TIDMTWL
RNS Number : 0145F
Weather Lottery PLC (The)
15 April 2011
THE WEATHER LOTTERY PLC
Ticker: TWL
("The Weather Lottery", "TWL" or the "Company")
Half Year Results for the Six-Months to 31 January 2011
Dated: 15 April 2011
Chairman's Statement
It is now one year since the new Board took control of The
Weather Lottery Plc (TWL). In that time TWL has expanded its range
of activities and the products it offers beyond its core Lottery
Services operation.
On January the company announced the full year's figures to July
31(st) 2010. The Directors took the view on the information
available to them that the trading in the FC Betz Limited
subsidiary was of a satisfactory order. In taking this view they
had regard to the capital value in the multi-year contracts entered
into with a number of the Football clubs to whose database FC Betz
had exclusively contracted to provided Gaming and Lottery products
and services. However following a strategic six-month review in
February it became clear that FC Betz was not able to access the
full databases under the contracts.
Legal advice received has advised the Board that in certain
cases FC Betz cannot access the full database to which it believes
it is contractually entitled because of prior third party claims to
the same Intellectual Property Rights in the database. On the basis
of this inability to access its contractual IPR rights FC Betz is
renegotiating the terms of the contracts at a much lower fee with a
view to terminating the agreements at the end of this season next
month. Although if successful the renegotiations may give rise to
an extraordinary profit in the future on professional advice the
Board believes it prudent to charge the full pro rata cost, before
any potential re-negotiated reductions to the contracts to the
P&L Account and not capitalise any of the rights. This item
constitutes a significant part of the half-year losses of
GBP321,000.
In addition you may have seen the announcement relating to the
charges that have been laid against K Millhench and one other
ex-employee accused of defrauding the company of some GBP80,000. As
a result of further progress with the criminal case the Company is
now satisfied it knows the full extent of the losses from this
matter and that is included and fully provided for in the amount of
half-year loss. In fact the company holds certain assets by way of
security from Mr Millhench against these losses but for legal
reasons related to the on-going trial it is not possible to realise
these assets at present.
However on a brighter note I am pleased to report that the
group's assets have increased significantly enabling the company to
undertake larger acquisitions. Notwithstanding the events above TWL
still trades without the burden of any bank debt.
The Lottery business has now been stabilised thanks to the
efforts of Robert White and his new team. It is now showing signs
of growth with new corporate clients, new subscribers and the
investment in new lottery brands such as FCLotto. The costs of
managing the Lottery division have been considerably reduced during
this period and the Board looks forward to a profitable
contribution at an operating level from now on.
Notwithstanding the matters referred to in the opening
paragraphs of this statement The FC Betz subsidiary has gone from
pre revenue to over 2500 active players which have resulted in a
small first time operating profit in January. Whilst the board
accepts this as an important milestone we also recognise that this
is a very competitive marketplace and we must continue to seek
better value from our investments in this business and create
complimentary marketing initiatives to drive traffic to the brand.
It remains to be seen whether the business can make a meaningful
contribution to profit given the contractual difficulties it has
experienced
The acquisition of Devilfish the well-known on-line Poker brand
in December 2010 has provided TWL with another revenue stream and a
database of over 20,000 registered players which will enable us to
promote our other products and services to. The board believes that
now we have stripped out considerable and unnecessary operating
costs of the Poker operation and removed the burden of the costs of
listing on the plus market.
The company is actively pursuing other acquisitions and
opportunities in related fields and hopes to make an announcement
shortly. TWL as stated above has no bank debt and contemplates a
further fund raising to assist with these acquisitions and
development of existing and new opportunities
The Right Hon Lord E T Razzall CBE
Chairman
For further information contact:
The Weather Lottery PLC
Ross White 01777 818036
Website www.theweatherlottery.com
Religare Capital Markets (Nomad) 020 7444 0800
Nick Harriss/Peter Trevelyan-Clark
SVS Securities (Broker) 020 7638 5600
Ian Callaway/Alex Mattey
CONDENSED CONSOLIDATED INCOME STATEMENT
Period Period Year
ended ended ended
31 Jan 31 Jan 31 Jul
2011 2010 2010
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Revenue 668 633 1,231
Cost of Sales 461 392 317
------------ ------------ ----------
Gross Profit 207 241 914
Administrative expenses (521) (228) (983)
Profit from operations (314) 13 (69)
Finance expenses (7) - (8)
Finance income - - -
------------ ------------ ----------
Profit before taxation (321) 13 (77)
Taxation - -
------------ ------------ ----------
Attributable to equity
holders (321) 13 (77)
Basic (loss)/profit
per ordinary share 2 (0.14)p 0.02p (0.08)p
------------ ------------ ----------
Fully diluted (loss)/profit
per ordinary share 2 (0.13)p 0.02p (0.07)p
------------ ------------ ----------
All results derive from continuing operations.
There are no recognised income or expenses other than the loss
for the period.
CONDENSED CONSOLIDATED BALANCE SHEET
Period Period Year
ended ended ended
31 Jan 31 Jan 31 Jul
2011 2010 2010
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and
equipment 64 5 4
Goodwill 572 158 158
Intangible assets 30 - 18
------------ ------------ ----------
666 163 180
------------ ------------ ----------
Inventories 8 - 2
Trade and other receivables 365 20 329
Cash and cash equivalents 32 35 48
------------ ------------ ----------
405 55 379
------------ ------------ ----------
Total Assets 1,071 218 559
------------ ------------ ----------
LIABILITIES
Current liabilities
Trade and other payables 722 184 354
Current tax liabilities - - -
------------ ------------ ----------
722 184 354
------------ ------------ ----------
Net Assets 349 34 205
------------ ------------ ----------
EQUITY
Capital and reserves
attributable to equity
holders
Called up share capital 3 268 99 186
Share premium account 859 302 476
Retained earnings (778) (367) (457)
------------ ------------ ----------
Total equity 349 34 205
------------ ------------ ----------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Retained
Capital Premium Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 August
2009 83 302 (380) 5
Issue of new shares 16 - - 16
Profit for the period - - 13 13
Balance at 31 January
2010 99 302 (367) 34
Issue of new shares 87 174 - 261
Loss for the period - - (90) (90)
Balance at 31 July
2010 186 476 (457) 205
Issue of new shares 82 383 - 465
Profit for the period - - (321) (321)
Balance at 31 January
2011 268 859 (778) 349
-------- -------- --------- --------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Period Period Year
ended ended ended
31 Jan 31 Jan 31 Jul
2011 2010 2010
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Net cash (used in) operations 4 (22) (23) (69)
Interest and financing
costs (7) - (8)
Net cash(outflow) from
operating activities (29) (23) (77)
------------ ------------ ----------
Cash flow from investing
activities:
Acquisition of subsidiary
undertakings (40) - -
Purchase of tangible assets (73) - (18)
Net cash generated from
investing activities (113) - (18)
------------ ------------ ----------
Cash flow from financing
activities:
Net proceeds from issue
of shares 126 - 85
Net cash generated from
financing activities 126 - 85
------------ ------------ ----------
(Decrease)/increase in cash
and cash equivalents (16) (23) (10)
Cash and cash equivalents
at beginning of period 48 58 58
Cash and cash equivalents
at end of period 32 35 48
------------ ------------ ----------
NOTES TO THE INTERIM FINANCIAL REPORT
1. Accounting policies
Basis of Accounting and Preparation
These interim results for the six months ended 31 January 2011
have been prepared using the historical cost and fair value
conventions on the basis of the accounting policies set out below.
This interim report has been prepared in accordance with IFRS's, it
is not in accordance with IAS 34 and therefore is not fully
compliant with IFRS.
These interim results have been prepared under the historical
cost convention. Areas where other bases are applied are identified
in the accounting policies below.
The financial information set out in this interim report does
not constitute statutory accounts as defined in the Companies Act
2006. The Company's statutory financial statements for the year
ended 31 July 2010 have been filed with the Registrar of Companies.
The auditor's report on those financial statements was unqualified,
did not include a reference to any matters which the auditor drew
attention by way of emphasis without qualifying their report and
did not contain a statement under section 498(2) or (3) of the
Companies Act 2006.
This announcement contains certain forward-looking statements
with respect to the operations, performance and financial position
of the Groyup. By their nature, these statements involve
uncertainty since future events and circumstances can cause results
and developments to differ materially from those anticipated. The
forward-looking statements reflect knowledge and information
available at the date of the preparation of this announcement and
the Company undertakes no obligation to update these
forward-looking statements. Nothing in this Interim Financial
Report should be construed as a profit forecast.
The results for the six months ended 31 January 2011 were
approved by the Board on 15 March 2011.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 January and 31 July each year.
Control is achieved where the Company has the power to govern the
financial and operating policies so as to obtain benefits from its
activities.
Business combinations
The purchase method of accounting is used for all acquired
businesses as defined by IFRS3 - Business Combinations.
As a result of the application of the purchase method of
accounting, goodwill is initially recognised as an asset being the
excess at the date of acquisition of the fair value of the purchase
acquisition consideration plus directly attributable costs of
acquisition over the net fair values of the identifiable assets,
liabilities and contingent liabilities of the subsidiaries
acquired.
Goodwill arising on acquisitions before the date of transition
to IFRS is subject to alternative policies for valuation as
described below.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Intangible assets
An intangible asset is considered identifiable only if it is
separable or arises from contractual or other legal rights,
regardless of whether those rights are transferable or separable
from the entity or from other rights and obligations.
For intangible assets with finite useful lives, amortisation is
calculated so as to write off the cost of an asset less its
estimated residual value over its economic life as follows:
Software development - 10 years
Website development costs - 3 years
In addition to amortisation, at each balance sheet date the
Group reviews the carrying amounts of its intangible assets to
determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Recoverable amount is
the higher of fair value less costs to sell and value in use. An
impairment loss is recognised as an expense immediately, unless the
relevant asset is carried at a re-valued amount, in which case the
impairment loss is treated as a revaluation decrease. Where an
impairment loss subsequently reverses, the carrying amount of the
asset is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no
impairment loss been recognised for the asset in prior years.
Financial instruments
Financial assets and financial liabilities are recognised on the
Group's balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
Trade receivables
Trade receivables do not carry any interest and are stated at
their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts.
Financial liability and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual agreements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the Group after deducting all of
its liabilities. Equity instruments are recognised at the amount of
proceeds received net of costs directly attributable to the
transaction. To the extent that those proceeds exceed the par value
of the shares issued they are credited to a share premium
account.
Trade payables
Trade payables are not interest-bearing and are stated at their
nominal value.
Goodwill
Goodwill arising on consolidation represents the excess cost of
acquisition over the group's interest in the fair value of the
identifiable assets and liabilities of a subsidiary, associate or
jointly controlled entity at the date of acquisition.
Goodwill is recognised as an asset and reviewed for impairment
at least annually. Any impairment is recognised immediately in the
income statement and is not subsequently reversed. Goodwill arising
on acquisition before the date of transition to IFRS has been
retained at the previous UK GAAP amounts subject to being tested
for impairment at that date.
On disposal of a subsidiary, associate or jointly controlled
entity, the attributable amount of goodwill is included in the
determination of the profit or loss on disposal.
Revenue recognition
Revenue represents takings received for entry into the prize
draws. The revenue is recognised upon receipt of the money for the
period that the draws take place, net of VAT and other
sales-related taxes.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
The charge for taxation is based on the taxable profit or loss
for the period and takes into account taxation deferred because of
timing differences between the treatment of certain items for
taxation and accounting purposes. Current tax is provided at
amounts expected to be paid (or recovered) using the tax rates and
laws that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the balance sheet date
where transactions or events that result in an obligation to pay
more, or a right to pay less, tax in the future have occurred at
the balance sheet date. Timing differences are differences between
the Group's taxable profits and its results as stated in the
financial information that arises from the inclusion of gains and
losses in tax assessments in periods different from those in which
they are recognised in the financial information.
A net deferred tax asset is regarded as recoverable and
therefore recognised only when, on the basis of all available
evidence, it can be regarded as more likely than not that there
will be suitable taxable profits from which the reversal of the
underlying timing differences can be deducted.
Deferred tax is measured at the tax rates that are expected to
apply in the periods in which the timing differences are expected
to reverse based on tax rates and laws that have been enacted or
substantively enacted at the balance sheet date. Deferred tax is
measured on a non-discounted basis.
2. Earnings per ordinary share
The calculation of basic earnings per share is based on the
results and weighted average number of ordinary shares as
follows:
Period ended Period ended Year ended
31 Jan 31 Jan 31 Jul
2011 2010 2010
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Attributable to equity (321) 13 (77)
------------- ------------- ------------
Weighted average number of
ordinary shares:
Basic 227,915,849 85,403,087 101,942,173
Fully diluted 251,915,849 85,403,087 105,942,173
------------- ------------- ------------
The fully diluted number of ordinary shares includes 24 million
options, to subscribe for Ordinary shares of 0.1p each, which were
issued in June 2010. None of these options have been exercised in
the period.
3. Share capital
As at As at As at
31 Jan 31 Jan 31 Jul
2011 2010 2010
GBP'000 GBP'000 GBP'000
Issued and fully paid:
267,638,071 ordinary shares of 0.1p each 268 99 186
-------- -------- --------
4. Cash used in Operations
Period ended Period ended Year ended
31 Jan 31 Jan 31 Jul
2011 2010 2010
GBP'000 GBP'000 GBP'000
(Loss)/Profit from operations (314) 13 (69)
Depreciation of tangible assets 13 - 2
Share based payments - - 32
(Increase) in inventories (6) - -
(Increase) in debtors (36) (4) (155)
Increase/(decrease) in creditors 321 (32) 121
Cash (used in) operations (22) (23) (69)
------------- ------------- -----------
5. Interim Financial Report
The unaudited interim financial report, which is the
responsibility of the directors and was approved by them on 15
March 2011 does not constitute statutory accounts within the
meaning of Section 435 of the Companies Act 2006.
This report is available on The Weather Lottery's website at
www.theweatherlottery.com. Copies are available from the Company at
its registered office:
Derby House Stud, Retford Road, Mattersey, Doncaster, DN10 5HJ
for a period of one month, free of charge.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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