TIDMWEB
RNS Number : 1109E
Webis Holdings PLC
26 February 2020
For immediate release
26 February 2020
Webis Holdings plc
("Webis" or "the Group")
Interim Report and Financial Statements for the period ended 30
November 2019 ("The Report")
Webis Holdings plc, the global gaming group, today announces its
unaudited interim results for the period ended 30 November 2019,
extracts from which are set out below.
The Report is available on the Company's website
www.webisholdingsplc.com and at the Group's registered office:
Viking House, Nelson Street, Douglas, Isle of Man IM1 2AH
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014
For further information:
Webis Holdings plc Tel: 01624 639396
Denham Eke
Beaumont Cornish Limited Tel: 020 7628 3396
Roland Cornish/James Biddle
Chairman's Statement
Introduction
It has been an improved first six months trading for
WatchandWager.com, with an increase in turnover, plus a further
reduction in operating costs, which has helped to reduce our
previously reported losses. In addition, there have been some
positive recent developments for the business in the USA, which are
commented upon below.
Against that, the previously reported loss of a large syndicate
wagering into international pools did have some impact on our
year-on-year comparisons of activity through our platform, with
total amounts wagered reduced. However, as stated, both turnover
and gross profit returned were up on the previous year - an
improved situation. It should be noted that the loss of the
syndicate will no longer impact year-on-year comparisons into the
second half of the year. In addition, the loss of this syndicate
allows us to operate a more balanced business, with less reliance
on one group of customers.
Our other sectors of the business performed well. In particular,
our business-to-consumer Advanced Deposit Wagering operation
surpassed expectations. Our business trading sector held up well
but continues to be impacted by competition and reduced margins in
this sector.
On an equally positive note, our racetrack operation at Cal
Expo, Sacramento, California, performed well during the off-season
racing (May to November), and has started the new season of racing
very well.
In summary, the Board feel the business has turned a corner,
with a better-balanced mix, and an improved retained gross margin.
Initial trends for the second half of the year suggest this
momentum will be maintained. Most importantly, the Company,
particularly through its US array of licenses - especially its
online and racetrack license in California - has created and
secured a unique set of assets in the fastest growing gaming market
in the world. This is commented on in more detail below under
Outlook.
Half Year Results Review
Group turnover increased significantly by nearly 50% to US$ 8.06
million (2018: US$ 5.38 million), with gross profit also increasing
to US$ 1.79 million (2018: US$ 1.70 million). This resulted in a
65% reduction in overall losses to US$ 0.21 million (2018: loss of
US$ 0.59 million) for the period. This again reflects the loss of
syndicate business but has improved our overall margin derived from
more "retail-style" wagering activity, both through our on-line
operations and through the racetrack. This is encouraging for the
future.
Operating costs showed a further decrease to US$ 2.01 million
(2018: US$ 2.17 million) and reflected our continued policy of
controlling costs and generally streamlining the operation. Both
the improvement in the margin derived from wagering and cost
controls have helped to reduce our overall operating losses by
almost threefold. This trend is expected to continue in the second
half of the year.
WatchandWager Advanced Deposit Wagering
Business-to-consumer - this sector performed well over the
period. Whilst we do not see the watchandwager.com/mobile product
as a key brand within our future plans for USA sports betting, it
is critically important that it continues to grow. Over the period,
we saw an increase of 10% in amounts wagered and most importantly a
26% increase in the gross margin derived from the wagers on the
website and mobile product. This is a direct result of some cost
reductions but also targeting promotions at high margin racetracks
and customers. This strategy has worked well and is planned to
continue through the second half of the year, and our business
planning for subsequent years.
Business-to-business - conversely trading was largely flat in
this sector, even discounting the loss of the syndicate. Whilst we
continue to service a wide range of customers on a wide range of
international tracks, this sector is becoming increasingly
competitive in nature. In particular, we compete with a wide range
of operators who seem intent on maximising the volume of amounts
wagered at the expense of margin. This is, of course, something of
a race to the bottom and not commercially attractive, doing little
to increase the value of the Company for shareholders. As a result,
we continue with our strategy of growing our team of players for as
long as a reasonable margin can be maintained, and activity is
permitted within our regulatory obligations.
Cal Expo
During the period we benefited from a higher proportion of
revenues from international amounts wagered in California, as per
the new "international bill" mentioned in our last Annual Report.
This benefit is likely to continue particularly during the
off-season of
Racing. In early November, WatchandWager re-commenced harness
racing at the Cal Expo racetrack in Sacramento for the eighth
successive season. Initial trading during the period has surpassed
expectations.
Licenses
During the period, we have concentrated on obtaining important
licence applications and renewals. I am pleased to report that all
licence applications were successful, and include the key strategic
states of California, New York and Kentucky, amongst others. These
licences are all in good standing through the entirety of 2020 and,
in certain cases, beyond.
Health and Safety
Shareholders should be aware of the larger than normal number of
horseracing fatalities at one of our partner racetracks, namely
Santa Anita, Pasadena, California. This has created a large amount
of negative publicity both state-wide and internationally regarding
horse welfare and is a concern for the future of the industry.
WatchandWager at Cal Expo enjoys an excellent horse welfare
record during our eight years of operation. In particular, as a
standard-bred (harness racing) operation, it has not suffered any
fatalities on the racetrack either during live operations or
training. Nonetheless, we and the management team are very aware of
the impact of negative publicity on the industry generally and,
potentially, live racing in California. As a result, our key
management are paying ever more attention to welfare and also
making involved partners, such as regulators, politicians and
indeed the general public, fully aware of our excellent welfare
record and the importance of live racing in California, especially
in terms of the value of jobs and taxes paid within the State.
Outlook
Short term
I am pleased to report that performance has been a little above
expectation across our key sectors from December to the time of
writing. We have seen particularly good performance from our
business-to-consumer unit and the racetrack in California. Whilst
the final quarter of the year will be very important during peak
racing season in the USA and internationally, at present the Board
are positive that the momentum can be maintained to end May 2020
and beyond.
Longer term
Existing operations
As stated, the Board is confident that existing operations have
now stabilised and can indeed return to profitability. The
operation is run leanly and whilst the external welfare issues
impacting horseracing and greyhound racing are a concern, there
remain significant opportunities, both domestic and international,
for new player content. Our strategy is to grow our platform
through additional content and players, but continually focussing
on higher margin business. However, the Board recognise that the
ultimate goal is to capitalise on the huge opportunities available
within USA expanded gaming landscape.
USA Expanded Gaming
Cal Expo/California
During the period, some significant progress has been made
within California to join the ever-growing number of states
legalising fixed odds sports betting. As a result of this, the
decision was made by the Board to extend our lease at the Cal Expo
racetrack for a further five years (to 2025), with an option to
extend even further to 2030. This was a strategic decision based on
legislative progress in the State Capitol in Sacramento, and to
secure our position in the face of competitive influences.
Since then the situation has coalesced into two major, but
competing, initiatives. The first being the State backed Senator
Gray/Dodd Bill (ACA 16), which continues to be debated in
Sacramento. The adoption of this is our preferred solution as in
draft form it includes our racetrack as an operator who could be
licensed, but also allows for online/mobile operations, plus white
label options to expand. In addition, a sensible tax rate in line
with the successful New Jersey model is suggested. The second
initiative, namely the proposed constitutional amendment tabled by
several Native American tribal casinos is also welcome but much
narrower in definition, including only land-based activity, with no
mobile betting. There are several other restrictions placed upon
the racetracks before they can undertake sports betting. The wider
Gray/Dodd initiative, which will undoubtedly be more attractive for
customers, would create many more jobs and tax payments within
California. In conjunction with other interested parties, we are
working hard to ensure that the key decision makers in Sacramento
are aware of these facts.
In the interim, we are busy developing our strategy for sports
betting. We see WatchandWager as the Licensed Association
responsible for the operation, and as result will work with
selected suppliers in both software, risk management, compliance
and marketing amongst others. We have currently issued a Request
for Proposal (RFP) for these functions to key suppliers and have
been excited by initial responses.
In terms of timing, a date for legal sports betting is difficult
to predict at present. Should either initiative reach the
California ballot on 3 November 2020, legal wagering could commence
in 2021. However, at time of writing, 2022 is more realistic, we
will keep shareholders fully informed as to progress.
Other States
Shareholders should also be aware that the Executive are also
working on other initiatives in relation to expanded gaming not
only in California, but also Arizona, Kentucky and North Dakota,
plus certain potential international developments. We will inform
shareholders should these move forward.
Summary
We are pleased with the overall progress of the Company. We have
restructured the business and, as a result, it is more balanced and
generating a much-improved margin. We will focus on this key
priority going forward.
In terms of strategy, the Board are very aware of our key
assets, namely the securing of our licenses in California,
especially the long-term agreement with Cal Expo. There are still
many hurdles to be overcome, and the next six months will be very
busy with the potential for impending legislation and selecting
partners. One thing is for sure: licensed Sports Betting is coming
to California, and we hold a critical asset in the State Capitol.
We are very aware that there is likely to be a stampede of
commercial interest in gaming in one of the largest economies in
the world. We will keep shareholders fully informed of progress in
this area.
Denham Eke
Non-executive Chairman
Condensed Consolidated Statement of Comprehensive Income
For the period ended 30 November 2019
Period to
30 November
Period to 2018
30 November
2019 (unaudited) (unaudited)
Note US$000 US$000
--------------------------------------------------- ----- ------------------- --------------
Amounts wagered 37,725 61,150
--------------------------------------------------- ----- ------------------- --------------
Turnover 2 8,060 5,382
Cost of sales (6,228) (3,581)
Betting duty paid (42) (100)
--------------------------------------------------- ----- ------------------- --------------
Gross profit 1,790 1,701
--------------------------------------------------- ----- ------------------- --------------
Operating costs (2,006) (2,170)
Share based costs - (18)
--------------------------------------------------- ----- ------------------- --------------
Other losses (10) (163)
Other income 60 79
Operating loss (166) (571)
--------------------------------------------------- ----- ------------------- --------------
Finance costs 3 (41) (20)
--------------------------------------------------- ----- ------------------- --------------
Loss before income tax (207) (591)
--------------------------------------------------- ----- ------------------- --------------
Income tax expense 4 - -
--------------------------------------------------- ----- ------------------- --------------
Loss for the period (207) (591)
--------------------------------------------------- ----- ------------------- --------------
Other comprehensive income for the period - -
--------------------------------------------------- ----- ------------------- --------------
Total comprehensive income for the period (207) (591)
--------------------------------------------------- ----- ------------------- --------------
Basic and diluted earnings per share for loss
attributable to the equity holders of the Company
during the period (cents) 5 (0.05) (0.15)
--------------------------------------------------- ----- ------------------- --------------
The notes set out below form an integral part of these condensed
consolidated interim financial statements.
Condensed Consolidated Statement of Financial Position
As at 30 November 2019
As at Year to
30 November 31 May
2019 2019
(unaudited) (audited)
Note US$000 US$000
--------------------------------------- ----- -------------- ------------
Non-current assets
Intangible assets 6 68 104
Property, equipment and motor vehicles 15 26
Right of use assets 1.4 439 -
Bonds and deposits 100 101
--------------------------------------- ----- -------------- ------------
Total non-current assets 622 231
--------------------------------------- ----- -------------- ------------
Current assets
Bonds and deposits 883 882
Trade and other receivables 965 1,191
Cash and cash equivalents 7 2,758 2,594
--------------------------------------- ----- -------------- ------------
Total current assets 4,606 4,667
--------------------------------------- ----- -------------- ------------
Total assets 5,228 4,898
--------------------------------------- ----- -------------- ------------
Equity
Called up share capital 6,334 6,334
Share option reserve 42 42
Retained losses (5,431) (5,224)
--------------------------------------- ----- -------------- ------------
Total equity 945 1,152
--------------------------------------- ----- -------------- ------------
Current liabilities
Trade and other payables 2,977 2,896
Lease liability 1.4 88 -
--------------------------------------- ----- -------------- ------------
Total current liabilities 3,065 2,896
--------------------------------------- ----- -------------- ------------
Non-current liabilities
Loans 8 85 0 850
Lease liability 1.4 368 -
--------------------------------------- ----- -------------- ------------
Total non-current liabilities 1,218 850
--------------------------------------- ----- -------------- ------------
Total liabilities 4,283 3,746
--------------------------------------- ----- -------------- ------------
Total equity and liabilities 5,228 4,898
--------------------------------------- ----- -------------- ------------
The notes set out below form an integral part of these condensed
consolidated interim financial statements.
Condensed Consolidated Statement of Changes in Equity
For the period ended 30 November 2019
Called up Share option Retained Total
share capital reserve earnings equity
US$000 US$000 US$000 US$000
Balance as at 31 May 2018
(audited) 6,334 4 (4,294) 2,044
Total comprehensive income
for the period:
Loss for the period - - (591) (591)
Transactions with owners:
Share-based payment expense - 18 - 18
Balance as at 30 November
2018 (unaudited) 6,334 22 (4,885) 1,471
---------------------------- --------------- ------------- ---------- --------
Balance as at 31 May 2019
(audited) 6,334 42 (5,224) 1,152
Total comprehensive income
for the period:
Loss for the period - - (207) (207)
Transactions with owners:
Share-based payment expense - - - -
Balance as at 30 November
2019 (unaudited) 6,334 42 (5,431) 945
---------------------------- ----- ------- -----
The notes set out below form an integral part of these condensed
consolidated interim financial statements.
Condensed Consolidated Statement of Cash Flows
For the period ended 30 November 2019
Period to Period to
30 November 30 November
2019 2018
(unaudited) (unaudited)
Note US$000 US$000
----------------------------------------------- ---- ------------- --------------
Cash flows from operating activities
Loss before income tax (207) (591)
Adjustments for:
* Depreciation 47 18
* Amortisation of intangible assets 38 42
* Finance costs 3 41 20
* Share based payment expense - 18
* Other foreign exchange movements (8) 524
Changes in working capital:
* Decrease in receivables 226 1,501
* Increase/(decrease) in payables 81 (13,534)
Cash flows generated from/(used in) operations 218 (12,002)
Bonds and deposits utilised in the course
of operations - 1,962
Net cash generated from/(used in) operating
activities 218 (10,040)
----------------------------------------------- ---- ------------- --------------
Cash flows from investing activities
Purchase of intangible assets - (6)
Purchase of property, equipment and motor
vehicles (5) -
Net cash used in investing activities (5) (6)
----------------------------------------------- ---- ------------- --------------
Cash flows from financing activities
Payment of lease liabilities 1.4 (17) -
Interest and charges paid 3 (41) (20)
Net cash used in financing activities (58) (20)
----------------------------------------------- ---- ------------- --------------
Net increase/(decrease) in cash and cash
equivalents 155 (10,066)
Cash and cash equivalents at beginning of
year 2,594 13,392
Exchange movements on opening cash and cash
equivalents 9 (525)
----------------------------------------------- ---- ------------- --------------
Cash and cash equivalents at end of period 2,758 2,801
----------------------------------------------- ---- ------------- --------------
The notes set out below form an integral part of these condensed
consolidated interim financial statements.
Notes to the Condensed Consolidated Interim Financial
Statements
For the period ended 30 November 2019
1 Reporting entity
Webis Holdings plc (the "Company") is a company domiciled in the
Isle of Man. The address of the Company's registered office is
Viking House, Nelson Street, Douglas, Isle of Man, IM1 2AH. The
Webis Holdings plc unaudited condensed consolidated financial
statements as at and for the period ended 30 November 2019
consolidate those of the Company and its subsidiaries (together
referred to as the "Group").
1.1 Basis of accounting
The unaudited condensed consolidated financial statements of the
Group (the "Financial Information") are prepared in accordance with
Isle of Man law and International Financial Reporting Standards
("IFRS") and their interpretations issued by the International
Accounting Standards Board ("IASB") and adopted by the European
Union ("EU"). The financial information in this report has been
prepared in accordance with the Group's accounting policies. Full
details of the accounting policies adopted by the Group are
contained in the consolidated financial statements included in the
Group's annual report for the year ended 31 May 2019 which is
available on the Group's website: www.webisholdingsplc.com.
The accounting policies and methods of computation and
presentation adopted in the preparation of the Financial
Information are consistent with those described and applied in the
consolidated financial statements for the year ended 31 May 2019,
other than as described further below in Note 1.4.
The unaudited condensed consolidated financial statements do not
constitute statutory financial statements. The statutory financial
statements for the year ended 31 May 2019, extracts of which are
included in these unaudited condensed consolidated financial
statements, were prepared under IFRS as adopted by the EU and have
been filed at Companies Registry.
1.2 Use of judgements and estimates
The preparation of the Financial Information requires management
to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and
liabilities, income and expenses. Actual results could differ
materially from these estimates. In preparing the Financial
Information, the critical judgements made by management in applying
the Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated
financial statements as at and for the year ended 31 May 2019 as
set out in those financial statements.
1.3 Functional and presentation currency
The Financial Information is presented in US Dollars, rounded to
the nearest thousand, which is the functional currency and also the
presentation currency of the Group.
1.4 Changes in accounting policies
Except as described below, the accounting policies applied in
these interim financial statements are the same as those applied in
the last annual financial statements.
The changes in accounting policies are also expected to be
reflected in the Group's consolidated financial statements as at
and for the year ending 31 May 2020. The Group has initially
adopted IFRS 16 Leases from 1 June 2019. There are no other new
IFRSs or interpretations effective from 1 June 2019 which have had
a material effect on the financial information included in this
report.
IFRS 16 introduced a single, on-balance sheet accounting model
for lessees. As a result, the Group, as a lessee, has recognised
right of use assets representing its rights to use the underlying
assets and lease liabilities representing its obligation to make
lease payments.
The Group has applied IFRS 16 using the modified retrospective
approach, under which the cumulative effect of initial application
is recognised in retained earnings as at 1 June 2019. Accordingly,
the comparative information presented to 31 May 2019 has not been
restated - i.e. it is presented, as previously reported, under IAS
17 and related interpretations.
The details of the changes in accounting policies are disclosed
below.
A. Definition of a lease
Previously, the Group determined at contract inception whether
an arrangement was or contained a lease under IAS 17. The Group now
assesses whether a contract is, or contains, a lease based on the
new definition of a lease. Under IFRS 16, a contract is, or
contains, a lease if the contract conveys a right to control the
use of an identified asset for a period of time in exchange for
consideration.
On transition to IFRS 16, the Group elected to apply the
practical expedient to grandfather the assessment of which
transactions are leases. It applied IFRS 16 only to contracts that
were previously identified as leases. Contracts that were not
identified as leases under IAS 17 were not reassessed. Therefore,
the definition of a lease under IFRS 16 has been applied only to
contracts entered into or changed on or after 1 June 2019.
B. As a lessee
The Group leases property assets. As a lessee, the Group
previously classified these leases as operating leases based on its
assessment of whether the lease transferred substantially all of
the risks and rewards of ownership. Under IFRS 16, the Group
recognises right of use assets and lease liabilities for leases
that meet the relevant definition, presenting these leases on the
Statement of Financial Position.
The Group does not recognise right of use assets and lease
liabilities for property rental costs that do not meet the
definition of leases under IFRS 16. The Group recognises these
costs as an expense on a straight-line basis.
i. Significant accounting policies
The Group recognises a right of use asset and a lease liability
at the lease commencement date. The right of use asset is initially
measured at cost, and subsequently at cost less accumulated
depreciation and impairment loss and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted at the Group's applicable incremental borrowing
rate.
The lease liability is subsequently increased by the interest
cost of the lease liability and decreased by the lease payment
made. It is remeasured when there is a change in future lease
payments arising from a change in an index or rate, a change in the
estimate of the amount expected to be payable under a residual
value guarantee, or as appropriate, changes in the assessment of
whether a purchase or extension option is reasonably certain to be
exercised, or a termination option is reasonably certain not to be
exercised.
The Group has applied judgment to determine the lease term for
some lease contracts in which it is a lessee that include renewal
options. The assessment of whether the Group is reasonably certain
to exercise such options impacts the lease term, which affects the
amount of lease liabilities and right of use assets recognised.
ii. Impacts on transition
Previously, the Group classified property leases as operating
leases under IAS 17. The leases typically run for a period of 1 to
6 years and the operating lease commitment relating to these leases
at 31 May 2019 as disclosed in the Group's consolidated financial
statements was US$294,000. At transition, for relevant leases
classified as operating leases under IAS 17, lease liabilities were
measured at the present value of the remaining lease payments,
discounted at the Group's applicable incremental borrowing rate as
at 1 June 2019. Right of use assets are measured at an amount equal
to the lease liability, adjusted by the amount of any net prepaid
and accrued lease payments, if applicable. The impact on transition
is summarised below.
As at 1 June 2019 US$000
-------------------- ------
Right of use assets 262
Lease liabilities (262)
Retained earnings -
--------------------- ------
iii. Impacts for the period
Right of use assets
The carrying amount of right of use assets at the end of the
period is as follows:
Right of
Property use assets
US$000 US$000
------------------------------------ -------- -----------
Balance at 1 June 2019 262 262
Depreciation expense (34) (34)
Modification to right of use assets 211 211
------------------------------------ -------- -----------
Balance at 30 November 2019 439 439
------------------------------------ -------- -----------
Lease liability
The carrying amount of lease liability at the end of the period
is as follows:
Property Lease liability
US$000 US$000
---------------------------------- -------- ---------------
Balance at 1 June 2019 262 262
Interest expense 10 10
Lease payments (27) (27)
Modification to lease liabilities 211 211
---------------------------------- -------- ---------------
Balance at 30 November 2019 456 456
---------------------------------- -------- ---------------
The Group has classified cash payments for the principal portion
of lease payments as financing activities. During the period under
review, an extension was agreed to the lease term of one of the
finance leases, which has resulted in a modification to the
relevant right of use asset and lease liability.
iv. Exemptions taken
The Group used the following practical expedient when applying
IFRS 16 to leases previously classified as operating leases under
IAS 17:
-- Applied the exemption not to recognise right of use assets
and lease liabilities for leases with less than 12 months of lease
term.
1.5 Going Concern
As noted within the statutory financial statements for the year
ended 31 May 2019, the Directors have undertaken several strategies
to support and sustain the Group as a going concern. These include,
seeking to broadening its client base and expand its business to
customer base, renewing various US state licenses, extending the
lease terms of the Cal Expo racetrack, reducing operational costs
and continuing to monitor the status of sports betting legislation
within the State of California, all of which are key priorities for
the Group in achieving its goal of profitability and maintaining
adequate liquidity in order to continue its operations. While the
Directors continue to assess all strategic options in this regard,
the ultimate success of strategies adopted is difficult to predict.
Notwithstanding the losses incurred in the last financial year,
along with the continued support of the Company's principal
shareholder, via Galloway Limited, a related party, the Directors
believe that the Group has adequate resources to meet its
obligations as they fall due.
2 Operating Segments
A. Basis for segmentation
The Group has the below two operating segments, which are its
reportable segments. The segments offer different services in
relation to various forms of pari-mutuel racing, which are managed
separately due to the nature of their activities.
Reportable segments and operations provided
Racetrack operations - hosting of races through the management
and operation of a racetrack facility, enabling patrons to attend
and wager on horse racing, as well as utilise simulcast
facilities.
ADW operations - provision of online ADW services to enable
customers to wager into global racetrack betting pools.
The Group's Board of Directors review the internal management
reports of the operating segments on a monthly basis.
B. Information about reportable segments
Information relating to the reportable segments is set out
below. Segment revenue along with segment profit / (loss) before
tax are used to measure performance as management considers this
information to be a relevant indicator for evaluating the
performance of the segments.
Reportable segments
All other
Racetrack ADW segments Total
Period to 30 November 2019 (unaudited) US$000 US$000 US$000 US$000
---------------------------------------- ----------- -------- --------- -------
External revenues 6,879 1,181 - 8,060
Segment revenue 6,879 1,181 - 8,060
---------------------------------------- ----------- -------- --------- -------
Segment loss before tax (37) (149) (21) (207)
Finance costs (8) (2) (31) (41)
Depreciation and amortisation (21) (64) - (85)
Period to 30 November 2019 (unaudited)
---------------------------------------- ----------- -------- --------- -------
Segment assets 852 2,900 1,476 5,228
---------------------------------------- ----------- -------- --------- -------
Segment liabilities 636 2,694 953 4,283
---------------------------------------- ----------- -------- --------- -------
Reportable segments
All other
Racetrack ADW segments Total
Period to 30 November 2018 (unaudited) US$000 US$000 US$000 US$000
--------------------------------------- ----------- -------- --------- -------
External revenues 4,128 1,254 - 5,382
Segment revenue 4,128 1,254 - 5,382
--------------------------------------- ----------- -------- --------- -------
Segment loss before tax (76) (436) (79) (591)
Finance costs - - (20) (20)
Depreciation and amortisation (4) (56) - (60)
--------------------------------------- ----------- -------- --------- -------
Period to 31 May 2019 (audited)
--------------------------------------- ----------- -------- --------- -------
Segment assets 423 2,612 1,863 4,898
--------------------------------------- ----------- -------- --------- -------
Segment liabilities 181 2,666 899 3,746
--------------------------------------- ----------- -------- --------- -------
C. Reconciliations of information on reportable segments to the
amounts reported in the financial statements
Period to Period to
30 November 30 November
2019 2018
(unaudited) (unaudited)
US$000 US$000
---------------------------------------------- ------------ ------------
i. Revenues
Total revenue for reportable segments 8,060 5,382
---------------------------------------------- ------------ ------------
Consolidated revenue 8,060 5,382
---------------------------------------------- ------------ ------------
ii. Loss before tax
Total loss before tax for reportable segments (186) (512)
Loss before tax for other segments (21) (79)
---------------------------------------------- ------------ ------------
Consolidated loss before tax (207) (591)
---------------------------------------------- ------------ ------------
iii. Other material items
Finance costs (41) (20)
Depreciation and amortisation (85) (60)
---------------------------------------------- ------------ ------------
Period to Period to
30 November 31 May
2019 2019
(unaudited) (audited)
iv. Assets US$000 US$000
Total assets for reportable segments 3,752 3,035
Assets for other segments 1,476 1,863
---------------------------------------------- ------------ ------------
Consolidated total assets 5,228 4,898
---------------------------------------------- ------------ ------------
v. Liabilities
Total liabilities for reportable segments 3,330 2,847
Liabilities for other segments 953 899
---------------------------------------------- ------------ ------------
Consolidated total liabilities 4,283 3,746
---------------------------------------------- ------------ ------------
D. Geographic information
The below table analyses the geographic location of the customer
base of the operating segments.
Period to
Period to 30
30 November November
2019 (unaudited) 2018 (unaudited)
Turnover US$000 US$000
--------------------- -------------- ----------------- -----------------
Racetrack operations North America 6,879 4,128
ADW operations North America 765 669
British
Isles 404 1
Asia Pacific 12 583
Europe - 1
8,060 5,382
------------------------------------ ----------------- -----------------
3 Finance costs
Period to Period to
30 November 30 November
2019 2018
(unaudited) (unaudited)
US$000 US$000
--------------------------------- ------------ ------------
Loan interest payable (31) (20)
Lease liability interest payable (10) -
--------------------------------- ------------ ------------
Finance costs (41) (20)
--------------------------------- ------------ ------------
4 Income tax expense
(a) Current and Deferred Tax Expenses
The current and deferred tax expenses for the period were US$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
Period to Period to
30 November 30 November
2019 2018
(unaudited) (unaudited)
US$000 US$000
-------------------------------------------- ------------ ------------
Losses before tax (207) (591)
Tax charge at IOM standard rate (0%) - -
Adjusted for:
Tax credit for US tax losses (at 15%) (65) (100)
Add back deferred tax losses not recognised 65 100
-------------------------------------------- ------------ ------------
Tax charge for the period - -
-------------------------------------------- ------------ ------------
The maximum deferred tax asset that could be recognised at
period end is approximately US$875,000 (2018: US$744,000). The
Group has not recognised any asset as it is not reasonably known
when the Group will recover such deferred tax assets.
5 Earnings per ordinary share
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the period.
The calculation of diluted earnings per share is based on the
basic earnings per share, adjusted to allow for the issue of
shares, on the assumed conversion of all dilutive share
options.
An adjustment for the dilutive effect of share options and
convertible debt in the previous period has not been reflected in
the calculation of the diluted loss per share, as the effect would
have been anti-dilutive.
Period to Period to
30 November 30 November
2019 2018
(unaudited) (unaudited)
US$000 US$000
-------------------- ------------ --------------
Loss for the period (207) (591)
-------------------- ------------ ------------
No. No.
---------------------------------------------------- ----------- -------------
Weighted average number of ordinary shares in issue 393,338,310 393,338,310
Dilutive element of share options if exercised 14,000,000 14,000,000
---------------------------------------------------- ----------- -------------
Diluted number of ordinary shares 407,338,310 407,338,310
---------------------------------------------------- ----------- -------------
Basic earnings per share (cents) (0.05) (0.15)
---------------------------------------------------- ----------- -----------
Diluted earnings per share (cents) (0.05) (0.15)
---------------------------------------------------- ----------- -----------
The earnings applied are the same for both basic and diluted
earnings calculations per share as there are no dilutive effects to
be applied.
6 Intangible assets
Intangible assets include goodwill which relates to the
acquisition of the pari-mutuel business which is both a cash
generating unit and a reportable segment, including goodwill
arising on the acquisition in 2010 of WatchandWager.com LLC, a US
registered entity licenced for pari-mutuel wagering in North
Dakota.
The Group tests intangible assets annually for impairment, or
more frequently if there are indicators that the intangible assets
may be impaired. The goodwill balance was fully impaired in the
financial year ended 31 May 2015.
7 Cash and cash equivalents
30 November 31 May
2019 2019
(unaudited) (audited)
US$000 US$000
--------------------------------------------------- ------------- -----------
Cash and cash equivalents - company and other
funds 1,516 1,363
Cash and cash equivalents - protected player funds 1,242 1,231
Total cash and cash equivalents 2,758 2,594
--------------------------------------------------- ------------- -----------
The Group holds funds for operational requirements and for its
non-Isle of Man customers, shown as 'company and other funds' and
on behalf of its Isle of Man regulated customers, shown as
'protected player funds'.
Protected player funds are held in fully protected client
accounts within an Isle of Man regulated bank.
8 Loans
30 November 31 May
2019 2019
(unaudited) (audited)
US$000 US$000
-------------------- ------------ ----------
Loan - Galloway Ltd 850 850
850 850
-------------------- ------------ ----------
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 9). The loan was issued at a market rate with no
issue costs and the interest is settled on a quarterly basis. At
period 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 9). The loan was issued at a market
rate with no issue costs and the interest is settled on a quarterly
basis. At period end there is one month's outstanding interest of
US$2,014 (2018: US$Nil), which is recorded in other payables.
9 Related party transactions
Identity of related parties
The Group has a related party relationship with its
subsidiaries, and with its directors and executive officers and
with Burnbrae Ltd (common directors and significant
shareholder).
Transactions with and between subsidiaries
Transactions with and between the subsidiaries in the Group
which have been eliminated on consolidation are considered to be
related party transactions.
Transactions with entities with significant influence over the
Group
Rental and service charges of US$5,205 (2018: US$25,714) and
directors' fees of US$22,586 (2018: US$23,562) were charged in the
period by Burnbrae Ltd 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 (see note 8).
Transactions with other related parties
There were no transactions with other related parties during the
period.
10 Events after the Balance Sheet Date
As previously announced on 4 December 2019, the company signed
an extension of the lease for the Cal Expo racetrack facility,
located in Sacramento, California, through to 1 May 2025. This
modified the terms of the lease and resulted in an uplift of
US$211,245 to both the right of use asset and lease liability at
the period end (see note 1.4).
11 Approval of interim statements
The interim statements were approved by the Board on 25 February
2020. The interim report is expected to be available for
shareholders on 26 February 2020 and will be available from that
date on the Group's website www.webisholdingsplc.com.
The Group's nominated adviser and broker is Beaumont Cornish
Limited, 10th Floor, 30 Crown Place, London EC2A 4EB.
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
IR FLFLDFRIEFII
(END) Dow Jones Newswires
February 26, 2020 02:00 ET (07:00 GMT)
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