(WEB.L) Webis Holdings PLC Buy/Sell

RNS Number : 5735G Webis Holdings PLC 03 February 2010

FOR IMMEDIATE RELEASE

03 February 2010

WEBIS HOLDINGS PLC

("the Company" or "the Group")

INTERIM RESULTS FOR THE PERIOD ENDED 29 NOVEMBER 2009

Webis Holdings Plc, the global on-line gaming group, today announces its interim results for the period ended 29 November 2009.

Summary:

· Group turnover decreased by 21% to £56.4m (2008: £71.5m)

· European Wagering Services' turnover increased by 22% to £18.4m
(2008: £15.1m)

· betinternet.com's turnover reduced by 33% to £37.9m (2008: £56.4m)

· Gross profit decreased by 14% to £1.46m (2008: £1.70m); gross margin
increased by 0.21% to 2.59% (2008: 2.38%)

· Decrease in EBITDA to £87k (2008: £381k)

· Operating loss of £51k (2008: operating profit of £256k)

Commenting on the results, Denham Eke, Chairman of Webis Holdings Plc, said:

"It has been a difficult start to this financial year, particularly relative to the progress made in the previous year. European Wagering Services has continued its recent good performance, with a 22% increase in turnover for the period, as a result of the successful recruitment of additional players through the link2bet.com website. Casino revenue within betinternet.com's sportsbook, however, has seen business levels reduce compared with last year, as some of the 'high-roller' activity seen previously fell away in the period. Despite the challenging and competitive trading environment for both businesses, we continue to seek ways of further enhancing our customers' experience, in particular through the harnessing of appropriate technologies to our product offering. The Board's overall view of the Group's prospects remains positive."

ENDS

For further information:

Webis Holdings Plc Tel: 01624 698141

Garry Knowles, Managing Director Damon Waddington, Finance Director
Evolution Securities Tel: 0113 243 1619

Joanne Lake/Peter Steel

Notes to editors:

The following are attached:

1. Chairman's statement 2. Consolidated Income Statements 3. Consolidated Balance Sheet 4. Consolidated Statement of Changes in Shareholders' Equity 5. Consolidated Statement of Cash Flows 6. 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". 'In-Running' refers to wagering whilst an event is in progress.

Introduction

As previously reported, it has been a difficult start to this financial year, particularly relative to the progress made in the previous year. European Wagering Services (or "EWS") has continued its recent good performance, with a 22% increase in turnover for the period, as a result of the successful recruitment of additional players through the link2bet.com website. Casino revenue within betinternet.com's ("betinternet") sportsbook, however, has seen business levels reduce compared with last year, as some of the 'high-roller' activity seen previously fell away in the period. betinternet's turnover for the period decreased by 33% as a consequence.

European Wagering Services

Our pari-mutuel operation, EWS, has seen encouraging growth throughout the period despite the challenging trading environment. The horse and greyhound racing industry in the United States has seen a downturn in racetrack attendance and the size of betting pools as a result, which has in turn reduced the attraction of betting at individual tracks for some of our higher-staking customers. However, we have generated month-on-month growth through our internet channel and this has enabled us to increase our overall turnover at a higher margin. Turnover from our B2B customers betting directly through our pari-mutuel EWS hub has also increased. This is a consequence of targeted business development activities and enhancements made to our customer interface, which have improved connectivity for our professional players. During the period, we have also completed the relocation of our servers to a dedicated hosting facility within the Isle of Man with no disruption to our operation.

We continue to allocate resource to further improve the link2bet.com website's functionality and to funding the marketing of the website in US-focused horse and greyhound related media.

We continue to monitor the situation regarding access to content at Magna Entertainment Corp's racecourses, following their bankruptcy in 2009. The board also continues to minimise EWS's exposure to racecourse debt, given the position of the industry in the current downturn.

During the period, we had authorised access to the betting pools at the prestigious Breeders' Cup meeting in November 2009 at Santa Anita in California, generating over 5% of international co-mingled stakes on the event.

betinternet

betinternet experienced a difficult start to the 2009 football season, primarily due to the number of matches which ended in a draw, especially in the English Premier League, falling substantially below the long term average. This short term change in result patterns coincided with a shift in our turnover towards the '90 minute' outcome, rather than on Asian Handicaps and this meant that we were more exposed than previously to the lack of draws at the start of the season. However, as the period progressed, results balanced out in our favour and we ended the period at a similar level to last year for fixed-odds betting. The shift in betting patterns has continued due to an increase in business on football from European customers, resulting in increased turnover in our higher-margin markets.

We have continued to increase the level of automation involved in the calculation of our website pricing, predominantly within our football markets and the further development of this remains the primary focus of our strategy for betinternet into 2010 across all sports. We have also continued with our horse racing sponsorship programme, with prominent activity at both Chepstow and York racecourses during the period.

We launched our 'Smart-phone' betting module in October 2009, which has been optimised for the iPhone. Turnover generated by this channel has increased on a monthly basis at a higher margin than that achieved previously through our standard internet interface.

As previously notified we have experienced a significant drop in turnover across our casino products compared with the same period last year. This was due to a lack of high-roller activity combined with a poor margin return from those customers that did play. The current global economic climate has had an impact on the expenditure of high-roller activity, although leisure play remains stable at previous levels.

Overview of results

Group turnover and gross profit have reduced to £56.4m (2008: £71.5m) and £1.5m (2008: £1.7m) respectively during the period under review. EWS' turnover grew by 22% to £18.4m (2008: £15.1m). betinternet's turnover decreased by 33% during the period to £37.9m (2008: £56.4m), largely due to the fall in casino activity. Overall, the gross margin increased by 0.21% to 2.59% (2008: 2.38%).

Administration expenses rose to £1.37m (2008: £1.32m) mainly because of the effect of the weakening GBP/USD exchange rate. Excluding exchange rate movements, administration expenses reduced by 3.6% during the period. We anticipate the realisation of further cost savings in the second half of the year due to the end of our existing lease arrangements and a reduction in our accommodation requirements going forward.

The Group made an operating loss of £51k during the period (2008: £256k profit) and recorded a pre-tax loss of £58k (2008: pre-tax profit of £252k).

Outlook

betinternet operates in an increasingly competitive marketplace and we continue to position our products to attract customers that will generate stable revenues for us. We have planned a review of our casinos and games offering and how these are integrated within betinternet's sportsbook - primarily the 'look and feel' and usability - and anticipate that these upgrades will be implemented in the second half of the financial year. We also plan to introduce some 'mini-games' onto the sports betting pages of betinternet's website to encourage more spontaneous gameplay.

Our growth strategy for EWS is unchanged, with its enhanced website offering being key to our future plans for the business. Although there remain a number of challenges within this business, particularly with regard to obtaining new content to wager on and the difficult economic environment overall, however, the board's view of the Group's prospects remains positive.

Denham Eke

Chairman

Webis Holdings Plc

Consolidated Income Statement

for the period ended 29 November 2009

Period to Period to Period to
29 November 30 November 31 May

(unaudited) (unaudited) (audited)
Note £000 £000 £000

Turnover 2 56,377 71,470 140,149
Cost of sales (54,899) (69,755) (136,718)
Betting duty paid (17) (14) (33)

Gross profit 1,461 1,701 3,398
Administration expenses (1,374) (1,320) (2,641)

Earnings before interest, tax, 87 381 757

depreciation and amortisation
Depreciation and amortisation (126) (114) (247)
Share based costs 3 (12) (11) (35)

Total operating (loss) / (51) 256 475

profit

Net finance cost 4 (7) (4) (23)

Tax 5 - - -

(Loss) / profit for the period (58) 252 452

Basic (loss) / profit per 6 (0.03) 0.12 0.22

share (pence)
Diluted (loss) / profit per 6 (0.03) 0.12 0.21

share (pence)

Consolidated Balance Sheet

As at 29 November 2009

Period to Period to Period to
29 November 30 November 31 May
Note 2009 2008 2009
(unaudited) (unaudited) (audited)
£000 £000 £000

Non-current assets
Intangible assets - Goodwill 43 43 43
Intangible assets - Software, 329 302 295

Website development and Trademarks
Property and equipment 93 104 110

Current assets
Receivables and prepayments 755 842 713
Cash and cash equivalents 1,425 1,164 1,502

2,180 2,006 2,215

Total assets 2,645 2,455 2,663

Current liabilities
Bank overdraft (345) (345) (205)
Trade and other payables (1,352) (1,340) (1,464)
Convertible loan note 7 - (300) -

(1,697) (1,985) (1,669)

Non-current liabilities
Convertible loan note 7 (300) - (300)

Total liabilities (1,997) (1,985) (1,969)

Net assets 648 470 694

Shareholders' equity
Called up share capital 2,068 2,068 2,068
Share premium 9,927 9,927 9,927
Share option reserve 96 60 84
Profit and loss account (11,443) (11,585) (11,385)

Total shareholders' equity 648 470 694

Statement of Changes in Shareholders' Equity

for the period ended 29 November 2009

Ordinary Share option reserve
share Share £000 Retained Total
capital premium earnings equity
£000 £000 £000 £000

Balance as at 25 May 2008 2,068 9,927 49 (11,837) 207

(audited)
Issue of ordinary shares - - - - -
Share based payments - share - - 11 - 11

options
Profit for the period - - - 252 252

Balance as at 30 November 2008 2,068 9,927 60 (11,585) 470

(unaudited)
Issue of ordinary shares - - - - -
Share based payments - share - - 24 - 24

options
Profit for the period - - - 200 200

Balance as at 31 May 2009 2,068 9,927 84 (11,385) 694

(audited)
Issue of ordinary shares - - - - -
Share based payments - share - - 12 - 12

options
Loss for the period - - - (58) (58)

Balance as at 29 November 2009 2,068 9,927 96 (11,443) 648

(unaudited)

Consolidated Statement of Cash Flows

for the period ended 29 November 2009

Period to Period to Period to
29 November 30 November 31 May

(unaudited) (unaudited) (audited)
£000 £000 £000

Net cash (outflow) / inflow (67) 34 663

from operating activities Cash flows from investing activities
Interest received - 7 7
Purchase of intangible assets (130) (146) (236)
Purchase of property and (13) (24) (66)

equipment

Net cash outflow from (143) (163) (295)

investing activities Cash flows from financing activities
Interest paid (7) (11) (30)

Net cash outflow from (7) (11) (30)

financing activities
Net (decrease) / increase in (217) (140) 338

cash and cash equivalents
Cash and cash equivalents at 1,297 959 959

beginning of period

Net cash and cash equivalents 1,080 819 1,297

at end of period

Cash and cash equivalents comprise
Cash and deposits 1,425 1,164 1,502
Bank overdraft (345) (345) (205)

1,080 819 1,297

Cash generated from operations
(Loss) / profit from (51) 256 475

operations Adjusted for:
Depreciation 126 114 247
Share-based payment charge 12 11 35
Increase in debtors (42) (195) (66)
Decrease in creditors (112) (152) (28)

Notes to the accounts

for the period ended 29 November 2009

1 Accounting policies

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 consolidate those of the Company and its subsidiaries (together

referred to as "the Group").

Statement of compliance

The consolidated interim financial statements have been prepared in accordance with IAS 34 "Interim Financial

Reporting". They do not include all the information required for full annual financial statements and should be read

in conjunction with the consolidated financial statements of the Group as at and for the period ended 31 May 2009.

Basis of preparation

The preparation of interim financial statements in conformity with IAS 34 "Interim Financial Reporting" requires

management to make judgements, estimates and assumptions that effect the application of policies and reported

amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on

historical experience, current and expected economic conditions, and various other factors that are believed to be

reasonable under the circumstances, the results of which form the basis of making judgements about carrying value of

assets and liabilities that are not readily apparent from other sources. Actual results may differ from these

estimates.

Going concern

The Directors have prepared projected cash flow information for the next 18 months and are satisfied that the Group

has adequate resources to meets its obligations as they fall due. The Directors consider that it is appropriate that

these interim financial statements are prepared on the going concern basis.

Basis of consolidation

(i) The consolidated financial statements incorporate the results of Webis Holdings Plc and its subsidiaries.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and

continue until the date that such control ceases.

(ii) Intragroup balances and income and expenses arising from intragroup transactions, are eliminated in preparing

the consolidated interim financial statements.

Foreign currency

The Group's financial statements are presented in Pounds Sterling, which is the Company's functional and

presentational currency. All subsidiaries of the Group have Pounds Sterling as their functional currency.

Foreign currency transactions are translated into the functional currency using the approximate exchange rate

prevailing at the dates of transactions. Foreign exchange gains and losses resulting from the settlement of foreign

currency transactions and from the translation at the period end exchange rate of monetary assets and liabilities

denominated in foreign currencies are recognised in the income statement.

Revenue recognition and turnover

Turnover represents the amounts staked in respect of bets placed by customers on events which occurred during the

period. Cost of sales represents payouts to customers, together with commissions and royalties payable to agents and

suppliers of software. Open betting positions are carried at open fair value.

Segmental reporting

Segmental reporting is based on a three segment format, of which the primary format is the business areas in

accordance with the Group's internal reporting structure and the secondary format is for geographical.

Financing costs

Interest payable on borrowings is calculated using the effective interest rate method.

Deferred income tax

Deferred taxation is provided in full, using the liability method, on timing differences arising between the tax

bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income

tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet

date and are expected to apply when the related deferred tax is realised. Deferred tax assets are recognised to the

extent that it is probable that future taxable profit will be available against which the temporary differences can

be utilised.

Intangible assets - Goodwill

Goodwill represents the excess of fair value consideration over the fair value of the identifiable assets and

liabilities acquired, arising on the acquisition of subsidiaries. Goodwill is included in non-current assets.

Goodwill is reviewed annually for impairment and is carried at costs less accumulated impairment losses. Goodwill

arising on acquisitions before the transition date of 29 May 2006 has been retained at the value at that date and is

no longer amortised but is tested annually for impairment.

Intangible assets - Other Website design & development 33.33%
Trademarks 33.33%
Software licences 33.33%

Property and equipment

Items of property and equipment are stated at historical cost less accumulated depreciation (see below) and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the balance sheet date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Assets are depreciated over their expected useful lives as follows:
Equipment 33.33%

Fixtures & fittings 33.33%

Impairment of assets

Goodwill arising on acquisitions and other assets that have an indefinite useful life and are not subject to amortisation are reviewed at least annually for impairment.
Other intangible assets, property and equipment are reviewed for impairment whenever there is an indication that the carrying amount of the asset may not be recoverable. If the recoverable amount of an asset is less than its carrying amount, an impairment loss is recognised. Recoverable amount is the higher of fair value less costs to sell and value in use.
If at the Balance Sheet date there is any indication that an impairment loss is recognised in prior periods for an asset other than goodwill that no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

Share based payments

For all the employee share options granted after 7 November 2002 and vesting on or after 29 May 2006, an expense is recognised in the income statement with a corresponding credit to equity. The equity share based payment is measured at fair value at the date of the grant. Fair value is determined by reference to option pricing models, principally the Black-Scholes model.
If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest.

Leasing

Payments made under operating leases are charged to the income statement on a straight line basis over the period of the lease.

Financial instruments

Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes party to the contractual terms of the instrument:
Trade and other receivables
Trade and other receivables do not carry any interest and are stated at their nominal amounts as reduced to equal the estimated present value of the future cash flows.

Cash and cash equivalents
Cash and cash equivalents defined as cash in bank and in hand as well as bank deposits and money held for processors. Cash and cash equivalents are held for the purpose of meeting short term cash commitments rather for investment or other purposes.

Bank borrowings
Interest bearing bank borrowings and overdrafts are recorded at the proceeds received net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs are charged on an accrual basis using the effective interest method and are added to the carrying amount of the instrument to the extent they are not settled in the period in which they arise.

Trade and other payables
Trade payables are non-interest bearing and are stated at fair value.

Convertible loans
Convertible loan notes are interest bearing and are stated at fair value.

Equity instruments
Equity instruments issued by the Group are recorded at proceeds received, net of direct costs.

2
Segmental Analysis

Period to
29 November

(unaudited)
£000

Period to
30 November

(unaudited)
£000

Period to
31 May

(audited)
£000

Turnover

Sportsbook
Far East
26,077
42,231
80,682

UK & Ireland
6,384
3,995
9,228

Europe
4,527
7,238
11,404

Rest of the World

2,920
6,557

Pari-mutuel
United States
8,131
5,917
13,742

Caribbean
10,315
9,169
18,536

----------

56,377
71,470
140,149

----------

(Loss) / profit before tax

Sportsbook

(334)

Pari-mutuel

288

Group

(12)

----------

(58)

----------

Net assets / (liabilities)

Sportsbook

(313)

Pari-mutuel

1,403

1,115

Group

(442)

----------

648

----------

3
Share based costs

Period to
29 November

(unaudited)
£000

Period to
30 November

(unaudited)
£000

Period to
31 May

(audited)
£000

Share options

12

----------

12

----------

4
Net finance cost

Period to
29 November

(unaudited)
£000

Period to
30 November

(unaudited)
£000

Period to
31 May

(audited)
£000

Bank interest receivable

-
7
7

----------

-
7
7

----------

Bank interest payable

(1)

Loan interest payable

(6)

----------

(7)

----------

Net finance cost

(7)

----------

5
Tax on (loss) / profit on ordinary activities

No provision for taxation is required for either the current or previous period, due to the zero per cent corporate tax regime in the Isle of Man.
Unprovided deferred tax was £Nil (2008: £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 period has not been reflected in the calculation of the diluted loss per share, as the effect would have been anti-dilutive.

Period to
29 November

(unaudited)
£000

Period to
30 November

(unaudited)
£000

Period to
31 May

(audited)
£000

(Loss) / profit for the period

(58)

----------

No.
No.
No.

Weighted average number of ordinary shares in issue
206,826,667
206,826,667
206,826,667

Diluted number of ordinary shares
206,826,667
206,826,667
226,498,798

--------------

Basic (loss) / earnings per share
(0.03)
0.12
0.22

Diluted (loss) / earnings per share
(0.03)
0.12
0.21

----------

7
Convertible loan note

Period to
29 November

(unaudited)
£000

Period to
30 November

(unaudited)
£000

Period to
31 May

(audited)
£000

Convertible loan note

----------

The Group issued a £300,000 secured convertible loan note to Burnbrae Limited on 23 February 2007. The loan note is secured over all the assets and undertakings of the Group and bears interest at the rate of LIBOR plus 4%. The loan was due to be repaid on 23 February 2009 but the Group has agreed with Burnbrae Limited to extend the loan facility, under the same interest terms, for a further two years and is now repayable on 25 February 2011.
8
Preparation of the interim statements

The interim statements are unaudited, but have been reviewed in accordance with International Standards on Review Engagements 2410, by our independent auditors, KPMG Audit LLC.
The comparatives for the 53 weeks ended 31 May 2009 are not the Group's full statutory accounts for that financial period. Those accounts have been reported on by the Group's auditors and delivered to the Companies Registry. The report of the auditors was unqualified.

9
Approval of interim statements

The interim statements were approved by the board on 01 February 2010 The interim report is expected to be posted to shareholders on 8 February 2010 and will be available from that date at the Group's Registered Office: Viking House, Nelson Street, Douglas, Isle of Man IM1 2AH.

The Group's nominated advisor and broker is Evolution Securities, Kings House, 1 Kings Street, Leeds LS1 2HH.

End

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

IR BRGDDUGGBGGD

RNS Number : 2754D Webis Holdings PLC 01 December 2009

Webis Holdings plc ("the Company")

Horse Racing Sponsorship

The Board of Webis Holdings plc, the global on-line gaming group, is pleased to announce its planned horse racing sponsorship for this coming weekend.

betinternet.com has agreed to be the title sponsor at the 'Tingle Creek' meeting to be held at Sandown Park racecourse on Friday 4 and Saturday 5 December 2009. Four races on each day will carry the betinternet.com brand, including 'The Best Odds Guaranteed at betinternet.com Handicap Hurdle', a listed race over 2 miles and ½ furlong and the second running of 'The betinternet.com London National Steeple Chase', a handicap over 3 miles and 5½ furlongs. Three of the races on Saturday will be shown live on Channel 4 in the UK, with all eight races being shown live on the Racing UK channel.

The Company will have complete branding coverage throughout the racecourse area. All races will be branded under the Company's sportsbook portal, betinternet.com.

For further information:

Webis Holdings plc Garry Knowles, Managing Director Telephone: 01624 698141

End

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

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