TIDMWEB
RNS Number : 9139Q
Webis Holdings PLC
24 February 2023
For immediate release 24 February 2023
Webis Holdings plc
("Webis" or "the Group")
Interim Report and Financial Statements for the period ended 30
November 2022
Webis Holdings plc, the global gaming group, today announces its
unaudited Interim Report and Accounts for the period ended 30
November 2022.
Denham Eke, Non-executive Chairman stated:
"Our principal subsidiary, WatchandWager.com ("WatchandWager"),
had a mixed start to the first six months of the financial year.
Trading was strong during the summer months, where we enjoyed
excellent commission levels from Saratoga (NY) and Del Mar (CA). On
a less positive note, trading was difficult during the months of
September, October, and November. Group amounts wagered were US$
38.2 million, turnover was US$ 6.23 million, resulting in a loss on
the period of US$ 0.33 million, largely due to the exceptionally
adverse weather conditions. I remain extremely confident as we
approach the spring months that trading will improve in line with
expectations, especially as we roll out our new Business to
Customer marketing strategy".
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK domestic law by virtue of the European Union (Withdrawal) Act
2018 ("MAR"), and is disclosed in accordance with the Company's
obligations under Article 17 of MAR.
For further information:
Webis Holdings plc Beaumont Cornish Limited
Denham Eke Roland Cornish/James Biddle
Tel: 01624 639396 Tel: 020 7628 339
Group at a Glance
Webis Holdings plc (the "Company") and its subsidiary companies
(together the "Group") operates two primary segments: -
WatchandWager.com Ltd and WatchandWager.com LLC - Advanced
Deposit Wagering ("ADW")
WatchandWager.com LLC - Cal Expo Harness Racetrack
WatchandWager.com Ltd is regulated in the Isle of Man and
operates a totalisator wagering hub through its United States Tote
supplier, which enables it to conduct its ADW business by passing
wagers directly into global racetrack betting pools in real
time.
WatchandWager.com LLC has its operational base in Lexington,
Kentucky, with its head office in Larkspur, California, and
provides pari-mutuel wagering, or pool-betting, services through a
number of distribution channels to a global client base. The
company holds United States pari-mutuel licences for its ADW
business in the USA, including a multi-jurisdictional licence
issued by the States of North Dakota, and individual licences for
the States of California, Maryland, Colorado, Minnesota, New York,
Washington, and Kentucky. The business provides wagering
opportunities predominantly on horse racing and is contracted with
a significant number of prestigious racetrack partners within the
United States, namely Churchill Downs Inc, Monarch Content
Management, the New York Racing Association, Penn Gaming and all
other major track operators in the USA. Internationally, the
company has contracts with Hong Kong, France, Canada, United
Kingdom, Ireland, Australia, and South Africa amongst many others.
The service provides wagering facilities to customers through its
interactive website, watchandwager.com, as well as offering a
business-to-business wagering product.
WatchandWager.com LLC also operates Cal Expo Harness Racetrack
in Sacramento, California, under a licence issued by the California
Horse Racing Board. This 'bricks and mortar' presence in the
largest State economy in the USA continues to provide leverage for
our related global pari-mutuel operations. The current lease at Cal
Expo extends to 2030.
As part of the requirements for the Isle of Man licence, client
funds for the Isle of Man licensed companies are held in fully
protected segregated client accounts within an Isle of Man
regulated bank.
Chairman's Statement
Introduction
Our principal subsidiary, WatchandWager.com ("WatchandWager"),
has had a mixed start to the first six months of the year. Trading
was strong during the summer months, where we enjoyed excellent
commission levels from Saratoga (NY) and Del Mar (CA). In addition,
we received better than expected "dark money" commissions (being
statutory revenues from wagers placed by Californian residents on
global content) from our licensed racetrack at Cal Expo. During the
period when we were not physically racing, under California Horse
Racing Board rules, we are entitled to a percentage of revenues
derived from Californian residents. On a less positive note,
trading was difficult during the months of September, October, and
November. These conditions continued into the winter, principally
due to unprecedented severe weather conditions leading to a lack of
content, experienced both by us and by many of our global racetrack
partners.
Nevertheless, we remain optimistic about the future of the
operation. Following a number of test marketing campaigns, we are
particularly encouraged by the growth in our B2C division, where we
are experiencing a consistent increase in the prior years' levels
of wagers placed. This has been helped by our recently signed
contract with Monarch Content Management, as previously announced,
with more detail below. As a result, we have developed a new
marketing strategy which we will implement in the second quarter of
this year, following which we expect trading to improve
significantly in the spring and summer of 2023.
Half Year Results Review
Group amounts wagered were US$ 38.2 million, down 4% on prior
year (2021: US$ 39.9 million). Turnover reported was US$ 6.23
million (2021: US$ 6.80 million), with gross profit achieved of US$
1.99 million (2021: US$ 2.18 million). This resulted in a loss on
the period of US$ 0.33 million (2021: loss of US$ 0.07
million).
Operating costs showed a small increase to US$ 2.31 million
(2021: US$ 2.22 million), arising from a general increase in cost
of living. Cash and cash equivalents stand at US$ 2.80 million (31
May 2022: US$ 3.06 million).
Operations Update
Business-to-Consumer (B2C)
This division performed well over the period and continues to do
so. Most importantly, it now contributes the majority (75% over the
period) of our gross margin as compared to the Business-to-Business
division.
We have experimented with a variety of online marketing
techniques to promote our website and mobile operation,
particularly through Facebook and other channels. We specifically
targeted high-margin states, most notably Florida, with tailored
content. This derived a positive return on investment. However,
given the downturn in our other business streams later in the
period, we temporarily paused these initiatives, but we fully
intend to roll out the entire programme with effect from April
2023.
Whilst not neglecting other sectors of business, the Board now
recognises that the growth of the B2C sector is our best avenue of
opportunity, but one that we have neglected in the past. Our stated
objective is to double our player numbers on our platform by the
end of 2024. On known metrics, this would provide a sustainable
level of profitability for the company, on top of all our other
revenue streams.
Business-to-business (B2B)
This continues to be an important sector of our division, but
is, and most probably will continue to be, both difficult to manage
and maximize margin. As stated on several occasions, the market is
simply getting tougher, with the big players dominating and certain
operators willing to take wagers at an almost zero percent margin.
This is not now a model that we are particularly interested in for
obvious reasons. That said, we will not abandon this division and
never knowingly turn down business as long as it is conducted in a
legal, licensed and regulated fashion.
Cal Expo
Following the end of racing in May 2022, we enjoyed very strong
revenue levels from "dark money". We commenced live racing
operations on 5 November 2022, with initial performance being very
strong, both in terms of horse population and the level of wagers
placed. Unfortunately, after that, we experienced torrential
volumes of rainfall throughout northern California. This resulted
in the cancellation of seven race meetings, which obviously had
significant impact on the operation. We have Health and Safety
obligations to our equine and human participants at the track and,
of course, without live racing, revenue levels were below
normal.
On a more positive note, at time of writing, conditions have
significantly improved in California, and we expect very strong
trading through the racetrack until our scheduled end-of-season in
late April.
Licenses
USA
I am pleased to report that we have successfully renewed our
entire portfolio of licenses in the USA. Most importantly, we were
approved by the Californian Horse Racing Board for our Advanced
Deposit Wagering license until the end of 2024. Combined with that,
as shareholders are aware, we have the exclusive right to continue
live operations at Cal Expo until 2030.
Whilst California is our key priority, I can also report that
all our licenses in key states have been further extended, the most
notable of which are in New York, Kentucky, Washington State, and
multiple other important states. We consider our array of licenses
to continue to be a key asset to the Group.
Isle of Man
I am also pleased to report that during the period we renewed
our license with the Isle of Man Gambling Supervision Commission
for a further five years. Whilst we consider the US to be our main
avenue for growth, we also believe as amongst the very first
license holders within the Isle of Man regulatory environment, that
this license is also a key asset to the Group and offers a
significant protection for our customer base.
Content
Based on competitor research, we know that we offer the widest
range of live content of any tote website in the world, both within
the USA and internationally. Unfortunately, we have not yet been
able to properly capitalise upon the extent of this coverage. Given
our stated objective to grow player numbers following the roll-out
of an improved web site and mobile ap, accompanied with renewed
market initiatives, we see no reason why these contractual
relationships should not be extended both middle and long term.
Most importantly, as announced on the 23 December 2022, we
signed a significant agreement with Monarch Management Content
throughout 2023. This has had an immediate and positive impact on
our B2C business, and there is no reason why this relationship
should not continue given our good compliance record and our
current assets in the USA.
Compliance
There were no compliance issues reported to our various
regulators during the period.
Health & Safety
There were no health and safety issues to report across the
entire Cal Expo operation, where equine and participant welfare
remain our highest priority. Clearly, operations have been very
difficult at the racetrack in the recent period, and I would
particularly like to thank all our staff and associated partners
for their commitment to equine and human welfare.
Outlook
Short term
As stated, we have had a difficult period post October 2022.
Despite that, I remain extremely confident as we approach the
spring months that trading will improve in line with
expectations.
In particular, the Board has been very pleased with the
performance of our B2C operations, which has continued to show
consistent year-on-year growth compared to the same period last
year. It is a key focus to continue this momentum going
forward.
Longer term
Arizona Downs project
As previously announced, we have a contract to operate live
racing at this facility with a planned start date of September
2023. At present, we are simply awaiting our license hearing from
the Arizona Gaming Commission. We expect this to be completed no
later than the end of March 2023, but will inform shareholders if
these dates change. We see this as an important revenue earner in
its own right, but also as support for our Cal Expo operations. In
addition, it would provide us with extra leverage outside of
California.
USA Expanded Gaming
During the period, shareholders will be aware of the failure of
Proposition 26 and 27 to approve various forms of sports betting in
California (November 2022). Contrary to general opinion, this was a
very positive result for WatchandWager, as we had been deliberately
excluded from the 26 vote, and the 27 vote made little commercial
sense.
As a licensed operator within California until at least 2030, we
are well positioned in this potential market which is of course
arguably the biggest new growth opportunity for sports betting
globally. We are of the view that public referendums will not work,
and most participants have learned the lesson from this. At time of
writing, we are aware of at least two draft new bills at the Senate
level in Sacramento, only two miles away from our licensed
racetrack. We believe legalised sports betting will inevitably
happen in California for two reasons. Firstly, the market demand is
too strong, and the public want to be able to bet in a legal and
licensed manner, rather than with illegal offshore operators.
Secondly, the economics are compelling, as initiatives in New York,
New Jersey and other states have shown. California is now
predicting a significant budget deficit into 2023 and 2024,
primarily due to the downturn in within the technology, social
media, and other associated industries. Pressure can only mount in
the state Capitol for legalisation and the accompanying tax
revenue. Optimistically, a bill could be live by 2024 and, of
course, will only be permitted to licensed operators including
ourselves.
Strategy
The Board is currently engaged in a strategy review of our key
business sectors. We are convinced the strategy for growth is to
build on our successes in the B2C sector and grow our many licensed
assets. We will be issuing an update to shareholders on this
strategy by end April 2023.
Acquisitions and Mergers
We remain very optimistic regarding the business, especially our
B2C and live racetrack operations in CA, and AZ in the future.
However, we do know that the entire industry is a game of scale
with the big becoming bigger and some of the smaller operators
struggling. We are aware that we are probably in the middle of the
pack, and we remain open to all discussions with credible licensed
operators throughout the world in relation to merger and
acquisition opportunities at an operating business level, providing
they operate in a licensed and regulated environment and pass due
diligence.
Finally, I would like to thank all our shareholders, customers,
and our staff in the various jurisdictions for their loyalty and
support of the business.
Denham Eke
Non-executive Chairman
23 February 2023
Condensed Consolidated Statement of Comprehensive Income
For the period ended 30 November 2022
Period to
30 November
Period to 2021
30 November
2022 (unaudited) (unaudited)
Note US$000 US$000
-------------------------------------------- ----- ------------------- --------------
Amounts wagered 38,241 39,849
-------------------------------------------- ----- ------------------- --------------
Turnover 3 6,226 6,795
Cost of sales (4,185) (4,566)
Betting duty paid (52) (53)
-------------------------------------------- ----- ------------------- --------------
Gross profit 1,989 2,176
-------------------------------------------- ----- ------------------- --------------
Operating costs (2,307) (2,220)
Other gains / (losses) 12 (3)
-------------------------------------------- ----- ------------------- --------------
Other income 62 39
Operating loss (244) (8)
-------------------------------------------- ----- ------------------- --------------
Finance costs 4 (81) (62)
-------------------------------------------- ----- ------------------- --------------
Loss before income tax (325) (70)
-------------------------------------------- ----- ------------------- --------------
Income tax expense 5 - -
-------------------------------------------- ----- ------------------- --------------
Loss for the period (325) (70)
-------------------------------------------- ----- ------------------- --------------
Other comprehensive income for the period - -
-------------------------------------------- ----- ------------------- --------------
Total comprehensive loss for the period (325) (70)
-------------------------------------------- ----- ------------------- --------------
Basic and diluted earnings per share for
loss attributable to the equity holders of
the Company during the period (cents) 6 (0.08) (0.02)
-------------------------------------------- ----- ------------------- --------------
Condensed Consolidated Statement of Financial Position
As at 30 November 2022
As at Year ended
30 November 2022 31 May 2022
(unaudited) (audited)
Note US$000 US$000
------------------------------------------- ----- -------------------- --------------
Non-current assets
Intangible assets 7 11 11
Property, equipment and motor vehicles 674 724
Bonds and deposits 100 100
------------------------------------------- ----- -------------------- --------------
Total non-current assets 785 835
------------------------------------------- ----- -------------------- --------------
Current assets
Bonds and deposits 883 883
Trade and other receivables 1,033 1,190
Cash, cash equivalents and restricted cash 8 3,904 4,1 39
------------------------------------------- ----- -------------------- --------------
Total current assets 5,820 6,212
------------------------------------------- ----- -------------------- --------------
Total assets 6,605 7,047
------------------------------------------- ----- -------------------- --------------
Equity
Called up share capital 6,334 6,334
Share option reserve 42 42
Retained losses (5,383) (5,058)
------------------------------------------- ----- -------------------- --------------
Total equity 993 1,318
------------------------------------------- ----- -------------------- --------------
Current liabilities
Trade and other payables 3,526 3,640
Loans, borrowings and lease liabilities 9 99 1 09
------------------------------------------- ----- -------------------- --------------
Total current liabilities 3,625 3,749
------------------------------------------- ----- -------------------- --------------
Non-current liabilities
Loans, borrowings and lease liabilities 9 1,987 1,980
Total non-current liabilities 1,987 1,980
------------------------------------------- ----- -------------------- --------------
Total liabilities 5,612 5,729
------------------------------------------- ----- -------------------- --------------
Total equity and liabilities 6,605 7,0 47
------------------------------------------- ----- -------------------- --------------
Condensed Consolidated Statement of Changes in Equity
For the period ended 30 November 2022
Called up Share option Retained Total
share capital reserve earnings equity
US$000 US$000 US$000 US$000
Balance as at 31 May
2021 (audited) 6,334 42 (4,684) 1,692
Total comprehensive income
for the period:
Loss for the period - - (70) (70)
Balance as at 30 November
2021 (unaudited) 6,334 42 (4,754) 1,622
--------------------------- --------------- ------------- ---------- --------
Called up Share option Retained Total
share capital reserve earnings equity
US$000 US$000 US$000 US$000
Balance as at 31 May
2022 (audited) 6,334 42 (5,058) 1,318
Total comprehensive income
for the period:
Loss for the period - - (325) (325)
Balance as at 30 November
2022 (unaudited) 6,334 42 (5,383) 993
--------------------------- -------------- ------------ --------- -------
Condensed Consolidated Statement of Cash Flows
For the period ended 30 November 2022
Period to Period to
30 November 30 November
2022 2021
(unaudited) (unaudited)
Note US$000 US$000
------------------------------------------------------------- ---- -------------- --------------
Cash flows from operating activities
Loss before income tax (325) (70)
Adjustments for:
* Depreciation 50 49
* Amortisation of intangible assets 3 4
* Loan interest paid 4 51 50
* (Increase) / decrease in movement of restricted cash* (27) 752
* Increase in lease liabilities 30 12
* Other foreign exchange movements (168) (5)
Changes in working capital:
* Decrease in receivables 157 476
* Decrease in payables (114) (1,336)
Cash flows used in operations (343) (68)
Bonds and deposits utilised in the course
of operations - -
Net cash used in operating activities (343) (68)
------------------------------------------------------------- ---- -------------- --------------
Cash flows from investing activities
Purchase of intangible assets (3) -
Purchase of property, equipment and motor
vehicles - -
Net cash used in investing activities (3) -
------------------------------------------------------------- ---- -------------- --------------
Cash flows from financing activities
Loan interest paid 4 (51) (50)
Increase / (payment) of lease liabilities
- principal 7 (8)
Payment of lease liabilities - interest 4 (30) (12)
Repayment of loans and borrowings (10) (3)
Net cash used in financing activities (84) (73)
------------------------------------------------------------- ---- -------------- --------------
Net decrease in cash and cash equivalents (430) (141)
Cash and cash equivalents at beginning of
year 3,062 3,238
Exchange gains on cash and cash equivalents 168 3
Cash and cash equivalents at end of period 2,800 3,100
------------------------------------------------------------- ---- -------------- --------------
*(Increase) / decrease in movement of restricted cash, has been
reclassified to Operating activities from Cash and cash
equivalents. The reclassification has been made to achieve better
presentation, as the restricted cash relates to player liabilities,
which is part of the operating activity of the Group. The impact of
this reclassification on net cash used in operating activities is a
decrease of USD 0.752 million on the total as previously reported
of USD 0.820 million for the period to 30 November 2021.
Notes to the Unaudited Condensed Consolidated Interim Financial
Statements
For the period ended 30 November 2022
1 Reporting entity
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 interim
financial statements as at and for the period ended 30 November
2022 consolidate those of the Company and its subsidiaries
(together referred to as the "Group").
1.1 Basis of accounting
The unaudited condensed consolidated financial statements of the
Group (the "Financial Information") are prepared in accordance with
Isle of Man law and UK Adopted - International Accounting Standards
post Brexit. 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 2022 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
2022.
The unaudited condensed consolidated financial statements do not
constitute statutory financial statements. The statutory financial
statements for the year ended 31 May 2022, extracts of which are
included in these unaudited condensed consolidated financial
statements, were prepared under UK Adopted - International
Accounting Standards post Brexit and have been filed at Companies
Registry.
1.2 Use of judgements and estimates
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 2022 as
set out in those financial statements.
1.3 Functional and presentation currency
Items included in the unaudited condensed consolidated financial
statements are measured using the currency of the primary economic
environment in which the entity operates ('the functional
currency'). As the primary activities of the Group and the primary
transactional currency of the Group's customers are carried out in
US Dollars, the unaudited condensed consolidated financial
statements have been presented in US Dollars. The determination of
the presentation currency does not involve significant judgement as
the primary activities of the Group are in US Dollars.
1.4 Going Concern
As noted within the statutory financial statements for the year
ended 31 May 2022, the Directors have continued to undertake
several strategies to support and sustain the Group as a going
concern. These include, seeking to broadening its client base and
expand its business to customer base, renewing various US state
licenses, along with continuing to develop and expand the Cal Expo
racetrack operations, and monitoring the status of sports betting
legislation within the State of California, all of which remain key
priorities for the Group in achieving its goal of profitability and
maintaining adequate liquidity in order to continue its operations.
While the Directors continue to assess all strategic options in
this regard, the ultimate success of strategies adopted remains
difficult to predict.
Based on the above, along with the continued support of the
Company's principal shareholder, via Galloway Limited, a related
party, the Directors believe that the Group has adequate resources
to meet its obligations as they fall due.
2 Operating Segments
A. Basis for segmentation
The Group has the below two operating segments, which are its
reportable segments. The segments offer different services in
relation to various forms of pari-mutuel racing, which are managed
separately due to the nature of their activities.
Reportable segments and operations provided
Racetrack operations - hosting of races through the management
and operation of a racetrack facility, enabling patrons to attend
and wager on horse racing, as well as utilise simulcast
facilities.
ADW operations - provision of online ADW services to enable
customers to wager into global racetrack betting pools.
The Group's Board of Directors review the internal management
reports of the operating segments on a monthly basis.
B. Information about reportable segments
Information relating to the reportable segments is set out
below. Segment revenue along with segment profit / (loss) before
tax are used to measure performance as management considers this
information to be a relevant indicator for evaluating the
performance of the segments.
Reportable segments
Corporate
operating
Racetrack ADW costs Total
Period to 30 November 2022 (unaudited) US$000 US$000 US$000 US$000
----------------------------------------- ----------- -------- ---------- -------
External revenues 5,101 1,125 - 6,226
Segment revenue 5,101 1,125 - 6,226
----------------------------------------- ----------- -------- ---------- -------
Segment profit / (loss) before
tax 75 (315) (85) (325)
Finance costs (30) (1) (50) (81)
Depreciation and amortisation (31) (21) (1) (53)
Period to 30 November 2022 (unaudited)
----------------------------------------- ----------- -------- ---------- -------
Segment assets 2,396 2,795 1,414 6,605
----------------------------------------- ----------- -------- ---------- -------
Segment liabilities 1,504 2,627 1,481 5,612
----------------------------------------- ----------- -------- ---------- -------
Reportable segments
Corporate
operating
Racetrack ADW costs Total
Period to 30 November 2021 (unaudited) US$000 US$000 US$000 US$000
--------------------------------------- ----------- -------- ---------- -------
External revenues 5,530 1,265 - 6,795
Segment revenue 5,530 1,265 - 6,795
--------------------------------------- ----------- -------- ---------- -------
Segment profit / (loss) before
tax 155 (155) (70) (70)
Finance costs (10) (3) (49) (62)
Depreciation and amortisation (29) (22) (2) (53)
--------------------------------------- ----------- -------- ---------- -------
Period to 31 May 2022 (audited)
--------------------------------------- ----------- -------- ---------- -------
Segment assets 2,324 3,387 1,336 7,047
--------------------------------------- ----------- -------- ---------- -------
Segment liabilities 1,522 2,779 1,428 5,729
--------------------------------------- ----------- -------- ---------- -------
C. Reconciliation of reportable segments profit or loss
Period to Period to
30 November 30 November
2022 2021
(unaudited) (unaudited)
US$000 US$000
---------------------------------------------- ------------- ------------
Loss before tax
Total loss before tax for reportable segments (240) -
Loss before tax for other segments (85) (70)
---------------------------------------------- ------------- ------------
Consolidated loss before tax (325) (70)
---------------------------------------------- ------------- ------------
3. Revenue
The Group's operations and main revenue streams are those
described in the last annual financial statements. The Group's
revenue is derived from contracts with customers.
Disaggregation of revenue
In the following tables, revenue is disaggregated by primary
geographical market, major services lines and timing of revenue
recognition. The tables also include a reconciliation of the
disaggregated revenue with the Group's reportable segments (see
Note 2).
Reportable segments
Racetrack ADW Total
Period to 30 November 2022 (unaudited) US$000 US$000 US$000
--------------------------------------- --------- ------- -------
Primary geographic markets
North America 5,101 881 5,982
British Isles - 243 243
Caribbean - 1 1
Segment revenue 5,101 1,125 6,226
--------------------------------------- --------- ------- -------
Major service lines
ADW wagering 3,708 1,125 4,833
Race hosting 1,393 - 1,393
5,101 1,125 6,226
--------------------------------------- --------- ------- -------
Timing of revenue recognition
Services transferred at a point
in time 5,101 1,125 6,226
--------------------------------------- --------- ------- -------
Revenue from contracts with customers 5,101 1,125 6,226
--------------------------------------- --------- ------- -------
External revenue as reported
in Note 2 5,101 1,125 6,226
--------------------------------------- --------- ------- -------
Reportable segments
Racetrack ADW Total
Period to 30 November 2021 (unaudited) US$000 US$000 US$000
--------------------------------------- --------- ------- -------
Primary geographic markets
North America 5,530 969 6,499
British Isles - 296 296
Segment revenue 5,530 1,265 6,795
--------------------------------------- --------- ------- -------
Major service lines
ADW wagering 4,116 1,265 5,381
Race hosting 1,414 - 1,414
5,530 1,265 6,795
--------------------------------------- --------- ------- -------
Timing of revenue recognition
Services transferred at a point
in time 5,530 1,265 6,795
--------------------------------------- --------- ------- -------
Revenue from contracts with customers 5,530 1,265 6,795
--------------------------------------- --------- ------- -------
External revenue as reported
in Note 2 5,530 1,265 6,795
--------------------------------------- --------- ------- -------
4 Finance costs
Period to Period to
30 November 30 November
2022 2021
(unaudited) (unaudited)
US$000 US$000
--------------------------------- ------------- ------------
Loan interest payable (51) (50)
Lease liability interest payable (30) (12)
--------------------------------- ------------- ------------
Finance costs (81) (62)
--------------------------------- ------------- ------------
5 Income tax expense
(a) Current and Deferred Tax Expenses
The current and deferred tax expenses for the period were US$
Nil (30 November 2021: US$ Nil). Despite having made losses in the
past, no deferred tax was recognised as there is no reasonable
expectation that the Group will recover the resultant deferred tax
assets.
(b) Tax Rate Reconciliation
Period to Period to
30 November 30 November
2022 2021
(unaudited) (unaudited)
US$000 US$000
-------------------------------------------- ------------- ------------
Loss before tax (325) (70)
Tax charge at IOM standard rate (0%) - -
Adjusted for:
Tax credit for US tax losses (at 21%) (70) (24)
Add back deferred tax losses not recognised 70 24
-------------------------------------------- ------------- ------------
Tax charge for the period - -
-------------------------------------------- ------------- ------------
The maximum deferred tax asset that could be recognised at
period end is approximately US$ 1,055,000 (30 November 2021: US$
918,000). The Group has not recognised any asset as it might not be
recoverable within the allowed period.
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 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 to Period to
30 November 30 November
2022 2021
(unaudited) (unaudited)
US$000 US$000
-------------------- ------------- --------------
Loss for the period (325) (70)
-------------------- ------------- ------------
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 (cents) (0.08) (0.02)
----------------------------------------------- ----------- -----------
Diluted earnings per share (cents) (0.08) (0.02)
----------------------------------------------- ----------- -----------
The earnings applied are the same for both basic and diluted
earnings calculations per share as there are no dilutive effects to
be applied.
7 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.
8 Cash, cash equivalents and restricted cash
Period to Year ended
30 November
2022 31 May 2022
(unaudited) (audited)
US$000 US$000
------------------------------------------------- -------------- ------------
Cash and cash equivalents - company and other
funds 2,800 3,062
Restricted cash - protected player funds 1,104 1,077
Total cash, cash equivalents and restricted cash 3,904 4,139
------------------------------------------------- -------------- ------------
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 and certain USA
state customers, shown as 'protected player funds'.
Protected player funds are held in fully protected client
accounts within an Isle of Man regulated bank and in segregated
accounts within a USA regulated bank.
9 Loans, borrowings and lease liabilities
Current liabilities
Period to Year ended
30 November 2022 31 May 2022
(unaudited) (audited)
US$000 US$000
------------------------------------ ------------------- ------------
Unsecured loan (current portion) 21 20
Lease liabilities (current portion) 78 89
99 109
--------------------------------------- ------------------- ------------
Non-current liabilities
Period to Year ended
30 November 2022 31 May 2022
(unaudited) (audited)
US$000 US$000
---------------------------------------- ------------------- ------------
Unsecured loan (non-current portion) 36 47
Lease liabilities (non-current portion) 601 583
Secured loans - Galloway Ltd 1,350 1,350
1,987 1,980
------------------------------------------- ------------------- ------------
Terms and repayment schedule
Period to Year ended
30 November 31 May
2022 2022
Nominal (unaudited) (audited)
interest Year of US$000
rate maturity US$000
--------------------------- --- --- --- ---------- ----------- --------------- -----------
Unsecured loans 1.00-8.90% 2025 57 67
Lease liabilities 6.00-9.50% 2023-30 679 672
Secured loan - Galloway
Ltd 7.75% 2027 500 500
Secured loan - Galloway
Ltd 7.00% 2024 350 350
Secured loan - Galloway
Ltd 7.00% 2025 500 500
------------------------------------------ ---------- ----------- --------------- -----------
Total loans and borrowings 2,086 2,089
------------------------------------------ ---------- ----------- --------------- -----------
The secured loans from Galloway Ltd are secured over the
unencumbered assets of the Group.
10 Related party transactions
Identity of related parties
The Group has a related party relationship with its
subsidiaries, and with its Directors and executive officers, and
with Burnbrae Ltd (significant shareholder).
Transactions with and between subsidiaries
Transactions with and between the subsidiaries in the Group
which have been eliminated on consolidation are considered to be
related party transactions.
Transactions with entities with significant influence over the
Group
Rental and service charges of US$ 16,883 (30 November 2021: US$
23,868) and Directors' fees of US$ 17,230 (30 November 2021: US$
13,834) were charged in the period by Burnbrae Ltd of which Denham
Eke is a common Director and Katie Errock is an employee. The Group
also had a loan of US$ 1,350,000 (31 May 2022: US$ 1,350,000) from
Galloway Ltd, a company related to Burnbrae Limited by common
ownership and Directors (see note 9).
Transactions with other related parties
There were no transactions with other related parties during the
period.
11 Subsequent events
There were no significant subsequent events identified after 30
November 2022.
12 Approval of interim statements
The interim statements were approved by the Board on 23 February
2023. The interim report is expected to be available for
shareholders on 24 February 2023 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, Building 3, Chiswick Park, 566 Chiswick High Road, London
W4 5YA.
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END
IR ZZGZZRFRGFZM
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February 24, 2023 02:00 ET (07:00 GMT)
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