TIDMWEB
RNS Number : 9177U
Webis Holdings PLC
28 November 2019
For immediate release 28 November 2019
Webis Holdings plc
("Webis" or "the Group")
Annual Report and Financial Statements for the year ended 31 May
2019
Notice of Annual General Meeting
Webis Holdings plc, the global gaming group, today announces its
audited results and the publication of its 2019 Report and Accounts
("Accounts") for the year ended 31 May 2019, extracts from which
are set out below.
The Accounts are being posted to shareholders today together
with the Notice of Annual General Meeting, and will be available on
the Group's website www.webisholdingsplc.com and at the Group's
Registered Office: Viking House, Nelson Street, Douglas, Isle of
Man IM1 2AH.
The AGM will be held at The Claremont Hotel, 18/19 Loch
Promenade, Douglas, Isle of Man, at 11.00 a.m. on 23 December
2019.
Chairman's Statement
Introduction
It has been a mixed year for our core USA based business,
WatchandWager.com LLC ("WatchandWager") over the financial year
reported, with a reduction in amounts wagered, and an overall loss
returned, but against that a significant strengthening of our
licensed USA position in the increasingly expanded world of USA
regulated gaming.
Despite the loss reported, the Board is overall satisfied with
the performance over the year reported for our three core business
units, namely "Business-to-Consumer", "Business-to-Business" and
our racetrack operation at "Cal Expo" in Sacramento, California,
and these three sectors are commented upon in more detail
below.
Equally importantly, and as shareholders are aware, the company,
as an Isle of Man owned operation, still occupies a unique
advantage in the USA, with our array of USA licenses, banking,
settlement and general business operational skills. We also
consider our license and lease at the Cal Expo racetrack in
Sacramento, California, to be a significant asset in regulated
gaming globally, but of course mainly in the USA and California.
The Company still stands well positioned in particular in
California, and also other States that it is licensed and operates
in.
Year End Results Review
The Group amounts wagered for the year ended 31 May 2019 was
US$136.4 million (2018: US$461.2 million) - a significant decline
due to the loss of a large wagering syndicate as previously
reported to shareholders on 19 October 2018 and commented on below.
Gross Profit reported was US$4.5 million (2018: US$5.6 million).
This led to an overall loss on the year.
Operating costs were US$5.3 million: down 5% on 2019 (2018:
US$5.6 million), as we continue to manage costs over the entire
operation. We expect these costs to reduce in the current financial
year. As a result, our loss from operations was US$930,000.
Shareholder equity stands at US$1.2 million (2018: US$2.0
million). Total cash stands at US$2.6 million (2018: US$13.4
million), which includes ring-fenced funds held as protection
against our player liability as required under USA and Isle of Man
gambling legislation. An amount of US$875,000 was held during the
year as bonds and deposits with regulatory authorities.
Approach to Risk and Corporate Governance
As part of the adoption of the Quoted Companies Alliance
Corporate Governance code, the Board completed an assessment of the
risks inherent in the business and defined and adopted a statement
of risk appetite, being the amount and type of risk, it is prepared
to seek, accept or tolerate in pursuit of value. This being: -
"The Group's general risk appetite is a moderate, balanced one
that allows it to maintain appropriate growth, profitability and
scalability, whilst ensuring full regulatory compliance."
The Group's primary risk drivers include: -
Strategic
Reputational
Credit
Operational
Market
Liquidity, Capital and Funding
Regulatory and Compliance
Conduct
Our risk appetite has been classified under an "impact" matrix
defined as Zero, Low, Medium and High. Appropriate steps are
underway to ensure the prudential control monitoring of risks to
the Group and the Audit, Risk and Compliance Committee will oversee
this essential requirement. Further details of the Corporate
Governance Statement will be found in the Annual Report.
The Board refined the Group's business plan which incorporated
the risk and compliance framework.
Performance by Sector
WatchandWager
Business-to-Consumer
www.watchandwager.com/mobile
During the year, we reviewed this sector and whilst our platform
is important to the operation, we have refined our marketing
investment to more accurately target our core audience, mainly
horse players and potential sports players. Whilst the website and
mobile product continue to perform well, quite simply the marketing
investment required to compete with the large brands in the USA is
not commercially feasible. As a result, we have adjusted our
strategy in this area, with a reduced marketing spend, and some
reductions in data feeds and other products, that after researching
our key clients do not rely upon. This streamlining of our costs
has actually worked well, and player numbers during the period were
up by 16%, whilst costs have reduced. This is commented upon more
in post year developments.
That said, we continue to provide the best possible service to
our clients in this area. We offer some unique opportunities for
clients to bet especially in the very large amount of international
content that we are licensed to provide, and also our competitive
rewards program that we offer. We also have an excellent array of
licenses in USA states we can take bets from, and we consider this
critical to our future. We are confident that this service will
continue to increase our client base and overall turnover, but
under a reduced operational cost. We also know that our database
has a value in the expanding world of USA regulated sports
betting.
Business-to-Business
This sector is the provision of pari-mutuel (pool) wagering to
high-roller clients, many of whom specialise in algorithmic or
computer assisted trading on a wide range of global racetracks.
The amounts wagered for the full year were significantly reduced
by the previously reported cessation of wagering from a large
syndicate group/agent for almost the entire year reported.
Subsequent to that all contractual relations with this group have
been terminated by WatchandWager. This impacted turnover into
primarily the Hong Kong Jockey Club and the French PMU. This had
the anticipated impact previously reported of around US$800,000 in
reduced gross margin during the period, which is the principal
reason for the losses reported.
However, this does mean that the risk factor of a reliance on
one particular group/agent is no longer. In addition, the reduction
in business has in no manner impacted our world-wide licenses and
content that we have worked hard upon and continue to be in good
standing with. In fact, the opposite is the case with many
regulators and content providers continuing to be in favour of us
possessing a broader range of clients.
Our network of other players continued to grow both in terms of
turnover and player sign-ups. By not paying third-party fees, we
benefit from a much better margin than those through agents, and we
are able to work proactively and directly with them.
That said and as previously notified, the entire sector remains
volatile, being subject to changes in player or aggregator
activities, as well as changes in the policies of key content
providers and regulators. To that end whilst we will continue to
service this sector, it is not our principal focus at this
time.
Cal Expo
Cal Expo had a good racing season during the period, running 47
race meets between November 2018 and May 2019. Most importantly,
our excellent health and safety record remains and, unlike other
Californian tracks, with no equine fatalities relating to racing
activities incurred during the meeting. Equine safety, and the
safety of all our participants and customers remains of the upmost
priority. These were tested during the severe wildfires experienced
in Northern California during the period, and as a result we
cancelled racing on two occasions to ensure the safety of all
participants.
Given these circumstances, it was very encouraging that both
horse numbers, and all sources handle, were up on the previous
2017/18 meeting, and this shows an encouraging trend for the new
season. We were also assisted by the new International Racing Bill
approved in California, which Management heavily lobbied for in
Sacramento, and commenced in January 2019. As predicted, this added
circa US$100,000 of extra revenue to our operations, and we expect
this to continue to improve.
The Board considers our licensed operations at Cal Expo to be
one of the key assets of the Group and central to our growth in the
USA.
Licenses
The management team have been busy during the period reported
and subsequently, renewing our key strategic licenses and we can
confirm the recent renewal of our core multi-jurisdictional license
for wagering with the North Dakota Racing Commission for 2020. In
addition, as previously announced, we have renewed our
strategically important license in California for a period of two
more years (to be reheard in 2021). At the same time, we have
renewed or are in the process of renewing other key licenses in New
York, Kentucky, Washington, Colorado and Minnesota. We are very
confident all of these licenses will be in place in advance of the
start of 2020, as we are in good status with the relevant State
regulators. The Board considers these licences and future
applications, alongside our physical presence at Cal Expo, to be
the principal assets of the Group, and this is commented more in
subsequent events below.
Subsequent Events (post period reported)
Trading
Trading has been much improved in the new financial year from
June 1(st) , 2019 to time of writing. We have seen growth in all
three divisions we operate, and our strategy of controlling costs,
particularly in the areas of data provision, marketing and some
staff costs has been and will continue to be effective. As a
result, we are much closer to a breakeven situation at EBITDA level
which is our initial task, with the ultimate need to return to
profitability. A further update will be delivered to shareholders
at our 2019/20 Interim announcement which will be delivered in
February 2020.
Cal Expo
As previously reported, the Board is currently working with the
Board of the state-run Cal Expo Exposition of Fairs on a license
renewal up to 2025, with the possibility of extending even further
beyond that. This is a very significant move forward as we believe
the racetrack can operate in an increasing profitable manner, but
even more importantly will continue to give the Group an important
licensed presence in what will become by far the largest State for
sports betting and other forms of gaming in the USA.
Welfare issues
On a less positive note, many shareholders will be aware of the
larger number of equine fatalities at a track in Santa Anita,
California. Whilst our operations are not impacted in any way, the
Board are very aware of the effect this has and can continue to
have on public opinion, particularly through organizations such as
PETA (Protection of Ethical Treatment for Animals). That said, we
are very pleased with the swift remedial action approved by the
California Horseracing Board in particular. As stated above Cal
Expo maintains an excellent welfare record, and the protection of
our horses and participants is our upmost priority.
USA regulated sports betting and other gaming
It is now only eighteen months since the Supreme Court's
positive judgement on USA Sports betting in May 2018, and the Board
is very encouraged by the significant progress that has been made
in many first starter States, especially New Jersey, which is now
creating significant revenues, and most importantly meaningful
duties and tax back to the State. Also, encouragingly, the two best
performing properties in New Jersey are both racetracks - namely
Meadowlands and Monmouth Park, confirming our opinion that
horseracing players will also bet on sports at far higher levels
than casino or slot machine players. When sports betting is
legalised in California, we plan to adopt a very similar model to
that enjoyed at Meadowlands.
Developments by State
Clearly progress has been fastest on the East Coast, although we
do feel we were best to stay out of these markets, where we have
few licenses and less traction. That said it has been interesting
to note the progress in the currently legalised states, and also
the huge interest from the large USA gaming and media companies in
the sector, not to mention the European operators, and software
companies. This is further commented upon under strategic
opportunities.
California
Our physical presence in California and accompanying licenses
remains our biggest asset and opportunity, but the situation is
complicated given the diverse interests in the State. We are very
encouraged by progress in the State Capitol in Sacramento, located
less than five miles from Cal Expo racetrack, and where the
ultimate decisions will be made. We welcome the draft Dodd/Gray
AB10 Bill and are actively participating in efforts to move this
forward in the Capitol. Most significant is the current language
that will only allow active land-based participants in California
to apply for licences, namely Racetracks, Native American Casinos,
and possibly Card Clubs. This effectively means the large USA and
international gaming operations and software suppliers outside
California will literally need to buy themselves into the State at
large premiums. Whilst almost impossible to predict the progress of
State legislature particularly in California, at present, we
reasonably expect Sports betting to be legalized for those with a
physical presence in the State by 2021, with a possible go-live
date in 2022. We will update shareholders as and when more progress
is made.
Other State opportunities
With California being a long-term goal, we are also focusing on
other States, and additional opportunities to operate other forms
of gaming, both land-based and on-line, with a view to generate
short term profitability. At present, opportunities exist in North
Dakota, Arizona and a few other key States, plus some international
opportunities. We will update shareholders in due course.
Corporate Governance
One of the Group Board's primary responsibilities is to ensure
the provision of effective corporate governance. To this end, the
Board undertook a full review of every aspect of governance in
light of the Quoted Companies Alliance Corporate Governance Code
for Small and Mid-Size Quoted Companies (2018) and I am pleased to
report that the Group is fully compliant in all aspects.
Strategic opportunities and Outlook
USA regulated gaming is seen as the hottest subject at present
in global gaming, and something of a gold rush both in the USA and,
indeed, internationally. Non-USA and certain European companies are
experiencing severe regulatory issues, as well as margin problems,
and appear almost desperate to be a part of the developments in the
USA. As a result, it should come as no surprise that WatchandWager
continues to be courted by large corporations, and indeed smaller
operations with a view to software deals, strategic alliances,
mergers or even outright acquisition opportunities. Principally led
by our Managing Director, the Board assesses each opportunity on a
case-by-case basis. It should be noted in the majority of
instances, the Board takes the view that "they need us more than we
need them" and we continue to protect our USA licensed presence as
a core asset.
We are very aware of the increased consolidation in the industry
and the economies of scale of strategic partnerships and will keep
shareholders aware of any meaningful strategic developments with
the Group, most likely in the USA, but possibly with international
partnerships.
I also believe it is important to re-confirm the support of our
principal shareholder for our USA operations, strategy and
expansion plans. As a Board, we also believe we have the ability to
raise further capital to support our operations both short term and
indeed for future funding of our USA strategy.
Finally, I would like to thank all our shareholders, customers
for their continued loyally, and our staff for their continued hard
work.
Denham Eke
Non-executive Chairman
For further information:
Webis Holdings plc Tel: 01624 639396
Denham Eke
Beaumont Cornish Limited Tel: 020 7628 3396
Roland Cornish/James Biddle
Consolidated Statement of Comprehensive Income
For the year ended 31 May 2019
2019 2018
Note US$000 US$000
---------------------------------------------------------- ----- --------- ---------
Amounts wagered 136,353 461,154
---------------------------------------------------------- ----- --------- ---------
Turnover 2 47,259 54,466
Cost of sales (42,625) (48,027)
Betting duty paid (146) (884)
---------------------------------------------------------- ----- --------- ---------
Gross profit 4,488 5,555
---------------------------------------------------------- ----- --------- ---------
Operating costs (5,277) (5,562)
Impairment loss on trade receivables 20 (67) -
Re-organisational and other costs (54) (86)
Other (losses)/gains (166) 132
Other income 187 104
Operating (loss)/ profits (889) 143
---------------------------------------------------------- ----- --------- ---------
Finance costs 4 (41) (40)
---------------------------------------------------------- ----- --------- ---------
(Loss)/ profit before income tax (930) 103
---------------------------------------------------------- ----- --------- ---------
Income tax expense 6 - -
---------------------------------------------------------- ----- --------- ---------
(Loss)/ profit for the year (930) 103
Other comprehensive income:
Items that may be subsequently reclassified to profit
or loss:
Currency translation differences on disposal of
foreign subsidiaries - -
---------------------------------------------------------- ----- --------- ---------
Other comprehensive income for the year - -
---------------------------------------------------------- ----- --------- ---------
Total comprehensive income for the year (930) 103
---------------------------------------------------------- ----- --------- ---------
Basic earnings per share for (loss)/profit attributable
to the equity holders of the Company during the
year (cents) 7 (0.24) 0.03
---------------------------------------------------------- ----- --------- ---------
Diluted earnings per share for (loss)/profit attributable
to the equity holders of the Company during the
year (cents) 7 (0.23) 0.03
---------------------------------------------------------- ----- --------- ---------
Statements of Financial Position
As at 31 May 2019
31.05.19 31.05.19 31.05.18 31.05.18
Group Company Group Company
Note US$000 US$000 US$000 US$000
------------------------------ ----- --------- --------- ----------- ---------
Non-current assets
Intangible assets 8 104 7 166 13
Property, equipment and motor
vehicles 9 26 10 60 19
Investments 10 - 3 - 8
Bonds and deposits 11 101 - 101 -
------------------------------ ----- --------- --------- ----------- ---------
Total non-current assets 231 20 327 40
------------------------------ ----- --------- --------- ----------- ---------
Current assets
Bonds and deposits 11 882 - 2,846 -
Trade and other receivables 13 1,191 427 2,300 57
Cash and cash equivalents 12 2,594 1,416 13,392 2,961
------------------------------ ----- --------- --------- ----------- ---------
Total current assets 4,667 1,843 18,538 3,018
------------------------------ ----- --------- --------- ----------- ---------
Total assets 4,898 1,863 18,865 3,058
------------------------------ ----- --------- --------- ----------- ---------
Equity
Called up share capital 16 6,334 6,334 6,334 6,334
Share option reserve 16 42 42 4 4
Retained losses (5,224) (5,412) (4,294) (5,282)
------------------------------ ----- --------- --------- ----------- ---------
Total equity 1,152 964 2,044 1,056
------------------------------ ----- --------- --------- ----------- ---------
Current liabilities
Trade and other payables 14 2,896 49 16,321 1,502
------------------------------ ----- --------- --------- ----------- ---------
Total current liabilities 2,896 49 16,321 1,502
------------------------------ ----- --------- --------- ----------- ---------
Non-current liabilities
Loans 15 850 850 500 500
------------------------------ ----- --------- --------- ----------- ---------
Total non-current liabilities 850 850 500 500
------------------------------ ----- --------- --------- ----------- ---------
Total liabilities 3,746 899 16,821 2,002
------------------------------ ----- --------- --------- ----------- ---------
Total equity and liabilities 4,898 1,863 18,865 3,058
------------------------------ ----- --------- --------- ----------- ---------
Statements of Changes in Equity
For the year ended 31 May 2019
Called up Share option Retained Total
share capital reserve earnings equity
Group US$000 US$000 US$000 US$000
---------------------------- --------------- ------------- ---------- --------
Balance as at 31 May 2017 6,334 2 (4,397) 1,939
Total comprehensive income
for the year:
Profit for the year - - 103 103
Transactions with owners:
Share-based payment expense - 2 - 2
Balance as at 31 May 2018 6,334 4 (4,294) 2,044
Total comprehensive income
for the year:
Loss for the year - - (930) (930)
Transactions with owners:
Share-based payment expense
(note 16) - 38 - 38
---------------------------- --------------- ------------- ---------- --------
Balance as at 31 May 2019 6,334 42 (5,224) 1,152
---------------------------- --------------- ------------- ---------- --------
Called up Share option Retained Total
share capital reserve earnings equity
Company US$000 US$000 US$000 US$000
---------------------------- --------------- ------------- ---------- --------
Balance as at 31 May 2017 6,334 2 (5,374) 962
Total comprehensive income
for the year:
Profit for the year - - 92 92
Transactions with owners:
Share-based payment expense - 2 - 2
Balance as at 31 May 2018 6,334 4 (5,282) 1,056
Total comprehensive income
for the year:
Loss for the year - - (130) (130)
Transactions with owners:
Share-based payment expense
(note 16) - 38 - 38
---------------------------- --------------- ------------- ---------- --------
Balance as at 31 May 2019 6,334 42 (5,412) 964
---------------------------- --------------- ------------- ---------- --------
Consolidated Statement of Cash Flows
For the year ended 31 May 2019
Note 2019 2018
US$000 US$000
--------------------------------------------------------- ------- --------- ----------
Cash flows from operating activities
(Loss) / profit before income tax (930) 103
Adjustments for:
* Depreciation of property, equipment and motor
vehicles 9 34 74
* Amortisation of intangible assets 8 80 70
* Finance costs 4 41 40
* Share based payment expense 16 38 2
* Other foreign exchange movements 363 (691)
Changes in working capital:
* Decrease in receivables 1,109 771
* Decrease in payables (13,425) (2,563)
--------------------------------------------------------- ------- --------- --------
Cash flows from operations (12,690) (2,194)
Bonds and deposits placed in the course of operations 11 1,964 19
Net cash used in operating activities (10,726) (2,175)
--------------------------------------------------------- ------- --------- --------
Cash flows from investing activities
Purchase of intangible assets 8 (18) (130)
Purchase of property, equipment and motor vehicles 9 - (24)
Net cash used in investing activities (18) (154)
--------------------------------------------------------- ------- --------- ----------
Cash flows from financing activities
Interest paid 4 (41) (40)
Loans received 15 350 -
Net cash generated from / (used in) financing activities 309 (40)
--------------------------------------------------------- ------- --------- --------
Net decrease in cash and cash equivalents (10,435) (2,369)
Cash and cash equivalents at beginning of year 13,392 15,072
Exchange (losses) / gains on cash and cash equivalents (363) 689
--------------------------------------------------------- ------- --------- --------
Cash and cash equivalents at end of year 2,594 13,392
--------------------------------------------------------- ------- --------- --------
Notes to the Financial Statements
For the year ended 31 May 2019
1 Reporting entity (the "Company")
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 Webis Holdings
plc consolidated financial statements as at and for the year ended
31 May 2019 consolidate those of the Company and its subsidiaries
(together referred to as the "Group").
1.1 Basis of preparation
(a) Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
("IFRS") and its interpretations as adopted by the European
Union.
There has been no material impact on the Group financial
statements of new standards/interpretations that have come into
effect during the current reporting period.
Functional and presentational currency
These financial statements are presented in US Dollars which is
the Group's primary functional currency and its presentational
currency. Financial information presented in US Dollars has been
rounded to the nearest thousand. All continued operations of the
Group have US Dollars as their functional currency.
(b) Basis of measurement
The Group consolidated financial statements are prepared under
the historical cost convention except where assets and liabilities
are required to be stated at their fair value.
(c) Use of estimates and judgement
The preparation of the Group financial statements in conformity
with IFRS as adopted by the EU requires management to make
judgements, estimates and assumptions that affect the application
of policies and reported amounts of assets and liabilities, income
and expenses. Although these estimates are based on management's
best knowledge and experience of current events and expected
economic conditions, actual results may differ from these
estimates.
The Directors consider the only critical judgement area to be
the valuation of share options. The Directors believe the models
and assumptions used to calculate the fair value of the share-based
payments, outlined in note 16, are the most appropriate for the
Group.
The accounting policies set out below have been applied
consistently to all periods presented in these consolidated
financial statements.
Going concern
The Group and Parent Company financial statements have been
prepared on a going concern basis.
The Group incurred a net loss of US$930,000 for the year (2018:
profit of US$103,000) and as at 31 May 2019. Based on forecasts
prepared by the Directors, the Group will sustain losses to
November 2020 and is dependent on continued financial support from
Galloway Limited in order to continue its operations and implement
the strategies outlined below. The reported turnover declined by
US$7,207,000 during the year following a decrease in wagering
activities and the cessation of wagering services to a large
syndicate, with an anticipated annual impact of approximately
US$800,000 in reduced gross margin. The Directors recognise that
there is a risk involved in the sustainability of the business
operations and have identified that these circumstances in
combination represent a material uncertainty that casts significant
doubt upon the Group's ability to continue as a going concern,
without shareholder support.
The Directors are pursuing strategies that include:
-- broadening the Group's client base and expanding its business to customer base
-- continuing to renew and acquire further US state regulated
gaming licenses and continuing to develop and expand the Cal Expo
racetrack operation including the extension of the lease to a
longer lease term
-- taking advantage of the anticipated regulatory change in the
State of California's adoption of sports betting legislation which
will further open up opportunities for the Group
-- reducing operational costs as a key priority 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 as they require additional cash, including
bonds to be placed with the relevant authorities. The Directors
have prepared cash flow forecasts for a period of 12 months from
the date of approval of these financial statements which indicate
that, taking account of reasonably possible downsides, the Group is
projected to have sufficient funds through funding from its related
entity, to meet its liabilities as they fall due for that
period.
Those forecasts are also dependent on Galloway Limited not
seeking repayment of the amounts currently due by the Group, which
at 31 May 2019 amounted to US$850,000, and providing additional
financial support if required in order to ensure the continuation
of the Group's existing operations. Galloway Limited has indicated
its intention to continue to make available such funds as are
needed by the company, and that it does not intend to seek
repayment of the amounts due at the balance sheet date, for the
period covered by the forecasts. As with any company placing
reliance on other parties for financial support, the Directors
acknowledge that there can be no certainty that this support will
continue although, at the date of approval of these financial
statements, they have no reason to believe that it will not do
so.
The willingness of Galloway Limited to continue to provide this
support is reliant on the strategies highlighted above which are
subject to uncertainty.
Based on these indications, the Directors believe that it
remains appropriate to prepare the financial statements on a going
concern basis. However, these circumstances represent a material
uncertainty that may cast significant doubt on the Company's
ability to continue as a going concern and, therefore, to continue
realising its assets and discharging its liabilities in the normal
course of business. The financial statements do not include any
adjustments that would result from the basis of preparation being
inappropriate.
1.2 Changes in significant accounting policies
During the current year the Group adopted all the new and
revised IFRSs that are relevant to its operation and are effective
for accounting periods beginning on 1 June 2019. This adoption did
not have a material effect on the accounting policies of the Group.
The changes to the significant accounting policies are described
below:
IFRS 9 Transition
Classification and measurement on adoption
The Group adopted IFRS 9 Financial Instruments for the first
time on 1 June 2018. For the Group, there is no financial impact on
adopting IFRS 9 for changes in the measurement basis for financial
assets and liabilities and consequently no adjustment to opening
retained earnings at 1 June 2018. There has however been a change
to classification terminology, outlined below for the company's
main financial instruments:
Financial instrument New Classification Original Classification Measurement model
under IFRS 9 under IAS 39
Cash and cash equivalents Amortised cost Loans and receivables Amortised cost
---------------------- --------------------------- ---------------------
Trade receivables Amortised cost Loans and receivables Amortised cost
---------------------- --------------------------- ---------------------
Loans and advances Amortised cost Loans and receivables Amortised cost
---------------------- --------------------------- ---------------------
Bonds and Deposits Amortised cost Loans and receivables/ Amortised cost
Loans and receivables
---------------------- --------------------------- ---------------------
Equity instruments FV on day 1, FV on day 1, no FVTPL
no remeasurements remeasurements
---------------------- --------------------------- ---------------------
Impairment on adoption
The Group has determined that the impact of adopting IFRS 9's
ECL model is an immaterial transitional impact on the Group's
opening retained earnings at 1 June 2018. The accounting policies
set out above have been applied consistently to all periods
presented in these financial statements in accordance with
IFRS.
Impairment of financial assets
IFRS 9 introduces an expected loss accounting model for credit
losses that differs significantly from the incurred loss model
under IAS 39 and results in earlier recognition of credit losses.
The new impairment model applies to financial assets measured at
amortised cost and contract assets. Financial assets at amortised
cost include trade receivables, cash and cash equivalents, bonds
and deposits.
Performing financial assets
Stage 1
From initial recognition of a financial asset to the date on
which an asset has experienced a significant increase in credit
risk relative to its initial recognition, a stage 1 loss allowance
is recognised equal to the credit losses expected to result from
its default occurring over the earlier of the next 12 months or its
maturity date ('12-month ECL').
Stage 2
Following a significant increase in credit risk relative to the
initial recognition of the financial asset, a stage 2 loss
allowance is recognised equal to the credit losses expected from
all possible default events over the remaining lifetime of the
asset ('Lifetime ECL'). The assessment of whether there has been a
significant increase in credit risk requires considerable judgment,
based on the lifetime probability of default ('PD'). Stage 1 and 2
allowances are held against performing loans; the main difference
between stage 1 and stage 2 allowances is the time horizon. Stage 1
allowances are estimated using the PD with a maximum period of 12
months, while stage 2 allowances are estimated using the PD over
the remaining lifetime of the asset.
Impaired financial assets
Stage 3
When a financial asset is considered to be credit-impaired, the
allowance for credit losses ('ACL') continues to represent lifetime
expected credit losses, however, interest income is calculated
based on the amortised cost of the asset, net of the loss
allowance, rather than its gross carrying amount.
Application of the new impairment model
The Group applies IFRS 9's new ECL model to two main types of
financial assets that are measured at amortised cost:
Trade receivables, to which the simplified approach (provision
matrix) prescribed by IFRS 9 is applied. This approach requires the
recognition of a Lifetime ECL allowance on day one.
Other financial assets at amortised cost, to which the general
three stage model (described above) is applied, whereby a 12-month
ECL is recognised initially and the balance is monitored for
significant increases in credit risk which triggers the recognition
of a Lifetime ECL allowance.
CLs are a probability-weighted estimate of credit losses. ECLs
for financial assets that are not credit-impaired at the reporting
date are measured as the present value of all cash shortfalls (i.e.
the difference between the cash flows due in accordance with the
contract and the cash flows that the company expects to receive).
ECLs for financial assets that are credit-impaired at the reporting
date are measured as the difference between the gross carrying
amount and the present value of estimated future cash flows. ECLs
are discounted at the effective interest rate of the financial
asset which is 0% for all financial assets at amortised cost. The
maximum period considered when estimating ECLs is the maximum
contractual period over which the Group is exposed to credit risk.
The measurement of ECLs considers information about past events and
current conditions, as well as supportable information about future
events and economic conditions. The Group has revised its
impairment methodology for estimating the ECLs, taking into account
forward-looking information in determining the appropriate level of
allowance. In addition, it has identified indicators and set up
procedures for monitoring for significant increases in credit
risk.
As a result of the adoption of IFRS 9, the Group has adopted the
consequential amendments to IAS 1 Presentation of Financial
Statements, which requires impairment of financial assets to be
presented in a separate line item in the Statement of Comprehensive
Income. Previously, the Group's approach was to include impairment
of trade receivables in operating costs. There were no impairment
losses recorded that required reclassification in the Statement of
Comprehensive Income for the year ended 31 May 2018.
IFRS 15 Transition - Revenue from contracts with customers
The Group generates revenue primarily from the provision of
wagering services and the hosting of races on which guests are
entitled to participate in the related wagering services. Revenue
is measured based on the consideration specified in a contract with
a customer. The Group recognises revenue when it discharges
services to a customer. Revenue has been disaggregated by
geographical locations which are consistent with the operating
segments (note 2).
Hosting fees are recognised when the customers participate in
the Group's pari-mutuel pools and the race audio visual signals are
transmitted.
Wagering revenue from the Group's activities as the race host is
recognised when a race on which wagers are placed is completed. The
wagering commission from the Group's commingling of its wagering
pools with a host's pool is recognised when the race on which those
wagers are placed is completed. The Group acts as a principal when
it allows customers to place wagers in the races it hosts and as an
agent when it allows customers to place wagers in other entities'
races.
Transactions fees are recognised when the Group facilitates
customers' deposit transactions into their betting accounts.
There were no restatements in the retained earnings on adoption
of IFRS 15 as the resultant amounts, timing and pattern of
recognition of revenue did not change.
1.3 Summary of significant accounting policies
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all the years presented
unless otherwise stated.
Basis of consolidation
The consolidated financial statements incorporate the results of
the Group. 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. Control exists
when the Group has the power, directly or indirectly, to govern the
financial and operating policies of an entity so as to obtain
benefits from its activities.
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair values of the assets transferred, the
liabilities incurred to the former owners of the acquiree and the
equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. Acquisition-related costs are expensed as
incurred.
Inter-company transactions, balances and unrealised gains on
transactions between the Group companies are eliminated. Unrealised
losses are also eliminated. When necessary amounts reported by
subsidiaries have been adjusted to conform with the Group's
accounting policies.
Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates ('the functional
currency'). The consolidated financial statements are presented in
US Dollars, which is also the Group's functional currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are remeasured. Foreign
exchange gains and losses resulting from the settlement of
such transactions and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement, except when
deferred in other comprehensive income as qualifying cash
flow hedges and qualifying net investment hedges. Foreign
exchange gains and losses that relate to borrowings are presented
in the income statement within 'Finance income' or 'Finance costs'.
All other foreign exchange gains and losses are presented in the
income statement within 'Other (losses)/gains'.
(c) Group companies
The results and financial position of all the Group entities
(none of which has the currency of a hyper-inflationary economy)
that have a functional currency different from the presentation
currency are translated into the presentation currency as
follows:
(i) assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance
sheet;
(ii) income and expenses for each income statement are
translated at average exchange rates (unless this average is not a
reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and
expenses are translated at the rate on the dates of the
transactions); and
(iii) all resulting exchange differences are recognised in other
comprehensive income.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate. Exchange
differences arising are recognised in other comprehensive
income.
Segmental reporting
Segmental reporting is based on the business areas in accordance
with the Group's internal reporting structure, which allows the
individual operating segments to be identified by the disparate
nature of the principal activity they undertake. The Group
determines and presents segments based on the information that
internally is provided to the Board and Managing Director, the
Group's chief operating decision maker.
An operating segment is a component of the Group and engages in
business activities from which it may earn revenues and incur
expenses. An operating segment's operating results are reviewed
regularly by the Board and Managing Director to make decisions
about resources to be allocated to the segment and assess its
performance, and for which discrete financial information is
available.
Current and deferred income tax
The tax expense for the period comprises current and deferred
tax. Tax is recognised in the income statement, except to the
extent that it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly in equity,
respectively.
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the reporting date in
the countries where the Group operates and generates taxable
income. Management periodically evaluates positions taken in tax
returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to
the tax authorities.
Deferred income tax is recognised on temporary differences
arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. However,
deferred tax liabilities are not recognised if they arise from
the initial recognition of goodwill; deferred tax is not
accounted for if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred tax is determined using tax rates
(and laws) that have been enacted or substantively enacted by the
reporting date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability
is settled.
Deferred income tax assets are recognised only to the extent
that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred income tax liabilities are provided on taxable
temporary differences arising from investments in subsidiaries
except for deferred income tax liability, where the timing of the
reversal of the temporary difference is controlled by the Group and
it is probable that the temporary difference will not reverse in
the foreseeable future. Only where there is an agreement in place
that gives the Group the ability to control the reversal of the
temporary difference is the liability not recognised.
Deferred income tax assets are recognised on deductible
temporary differences arising from investments in subsidiaries only
to the extent that it is probable the temporary difference will
reverse in the future and there is sufficient taxable profit
available against which the temporary difference can be
utilised.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes, assets
and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
Intangible assets - goodwill
Goodwill arises on the acquisition of subsidiaries and
represents the excess of the consideration transferred over the
Group's interest in net fair value of the net identifiable assets,
liabilities and contingent liabilities of the acquiree and the fair
value of the non-controlling interest in the acquiree.
For the purpose of impairment testing, goodwill acquired in a
business combination is allocated to each of the cash-generating
units ("CGUs"), or groups of CGUs, that is expected to benefit from
the synergies of the combination. Each unit or group of units to
which the goodwill is allocated represents the lowest level within
the entity at which the goodwill is monitored for internal
management purposes. Goodwill is monitored at the operating segment
level.
Goodwill impairment reviews are undertaken annually or more
frequently if events or changes in circumstances indicate a
potential impairment. The carrying value of goodwill is compared to
the recoverable amount, which is the higher of value in use and the
fair value less costs of disposal. Any impairment is recognised
immediately as an expense and is not subsequently reversed.
Intangible assets - other
(a) Trademarks and licences
Separately acquired trademarks and licences are shown at
historical cost. Trademarks and licences acquired in a business
combination are recognised at fair value at the acquisition date.
Trademarks and licences have a finite useful life and are carried
at cost less accumulated amortisation. Amortisation is calculated
using the straight-line method to allocate the cost of trademarks
and licences over their estimated useful lives of three years.
Acquired computer software licences are capitalised on the basis
of the costs incurred to acquire and bring to use the specific
software. These costs are amortised over their estimated useful
lives of three years.
(b) Website design and development costs
Costs associated with maintaining websites are recognised as an
expense as incurred. Development costs that are directly
attributable to the design and testing of identifiable and unique
websites controlled by the Group are recognised as intangible
assets when the following criteria are met:
-- it is technically feasible to complete the website so that it
will be available for use;
-- management intends to complete the website and use it;
-- there is an ability to use the website;
-- it can be demonstrated how the website will generate probable
future economic benefits;
-- adequate technical, financial and other resources to complete
the development and to use the website are available; and
-- the expenditure attributable to the website during its
development can be reliably measured.
Directly attributable costs that are capitalised as part of the
website include the website employee costs and an appropriate
portion of relevant overheads.
Other development expenditures that do not meet these criteria
are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset
in a subsequent period.
Website development costs recognised as assets are amortised
over their estimated useful lives, which do not exceed three
years.
Property, equipment and motor vehicles
Items of property, equipment and motor vehicles 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.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised.
All other repairs and maintenance are charged to the income
statement during the financial period in which they are
incurred.
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at the financial position 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. Depreciation is calculated using the
straight-line method to allocate the cost of property, equipment
and motor vehicles over their estimated useful lives of three
years.
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised within 'Other
gains/(losses) - net' in the income statement.
Share-based payment expense
The Group operates an equity-settled, share-based compensation
plan, under which the entity receives services from employees as
consideration for equity instruments (options) of the Group. The
fair value of the employee services received in exchange for the
grant of the options is recognised as an expense. The total amount
to be expensed is determined by reference to the fair value of the
options granted:
-- including any market performance conditions (for example, an
entity's share price); and
-- excluding the impact of any service and non-market
performance vesting conditions (for example, profitability, sales
growth targets and remaining an employee of the entity over a
specified time-period).
Non-market performance and service conditions are included in
assumptions about the number of options that are expected to vest.
The total expense is recognised over the vesting period, which is
the period over which all of the specified vesting conditions are
to be satisfied.
At the end of each reporting period, the Group revises its
estimates of the number of options that are expected to vest based
on the non-market vesting conditions. It recognises the impact of
the revision to original estimates, if any, in the income
statement, with a corresponding adjustment to equity.
When the options are exercised, the Company issues new shares.
The proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium.
Leases
Leases in which a significant portion of the risks and rewards
of ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases (net of any incentives
received from the lessor) are charged to the income statement on a
straight-line basis over the period of the lease. The Group is not
party to any leases that are classified as finance leases.
Equity
Share capital is determined using the nominal value of shares
that have been issued.
Equity settled share-based employee remuneration is credited to
the share option reserve until related stock options are exercised.
On exercise or lapse, amounts recognised in the share option
reserve are taken to retained earnings.
Retained earnings include all current and prior period results
as determined in the income statement and any other gains or losses
recognised in the Statement of Changes in Equity.
Financial instruments
Non-derivative financial instruments include trade and other
receivables, cash and cash equivalents, bonds and deposits,
borrowings and trade and other payables. Ante-post sports bets are
recognised when the Company becomes party to the contractual
agreements of the instrument.
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. Transaction costs are included
in the initial measurement of financial instruments, except
financial instruments classified as at fair value through profit
and loss. The subsequent measurement of financial instruments is
dealt with below.
Trade and other receivables
Trade and other receivables are recognised initially at fair
value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment.
Cash and cash equivalents
Cash and cash equivalents are defined as cash in bank and in
hand as well as bank deposits, money held for processors and cash
balances held on behalf of players. Cash equivalents are held for
the purpose of meeting short-term cash commitments rather than for
investment or other purposes.
Bonds and deposits
Bonds and deposits are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
Borrowings
Interest-bearing 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 recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method.
Employee benefits
(a) Pension obligations
The Group does not operate any post-employment schemes,
including both defined benefit and defined contribution pension
plans.
(b) Short-term employee benefits
Short-term employee benefits, such as salaries, paid absences,
and other benefits, are accounted for on an accrual's basis over
the period in which employees have provided services in the year.
All expenses related to employee benefits are recognised in the
Statement of Comprehensive Income in operating costs.
(c) Profit sharing and bonus plans
The Group recognises a liability and an expense for bonuses and
profit sharing, based on a formula that takes into consideration
the profit attributable to the Company's shareholders after certain
adjustments. The Group recognises a provision where contractually
obliged or where there is a past practice that has created a
constructive obligation.
Standards and interpretations in issue not yet adopted
A number of new standards, amendments to standards and
interpretations are not yet effective for the year, and have not
been applied in preparing these consolidated financial
statements:
New/revised International Accounting Standards / International Effective date
Financial Reporting Standards ("IAS/IFRS") (accounting periods
commencing on
or after)
--------------------------------------------------------------- ---------------------
IFRS 16 Leases 1 January 2019
Amendments
Amendments to reference to Conceptual Framework in 1 January 2020
IFRS Standards
Annual improvements to IFRS Standards 2015-2017 Cycle Not yet endorsed
(issued on 12 December 2017)
Amendments to IFRS 9 Financial Instruments: Prepayment Not yet endorsed
Features with Negative Compensation (issued on 12 October
2017)
--------------------------------------------------------------- ---------------------
IFRS 16 provides a single lessee accounting model, requiring
lessees to recognise assets and liabilities for all leases unless
the lease term is less than 12 months, or the underlying asset is
of an immaterial value.
The Group's assessment of the potential impact resulting from
the implementation of IFRS 16 is currently in progress. The actual
impact of adopting the standard on 1 June 2019 will be known when
the Group presents its first financial statements after the date of
initial application.
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 segment 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
All other
Racetrack ADW segments Total
2019 2019 2019 2019
US$000 US$000 US$000 US$000
---------------------------------------------- ----------- -------- --------- -------
External revenues 44,753 2,506 - 47,259
Segment revenue 44,753 2,506 - 47,259
---------------------------------------------- ----------- -------- --------- -------
Segment loss before tax (97) (708) (125) (930)
Interest expense - - (41) (41)
Depreciation and amortisation (8) (106) - (114)
Other material non-cash items:
* Impairment losses on trade receivables - (67) - (67)
---------------------------------------------- ----------- -------- --------- -------
Segment assets 423 2,612 1,863 4,898
---------------------------------------------- ----------- -------- --------- -------
Segment liabilities 181 2,666 899 3,746
---------------------------------------------- ----------- -------- --------- -------
Reportable segments
All other
Racetrack ADW segments Total
2018 2018 2018 2018
US$000 US$000 US$000 US$000
--------------------------------- ----------- -------- --------- -------
External revenues 50,173 4,293 - 54,466
Segment revenue 50,173 4,293 - 54,466
--------------------------------- ----------- -------- --------- -------
Segment (loss)/profit before tax (359) 477 (15) 103
Interest expense - - (40) (40)
Depreciation and amortisation (41) (103) - (144)
--------------------------------- ----------- -------- --------- -------
Segment assets 327 15,480 3,058 18,865
--------------------------------- ----------- -------- --------- -------
Segment liabilities 191 14,628 2,002 16,821
--------------------------------- ----------- -------- --------- -------
C. Reconciliations of information on reportable segments to the
amounts reported in the financial statements
2019 2018
US$000 US$000
--------------------------------------------------------- ------- -------
i. Revenues
Total revenue for reportable segments 47,259 54,466
--------------------------------------------------------- ------- -------
Consolidated revenue 47,259 54,466
--------------------------------------------------------- ------- -------
ii. (Loss) / profit before tax
Total (loss) / profit before tax for reportable segments (805) 118
Loss before tax for other segments (125) (15)
--------------------------------------------------------- ------- -------
Consolidated (loss) / profit before tax (930) 103
--------------------------------------------------------- ------- -------
iii. Assets
Total assets for reportable segments 3,035 15,807
Assets for other segments 1,863 3,058
--------------------------------------------------------- ------- -------
Consolidated total assets 4,898 18,865
--------------------------------------------------------- ------- -------
iv. Liabilities
Total liabilities for reportable segments 2,847 14,819
Liabilities for other segments 899 2,002
--------------------------------------------------------- ------- -------
Consolidated total liabilities 3,746 16,821
--------------------------------------------------------- ------- -------
v. Other material items
Interest expense (41) (40)
Depreciation and amortisation (114) (144)
Impairment losses on trade receivables (67) -
--------------------------------------------------------- ------- -------
D. Geographic information
The below table analyses the geographic location of the customer
base of the operating segments.
2019 2018
US$000 US$000
--------------------- -------------- ------- -------
Turnover
Racetrack operations North America 44,753 50,173
ADW operations North America 1,541 1,323
British
Isles 692 23
Asia Pacific 273 2,947
47,259 54,466
------------------------------------ ------- -------
3 Operating (loss)/profit
2019 2018
Operating (loss)/profit is stated after charging: US$000 US$000
------------------------------------------------------- ------- -------
Auditors' remuneration - audit 81 64
Depreciation of property, equipment and motor vehicles 34 74
Amortisation of intangible assets 80 70
Exchange losses / (gains) 166 (132)
Operating lease rentals - other than plant, equipment
and Harness Racetrack 30 29
Operating lease rentals - Harness Racetrack 74 89
Directors' fees 67 69
------------------------------------------------------- ------- -------
4 Finance costs
2019 2018
US$000 US$000
---------------------- ------- -------
Loan interest payable (41) (40)
---------------------- ------- -------
Finance costs (41) (40)
---------------------- ------- -------
5 Staff numbers and cost
2019 2018
-------------------------------------------------------- ---- ------
Average number of employees - Pari-mutuel and Racetrack
Operations 55 59
-------------------------------------------------------- ---- ------
The aggregate payroll costs of these persons were as
follows:
2019 2018
Pari-mutuel and Racetrack Operations US$000 US$000
----------------------------------------------------- ------- --------
Wages and salaries 1,711 1,866
Social security costs 121 132
1,832 1,998
----------------------------------------------------- ------- --------
6 Income tax expense
(a) Current and Deferred Tax Expenses
The current and deferred tax expenses for the year were US$Nil
(2018: US$Nil). Despite having made losses, 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
2019 2018
US$000 US$000
-------------------------------------------- ------- -------
(Loss)/profit before tax (930) 103
Tax charge at IOM standard rate (0%) - -
Adjusted for:
Tax credit for US tax losses (at 15%) (166) (97)
Add back deferred tax losses not recognised 166 97
-------------------------------------------- ------- -------
Tax charge for the year - -
-------------------------------------------- ------- -------
The maximum deferred tax asset that could be recognised at year
end is approximately US$810,000 (2018: US$644,000). The Group has
not recognised any asset as it is not reasonably known when the
Group will recover such deferred tax assets.
7 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 year.
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 in the
current period has not been reflected in the calculation of the
diluted loss per share, as the effect would have been
anti-dilutive.
2019 2018
US$000 US$000
----------------------------------------------------- ----------- -------------
(Loss)/profit for the year (930) 103
----------------------------------------------------- ----------- -----------
No. No.
----------------------------------------------------- ----------- -------------
Weighted average number of ordinary shares in issue 393,338,310 393,338,310
Dilutive element of share options if exercised (note
16) 14,000,000 14,000,000
----------------------------------------------------- ----------- -------------
Diluted number of ordinary shares 407,338,310 407,338,310
----------------------------------------------------- ----------- -------------
Basic earnings per share (cents) (0.24) 0.03
----------------------------------------------------- ----------- -----------
Diluted earnings per share (cents) (0.23) 0.03
----------------------------------------------------- ----------- -----------
The earnings applied are the same for both basic and diluted
earnings calculations per share as there are no dilutive effects to
be applied.
8 Intangible assets
Software & development Total
Goodwill costs
--------------------------------- --------------- ------------------------- ----------------------------
Group Group Company Group Company
US$000 US$000 US$000 US$000 US$000
--------------------------------- --------------- ------------ ----------- -------- ----------------
Cost
Balance at 1 June 2017 177 1,354 50 1,531 50
Additions during the year - 130 14 130 14
Currency translation differences - 1 - 1 -
--------------------------------- --------------- ------------ ----------- -------- ----------------
Balance at 31 May 2018 177 1,485 64 1,662 64
--------------------------------- --------------- ------------ ----------- -------- ----------------
Balance at 1 June 2018 177 1,485 64 1,662 64
Additions during the year - 18 - 18 -
Balance at 31 May 2019 177 1,503 64 1,680 64
--------------------------------- --------------- ------------ ----------- -------- ----------------
Amortisation and Impairment
Balance at 1 June 2017 177 1,249 50 1,426 50
Amortisation for the year - 70 1 70 1
--------------------------------- --------------- ------------ ----------- -------- ----------------
Balance at 31 May 2018 177 1,319 51 1,496 51
--------------------------------- --------------- ------------ ----------- -------- ----------------
Balance at 1 June 2018 177 1,319 51 1,496 51
Amortisation for the year - 80 6 80 6
--------------------------------- --------------- ------------ ----------- -------- ----------------
Balance at 31 May 2019 177 1,399 57 1,576 57
--------------------------------- --------------- ------------ ----------- -------- ----------------
Carrying amounts
At 1 June 2017 - 105 - 105 -
--------------------------------- --------------- ------------ ----------- -------- ----------------
At 31 May 2018 - 166 13 166 13
--------------------------------- --------------- ------------ ----------- -------- ----------------
At 31 May 2019 - 104 7 104 7
--------------------------------- --------------- ------------ ----------- -------- ----------------
The goodwill balance brought forward relates to the historical
acquisition of subsidiary businesses. The goodwill balances were
fully impaired during the year ended 31 May 2015. The Group tests
intangible assets annually for impairment or more frequently if
there are indications that the intangible assets may be impaired
(see note 1).
9 Property, equipment and motor vehicles
Fixtures,
Fittings
Computer & Track
Equipment Equipment Motor Vehicles Total
Group US$000 US$000 US$000 US$000
--------------------------------- ---------- ---------- -------------- -------
Cost
Balance at 1 June 2017 579 580 51 1,210
Additions during the year 24 - - 24
Currency translation differences 1 - - 1
--------------------------------- ---------- ---------- -------------- -------
Balance at 31 May 2018 604 580 51 1,235
--------------------------------- ---------- ---------- -------------- -------
Balance at 1 June 2018 604 580 51 1,235
--------------------------------- ---------- ---------- -------------- -------
Balance at 31 May 2019 604 580 51 1,235
--------------------------------- ---------- ---------- -------------- -------
Depreciation
Balance at 1 June 2017 546 525 30 1,101
Charge for the year 21 45 8 74
--------------------------------- ---------- ---------- -------------- -------
Balance at 31 May 2018 567 570 38 1,175
--------------------------------- ---------- ---------- -------------- -------
Balance at 1 June 2018 567 570 38 1,175
Charge for the year 19 7 8 34
--------------------------------- ---------- ---------- -------------- -------
Balance at 31 May 2019 586 577 46 1,209
--------------------------------- ---------- ---------- -------------- -------
Carrying amounts
At 1 June 2017 33 55 21 109
--------------------------------- ---------- ---------- -------------- -------
At 31 May 2018 37 10 13 60
--------------------------------- ---------- ---------- -------------- -------
At 31 May 2019 18 3 5 26
--------------------------------- ---------- ---------- -------------- -------
Fixtures
Computer &
Equipment Fittings Total
Company US$000 US$000 US$000
----------------------- ---------- --------- -------
Cost
Balance at 1 June 2017 419 139 558
Additions 10 - 10
----------------------- ---------- --------- -------
Balance at 31 May 2018 429 139 568
----------------------- ---------- --------- -------
Balance at 1 June 2018 429 139 568
----------------------- ---------- --------- -------
Balance at 31 May 2019 429 139 568
----------------------- ---------- --------- -------
Fixtures
Computer &
Equipment Fittings Total
Company US$000 US$000 US$000
----------------------- ---------- --------- -------
Depreciation
Balance at 1 June 2017 403 139 542
Charge for the year 7 - 7
----------------------- ---------- --------- -------
Balance at 31 May 2018 410 139 549
----------------------- ---------- --------- -------
Balance at 1 June 2018 410 139 549
Charge for the year 9 - 9
----------------------- ---------- --------- -------
Balance at 31 May 2019 419 139 558
----------------------- ---------- --------- -------
Carrying amounts
At 1 June 2017 16 - 16
----------------------- ---------- --------- -------
At 31 May 2018 19 - 19
----------------------- ---------- --------- -------
At 31 May 2019 10 - 10
----------------------- ---------- --------- -------
10 Investments
Investments in subsidiaries are held at cost. Details of
investments at 31 May 2019 are as follows:
Holding
Subsidiaries Country of incorporation Activity (%)
----------------------------- ------------------------- --------------------------- -------
Operation of interactive
wagering
WatchandWager.com Limited Isle of Man totaliser hub 100
Operation of interactive
wagering
United States totaliser hub and harness
WatchandWager.com LLC of America racetrack 100
Technical Facilities &
Services Limited Isle of Man Dormant 100
betinternet.com (IOM)
Limited Isle of Man Dormant 100
B.E. Global Services Limited Isle of Man Dormant 100
11 Bonds and deposits
Group Company
2019 2018 2019 2018
US$000 US$000 US$000 US$000
--------------------------------- -------- -------- -------- ---------
Bonds and deposits which expire
within one year 882 2,846 - -
Bonds and deposits which expire
within one to two years - - - -
Bonds and deposits which expire
within two to five years 101 101 - -
--------------------------------- -------- -------- -------- ---------
983 2,947 - -
--------------------------------- -------- -------- -------- ---------
Cash bonds of US$875,000 have been paid as security deposits in
relation to various US State ADW licences (2018: US$925,000). These
cash bonds are held in trust accounts used exclusively for cash
collateral, with financial institutions which have been screened
for their financial strength and capitalization ratio. The
financial institutions have a credit rating of A- Excellent from AM
Best credit rating agency. Therefore, these bonds are considered to
be fully recoverable. A rent deposit of US$100,000 is held by
California Exposition & State Fair and is for a term of 5 years
(2018: US$100,000). This is held by an entity of the Californian
state government and is therefore considered fully recoverable.
Rent and other security deposits total US$8,227 (2018: US$10,123).
These deposits are repayable upon completion of the relevant lease
term, under the terms of legally binding agreements.
Under the terms of the licencing agreement with the Hong Kong
Jockey Club the Company is no longer required to hold a retention
amount (2018: US$1,911,461 / HK$15,000,000).
12 Cash and cash equivalents
Group Company
2019 2018 2019 2018
US$000 US$000 US$000 US$000
-------------------------------------- -------- -------- -------- ----------
Cash and cash equivalents - company
and other funds 1,363 11,962 185 1,531
Cash and cash equivalents - protected
player funds 1,231 1,430 1,231 1,430
-------------------------------------- -------- -------- -------- ----------
Total cash and cash equivalents 2,594 13,392 1,416 2,961
-------------------------------------- -------- -------- -------- ----------
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.
13 Trade and other receivables
Group Company
2019 2018 2019 2018
US$000 US$000 US$000 US$000
------------------------------------ -------- -------- -------- --------
Trade receivables 770 1,635 - -
Amounts due from Group undertakings - - 393 -
Other receivables and prepayments 421 665 34 57
------------------------------------- -------- -------- -------- ----------
1,191 2,300 427 57
------------------------------------ -------- -------- -------- ----------
Included within trade receivables are impairment losses of
US$67,000 (see note 20), (2018: US$Nil).
Amounts due from Group undertakings are unsecured, interest free
and repayable on demand.
14 Trade and other payables
Group Company
2019 2018 2019 2018
US$000 US$000 US$000 US$000
---------------------------------- -------- -------- -------- --------
Trade payables 2,619 15,757 12 14
Amounts due to Group undertakings - - - 1,451
Taxes and national insurance 17 16 2 2
Accruals and other payables 260 548 35 35
----------------------------------- -------- -------- -------- ----------
2,896 16,321 49 1,502
---------------------------------- -------- -------- -------- ----------
Amounts due to Group undertakings are unsecured, interest free
and repayable on demand. Included within trade payables are amounts
due to customers of US$2,194,293 (2018: US$15,656,146).
15 Loans
Group Company
2019 2018 2019 2018
US$000 US$000 US$000 US$000
--------------------------------- -------- -------- -------- ----------
Loan - Galloway Ltd 850 500 850 500
--------------------------------- -------- -------- -------- ----------
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 fixed interest at 7.75%
per annum and is secured over the unencumbered assets of the
company (see note 19). The loan was issued at a market rate with no
issue costs and the interest is settled on a quarterly basis. At
year end there are two month's outstanding interest of US$6,476
(2018: US$6,476), which is recorded in other payables.
A further loan of US$350,000 was received from Galloway Ltd in
May 2019, to provide additional financing for cash-backed bonding
agreements. The loan is for a term of five years, attracts fixed
interest at 7.00% per annum and is secured over the unencumbered
assets of the company (see note 19). The loan was issued at a
market rate with no issue costs and the interest is settled on a
quarterly basis. At year end there is one month's outstanding
interest of US$2,081 (2018: US$Nil), which is recorded in other
payables.
16 Share capital
2019 2018
No. US$000 US$000
------------------------------------------------ ----------- -------- --------
Allotted, issued and fully paid
At beginning and close of year: ordinary shares
of 1p each 393,338,310 6,334 6,334
At 31 May: ordinary shares of 1p each 393,338,310 6,334 6,334
------------------------------------------------ ----------- -------- ----------
The authorised share capital of the Company is US$9,619,000
divided into 600,000,000 ordinary shares of GBP0.01 each (2018:
US$9,619,000 divided into 600,000,000 ordinary shares of GBP0.01
each).
Options
Movements in share options during the year ended 31 May 2019
were as follows:
No.
------------------------------------ ----------
At 31 May 2018 - 1p ordinary shares 14,000,000
------------------------------------ ----------
Options granted -
------------------------------------ ----------
Options lapsed -
------------------------------------ ----------
Options exercised -
------------------------------------ ----------
At 31 May 2019 - 1p ordinary shares 14,000,000
------------------------------------ ----------
During 2016 the Group established an equity-settled share-based
option program. The fair value of options granted is recognised as
an expense, with a corresponding increase in equity. The fair value
is measured at grant date using a Black-Scholes model and is spread
over the vesting period. The amount recognised in equity is
adjusted to reflect the actual number of share options which are
expected to vest. By taking into consideration the volatility of
the shares over the 3 years prior to granting, the volatility of
the options is calculated at 75%, with a risk-free interest rate of
0.86%.
The options were issued on 3 March 2016 to Ed Comins, Managing
Director of the Group. The fair value of each option on the grant
date was estimated as being GBP0.0022. The share options vested on
3 March 2019 after Ed Comins had remained in the employment of the
Group for 3 years from when the options were granted. The options
are able to be exercised from 3 March 2019 and expire on 2 March
2026. The weighted average exercise price of all options is
GBP0.01.
The charge for share options recorded in profit and loss for the
year was US$37,989 (2018: US$1,721), with the corresponding amount
reflected in the share option reserve in the Statement of Financial
Position and Statement of Changes in Equity. Since the grant date,
the total charge in relation to the share options was
US$42,126.
17 Capital commitments
As at 31 May 2019, the Group had no known capital commitments
(2018: US$Nil).
18 Operating lease commitments
At 31 May 2019, the Group was committed to future minimum lease
payments of:
2019 2018
US$000 US$000
--------------------------------------- ------- -------
Payments due within one year 108 108
Payments due between one to five years 186 294
Payments due beyond five years - -
--------------------------------------- ------- -------
The Group has recognised in the income statement operating lease
payments of US$104,000 (2018: US$118,000).
The Group leases office and racetrack facilities. The office
facilities lease expires in May 2021, with an option to renew prior
to the expiry date, for a period yet to be determined, customarily
with the lease rate increasing 2% annually. The racetrack
facilities lease expires in May 2022, with an option to renew
before the expiry date, for a period and rate to be determined at
renewal.
19 Related party transactions
Identity of related parties
The Group has a related party relationship with its subsidiaries
(see note 10), 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$45,484 (2018: US$52,858) and
Directors' fees of US$46,898 (2018: US$48,413) were charged in the
year by Burnbrae Limited, of which Denham Eke and Nigel Caine are
common Directors. The Group also had a loan of US$850,000 (2018:
US$500,000) from Galloway Ltd, a company related to Burnbrae
Limited by common ownership and Directors (note 15).
Transactions with key management personnel
The total amounts for Directors' remuneration were as
follows:
2019 2018
US$000 US$000
----------- ----------------------------------------- ------- -------
Emoluments - salaries, bonuses and taxable benefits 348 350
- fees 67 69
----------------------------------------------------- ------- -------
415 419
----------------------------------------------------- ------- -------
Directors' Emoluments
Basic Termination 2019 2018
salary Fees Bonus payments Benefits Total Total
US$000 US$000 US$000 US$000 US$000 US$000 US$000
--------------------- -------- --------- -------- ------------ ----------- -------- --------
Executive
Ed Comins 310 - - - 38 348 350
Non-executive
Denham Eke* - 26 - - - 26 27
Nigel Caine* - 21 - - - 21 22
Sir James Mellon - 20 - - - 20 20
--------------------- -------- --------- -------- ------------ ----------- -------- --------
Aggregate emoluments 310 67 - - 38 415 419
--------------------- -------- --------- -------- ------------ ----------- -------- --------
* Paid to Burnbrae Limited.
14,000,000 share options were issued to Ed Comins (see note 16)
during 2016.
20 Financial risk management
Capital structure
The Group's capital structure is as follows:
2019 2018
US$000 US$000
---------------------------------------------------- -------- --------
Cash and cash equivalents 2,594 13,392
Loans and similar liabilities (850) (500)
---------------------------------------------------- -------- ----------
Net funds 1,744 12,892
Shareholders' equity (1,152) (2,044)
---------------------------------------------------- -------- ----------
Capital employed 592 10,848
---------------------------------------------------- -------- ----------
The Group's policy is to maintain as strong a capital base as
possible, insofar as can be sustained due to the fluctuations in
the net results of the Group and the inherent effect this has on
the capital structure.
The Group's principal financial instruments comprise cash and
cash equivalents, trade receivables and payables that arise
directly from its operations.
The main purpose of these financial instruments is to finance
the Group's operations. The existence of the financial instruments
exposes the Group to a number of financial risks, which are
described in more detail below.
The principal risks which the Group is exposed to relate to
liquidity risks, credit risks and foreign exchange risks.
Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet
its financial obligations as they fall due.
The Group's objective is to maintain continuity of funding
through trading and share issues but to also retain flexibility
through the use of short-term loans if required.
Management controls and monitors the Group's cash flow on a
regular basis, including forecasting future cash flow. Banking
facilities are kept under review to ensure they meet the Group's
requirements. Funds equivalent to customer balances are held in
designated bank accounts where applicable to ensure that Isle of
Man Gambling Supervision Commission player protection principles
are met. Other customer balances are covered by cash funds held
within the Group and by receivables due from ADW racetrack
settlement partners. The Directors anticipate that the business
will generate sufficient cash flow in the forthcoming period, to
meet its immediate financial obligations.
The following are the contractual maturities of financial
liabilities:
2019
Financial liabilities
Carrying Contractual 6 months Up to 1-5
amount cash flow or less 1 year years
US$000 US$000 US$000 US$000 US$000
------------------------- -------- ----------- -------- ------- -------
Trade payables (2,619) (2,619) (2,619) - -
Other payables and loans (865) (15) (15) - (850)
------------------------- -------- ----------- -------- ------- -------
(3,484) (2,634) (2,634) - (850)
------------------------- -------- ----------- -------- ------- -------
2018
Financial liabilities
Carrying Contractual 6 months Up to 1-5
amount cash flow or less 1 year years
US$000 US$000 US$000 US$000 US$000
------------------------- -------- ----------- -------- ------- -------
Trade payables (15,757) (15,757) (15,757) - -
Other payables and loans (756) (256) (256) - (500)
------------------------- -------- ----------- -------- ------- -------
(16,513) (16,013) (16,013) - (500)
------------------------- -------- ----------- -------- ------- -------
Credit risk
Credit risk is the risk that one party to a financial instrument
will cause a financial loss for the other party by failing to
discharge an obligation.
Impairment losses on financial assets recognised in profit or
loss were as follows:
2019 2018
US$000 US$000
-------------------------------------- ------- -------
Non-credit impaired trade receivables 5 -
Credit impaired trade receivables 62 -
Total impairment losses 67 -
-------------------------------------- ------- -------
The Group's exposure to credit risk is influenced by the
characteristics of the individual racetracks and the settling
agents operating on behalf of these tracks. The racetracks
themselves are influenced by many factors, including the product
they offer, supporting sources of revenue they might generate, such
as offering simulcast, slots or sports wagering facilities, current
economic conditions, ownership structure and so on, all of which
can affect their liquidity.
The Group limits its exposure to credit risk by regular settling
and verification of balances due to and from settling agents, with
standard terms of one month. While there is on occasion debt that
is slower to be settled, historical settlements for the last four
years show that of the current trade receivable balance, greater
than 99% would be expected to be received.
In addition, more than 80% of the current Group customers have
transacted with the Group for four years or more and none of these
customers balances have been specifically impaired in that
period.
The following table provides information about exposure to
credit risk and expected credit losses for trade receivables as at
31 May 2019:
Weighted Gross Carrying Net Carrying Credit Impaired
Average Amount US$000 Loss Allowance Amount
Loss Rate US$000 US$000
(%)
--------------------- -------------- ------------------ -------------------- ---------------- -------------------
Current (not past
due) 0.25% 385 (1) 384 No
1-30 days past
due 0.50% 294 (1) 293 No
31-60 days past
due 1.00% 55 (1) 54 No
61-90 days past
due 2.50% 28 (1) 27 No
More than 90 days
past
due 5.00% 13 (1) 12 No
More than 90 days
past
due 100.00% 62 (62) - Yes
--------------------- -------------- ------------------ -------------------- ---------------- -------------------
837 (67) 770
--------------------- -------------- ------------------ -------------------- ---------------- -------------------
The Group uses an allowance matrix to measure the ECLs of trade
receivables from racetracks and their settling agents, which
comprise a moderate number of balances, ranging from small to
large. The Group has reviewed its historical losses over the past
four years as well as considering current economic conditions in
estimating the loss rates and calculating the corresponding loss
allowance.
Classes of financial assets - carrying amounts
2019 2018
US$000 US$000
---------------------------- ------- -------
Cash and cash equivalents 2,594 13,392
Bonds and deposits 983 2,947
Trade and other receivables 1,051 2,133
---------------------------- ------- -------
4,628 18,472
---------------------------- ------- -------
Generally, the maximum credit risk exposure of financial assets
is the carrying amount of the financial assets as shown on the face
of the balance sheet (or in the notes to the financial statements).
Credit risk, therefore, is only disclosed in circumstances where
the maximum potential loss differs significantly from the financial
asset's carrying amount.
The maximum exposure to credit risks for receivables in any
business segment:
2019 2018
US$000 US$000
------------ ------- -------
Pari-mutuel 1,051 2,133
1,051 2,133
------------ ------- -------
Of the above receivables, US$770,000 (2018: US$1,635,000)
relates to amounts owed from racing tracks. These receivables are
actively monitored to avoid significant concentration of credit
risk and the Directors consider there to be no significant
concentration of credit risk.
The Directors consider that all the above financial assets that
are not impaired for each of the reporting dates under review are
of good credit quality. The banks have external credit ratings of
at least Baa3 from Moody's.
The credit risk for liquid funds and other short-term financial
assets is considered negligible, since the counterparties are
reputable banks with high-quality external credit ratings.
Interest rate risk
The Group finances its operations mainly through capital with
limited levels of borrowings. Cash at bank and in hand earns
negligible interest at floating rates, based principally on
short-term interbank rates.
Any movement in interest rates would not be considered to have
any significant impact on net assets at the balance sheet date as
the Group and Parent Company do not have floating rate loans
payable.
Foreign currency risks
The Group operates internationally and is subject to
transactional foreign currency exposures, primarily with respect to
Pounds Sterling, Hong Kong Dollars and Euros.
The Group does not actively manage the exposures but regularly
monitors the Group's currency position and exchange rate movements
and makes decisions as appropriate.
At the reporting date the Group had the following exposure:
USD GBP EUR HKD Total
2019 US$000 US$000 US$000 US$000 US$000
----------------------- ----------- -------- -------- -------- ---------
Current assets 3,128 289 427 683 4,527
Current liabilities (1,911) (196) (84) (688) (2,879)
----------------------- ----------- -------- -------- -------- ---------
Short-term exposure 1,217 93 343 (5) 1,648
----------------------- ----------- -------- -------- -------- -------
USD GBP EUR HKD Total
2018 US$000 US$000 US$000 US$000 US$000
-------------------- ------- ------- -------- ------- --------
Current assets 2,744 225 11,214 4,186 18,369
Current liabilities (2,013) (281) (10,027) (3.984) (16,305)
-------------------- ------- ------- -------- ------- --------
Short-term exposure 731 (56) 1,187 202 2,064
-------------------- ------- ------- -------- ------- --------
The following table illustrates the sensitivity of the net
result for the year and equity with regards to the Group's
financial assets and financial liabilities and the US
Dollar-Sterling exchange rate, US Dollar-Euro exchange rate and US
Dollar-Hong Kong Dollar exchange rate.
A 5% weakening of the US Dollar against the following currencies
at 31 May 2019 would have increased/(decreased) equity and profit
and loss by the amounts shown below:
GBP EUR HKD Total
2019 US$000 US$000 US$000 US$000
----------------------------------- -------- -------- -------- ----------
Current assets 15 21 34 70
Current liabilities (10) (4) (34) (48)
----------------------------------- -------- -------- -------- ----------
Net assets 5 17 - 22
----------------------------------- -------- -------- -------- --------
GBP EUR HKD Total
2018 US$000 US$000 US$000 US$000
-------------------- ------- ------- ------- -------
Current assets 11 561 209 781
Current liabilities (14) (501) (199) (714)
-------------------- ------- ------- ------- -------
Net assets (3) 60 10 67
-------------------- ------- ------- ------- -------
A 5% strengthening of the US Dollar against the above currencies
would have had the equal but opposite effect on the above
currencies to the amounts shown above on the basis that all other
variables remain constant.
21 Controlling party and ultimate controlling party
The Directors consider the ultimate controlling party to be
Burnbrae Limited and its beneficial owner Jim Mellon by virtue of
their combined shareholding of 63.10%.
22 Subsequent events
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR EAFFXAAANFAF
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November 28, 2019 02:01 ET (07:01 GMT)
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