. Achieving economies
of scale and controlling costs are key priorities for the Group in
achieving its goal of profitability and maintaining adequate
liquidity in order to continue its operations. The Directors
continue to assess all strategic options in this regard, albeit
that the ultimate success of strategies adopted is difficult to
predict. Notwithstanding the losses incurred, the Directors have
prepared projected cash flow information for the next 12 months and
believe that the Group has adequate resources to meet its
obligations as they fall due. Accordingly, the Directors consider
that it is appropriate that the Financial Information is prepared
on a going concern basis.
2 Segmental analysis
Period Period
to to
30 November 30 November
2017 2016
(unaudited) (unaudited)
US$000 US$000
------------------------------------- ------------- ------------ ------------
Turnover
Pari-mutuel and Racetrack Operations Asia Pacific 188,170 113,787
United
States 18,454 28,912
British
Isles 2,431 767
Europe 252 4,519
Rest of
the World 1 92
209,308 148,077
--------------------------------------------------- ------------ ------------
Total comprehensive income
Pari-mutuel and Racetrack Operations (1) (229)
Group (18) 14
---------------------------------------------------- ------------ ------------
(19) (215)
--------------------------------------------------- ------------ ------------
30 November 31 May
2017 2017
(unaudited) (audited)
US$000 US$000
Net assets
Pari-mutuel and Racetrack Operations 876 877
Group 1,045 1,062
------------------------------------------ ------------- ---------------
1,921 1,939
--- ------------- ---------------
3 Finance (costs)/income - net
Period Period
to to
30 November 30 November
2017 2016
(unaudited) (unaudited)
US$000 US$000
------------------------ ------------ ------------
Bank interest receivable - -
------------------------ ------------ ------------
Finance income - -
------------------------ ------------ ------------
Loan interest payable (20) -
Bank charges payable - -
----------------------------- ----
Finance costs (20) -
----------------------------- ----
Finance (costs)/income - net (20) -
----------------------------- ----
4 Income tax expense
Period to Period
to
30 November 30 November
2017 2016
(unaudited) (unaudited)
US$000 US$000
-------------------------------------------- ------------ ------------
Losses before tax (19) (215)
Tax charge at IOM standard rate (0%) - -
Adjusted for:
Tax credit for US tax losses (at 15%) (58) (58)
Add back deferred tax losses not recognised 58 58
-------------------------------------------- ------------ ------------
Tax charge for the period - -
-------------------------------------------- ------------ ------------
5 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 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.
Period Period
to to
30 November 30 November
2017 2016
(unaudited) (unaudited)
US$000 US$000
----------------------------------------- ------------ --------------
Loss for the period, attributable to the
owners of the Company (19) (215)
----------------------------------------- ------------ ------------
No. No.
------------------------------------------- ----------- -------------
Weighted average number of ordinary shares
in issue 393,338,310 393,338,310
Dilutive element of share options if
exercised 14,000,000 14,000,000
------------------------------------------- ----------- -------------
Diluted number of ordinary shares 407,338,310 407,338,310
------------------------------------------- ----------- -------------
Basic earnings per share (0.00) (0.05)
------------------------------------------- ----------- -------------
Diluted earnings per share (0.00) (0.05)
------------------------------------------- ----------- -------------
The earnings applied are the same for both basic and diluted
earnings calculations per share as there are no dilutive effects to
be applied.
6 Intangible assets
Intangible assets include goodwill which 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 indicators that the intangible assets
may be impaired. The goodwill balance was fully impaired in the
financial year ended 31 May 2015.
7 Cash and cash equivalents
30 November 31 May
2017 2017
(unaudited) (audited)
US$000 US$000
-------------------------------------- ------------- -----------
Cash and cash equivalents - company
and other funds 12,364 13,827
Cash and cash equivalents - protected
player funds 1,286 1,245
Total cash and cash equivalents 13,650 15,072
-------------------------------------- ------------- -----------
The Group holds funds for operational requirements and for its
non-Isle of Man customers, shown as 'company and other funds' and
on behalf of its Isle of Man regulated customers, shown as
'protected player funds'.
Protected player funds are held in fully protected client
accounts within an Isle of Man regulated bank.
8 Loans
30 November 31 May
2017 2017
(unaudited) (audited)
US$000 US$000
-------------------- ------------ ----------
Loan - Galloway Ltd 500 500
500 500
-------------------- ------------ ----------
A loan of US$ 500,000 was received from Galloway Ltd in February
2017, to provide financing for cash-backed bonding agreements. The
loan is for a term of five years, attracts interest at 7.75% per
annum and is secured over the unencumbered assets of the company
(see note 9).
9 Related party transactions
Identity of related parties
The Group has a related party relationship with its
subsidiaries, and with its directors and executive officers and
with Burnbrae Ltd (common directors and significant
shareholder).
Transactions with and between subsidiaries
Transactions with and between the subsidiaries in the Group
which have been eliminated on consolidation are considered to be
related party transactions.
Transactions with entities with significant influence over the
Group
Rental and service charges of US$ 25,613 (2016: US$ 22,757) and
directors' fees of US$ 23,455 (2016: US$ 24,292) were charged in
the period by Burnbrae Ltd of which Denham Eke and Nigel Caine are
common directors. The Group also received a loan in February 2017
of US$ 500,000 (2016: US$ Nil) from Galloway Ltd, a company related
to Burnbrae Limited by common ownership and Directors (see note
8).
Transactions with other related parties
There were no transactions with other related parties during the
period.
10 Events after the Balance Sheet Date
To the knowledge of the Directors, there have been no material
events since the end of the reporting period that require
disclosure in the accounts.
11 Approval of interim statements
The interim statements were approved by the Board on 26 February
2018. The interim report is expected to be available for
shareholders on 27 February 2018 and will be available from that
date on the Group's website www.webisholdingsplc.com.
The Group's nominated adviser and broker is Beaumont Cornish
Limited, 2nd Floor, Bowman House, 29 Wilson Street, London EC2M
2SJ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR MMGZZNVLGRZM
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