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euro adhoc: betbull - The European Betting Exchange Plc.
Annual Reports /
Betbull announces 2005 Audited Results and a Year of Significant Growth and
@@start.t1@@-------------------------------------------------------------------------------- Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement. --------------------------------------------------------------------------------@@end@@
Betbull announces 2005 Audited Results and a Year of Significant Growth and Change
Ad-hoc Notice - 31st March 2006
Financial highlights: Betbull group with considerable growth in QIV
@@start.t2@@ . Betbull Group Results for the year 2005
- Net gaming revenue of £2.7 million
- Adjusted operating loss of £2.8 million (£3.6 million after share
- Healthy cash position at year end of £7.3 million
. Betbull Group Results for QIV 2005 (unaudited)
- Net gaming revenue of £2.6 million
- Operating loss of £0.1 million (before £0.9 million after share
. Leip Group Results for the year ended 2005 above expectations@@end@@
Business highlights: Strategic Repositioning successfully completed
@@start.t3@@ . Acquisition of the Leip Group, a major German retail betting group,
fuelling further growth
. Subsequent private placing to fund the acquisition of the Leip Group
. Relaunch of the exchange betting websites www.betbull.com and
. Completion of a corporate restructuring and cost cutting program@@end@@
Financial highlights: Betbull group with considerable growth in QIV
Betbull Group Results for the Year 2005
Net gaming revenue of £2.7 million The successful acquisition of the Leip Group at the end of QIII ensured a significant increase in net gaming revenue in 2005 (2004 - £0.1 million2,000).
Adjusted operating loss of £2.8 million (£3.6 million after share benefit charges) Operating activities yielded a loss of £2.8 million mainly due to marketing and operating costs for the exchange betting business in QI-QIII. The betting exchange operating activities for 2005 yielded a loss of £2.33.0 million. The cost of running the exchange betting business has been reduced considerably with the intention to reduce it further. The total operating loss of £3.6 million includes the non-cash share benefit charges in the amount of £0.8 million due to the application of IFRS2 (Share-based Payment).
Healthy cash position at year end of £7.3 million Betbull maintains a healthy cash position going forward to 2006, enabling the company to continue its dual strategy of growing its retail business while aggressively seeking out complementary acquisitions.
Betbull Group Results for QIV 2005 (unaudited)
Net gaming revenue of £2.6 million The group net gaming revenue for QIV 2005 amounted to £2.6 million up from £0.1 million for QI-QIII 2005 cumulative.
Operating loss of £0.1 million Group operating loss for the same period yielded a significant reduction in loss down toof £0.1 million compared to a loss of £2.4 million for QI-QIII cumulative. The business focus and acquisition has resulted in a move towards a break even point. The Directors duly expect QI 2006 to outperform their budget expectations and show further growth.
QIV figures are stated before any share benefit charges.
Leip Group Results for the year ended 2005 above expectations (only QIV contained in Betbull Group Results for the year 2005) The Leip Group outperformed expectations in 2005, and has increased the number of shops in its network, continuing this expansion into 2006, with new shops opening month on month.
Issue of warrants and share options In 2005, as part of its strategy to lower overheads, certain directors and employees were awarded warrants and share options (under a company employee share option scheme). In 2004 Erste Banbk were also granted options as part of the compensation package as lead arranger and book runner for the IPO of Betbull in October 2004, and corresponding to 5% of the then placed volume. These had no cash impact on the group, but under IFRS 2 this results in a charge of £0.8 million for the year.
Business highlights: Strategic Repositioning successfully completed Acquisition of the Leip Group of companies: a major German retail betting group and subsequent increase in size of business Betbull acquired the Leip group of companies, including a major German retail betting operation taking bets from 84 outlets, effective from 1 October 2005. The labels include Wettenleip, Penalty, and Primebet.com. The rationale for the transaction was to leverage existing know how and resources in a move to capitalise on the emerging retail betting opportunities across Continental Europe, in particular, in Germany. The acquisition is the starting point in Betbull's strategy to build a leading Continental European retail betting group. The Directors believe that Betbull, now including the Leip group of companies, has the expertise, personnel, outlets and licenses to quickly grow in the German retail betting market and realise opportunities in other Continental European countries.
The Leip group of companies was purchased for an aggregate initial consideration of E10 million in cash and the issue of 700,000 ordinary shares. A deferred consideration of up to a further E7.5 million and 300,000 ordinary shares is payable subject to the achievement of hurdle levels of EBITDA and gross profit by the businesses acquired for each of the calendar years up to 31 December 2010. A deferred consideration payable in respect of the year ended 31 December 2005 shall be satisfied by the issue of 300,000 Ordinary Shares to the sSellers which will be carried out following the filing of the annual report. In respect of each subsequent year the deferred consideration payable will be capped at E1.5 million payable in cash.
Alexander Leip, previous owner of the Leip group of companies, will continue to manage German retail betting operations and became an executive director of Betbull upon closing the acquisition.
The Leip Group has increased the number of shops in its network from 84 (as of end of QIII 2005) to 100 (as of end of QI 2006) fuelled by the injection of growth capital and the formation of a team dedicated to growing the installed base. In particular, the number of directly owned shops was considerably increased.
Subsequent private placing to fund the transaction Betbull raised in the course of a private placing, in connection with the acquisition of the Leip group of companies, a net amount of E11.5 million through the issue of 1,916,667 new ordinary shares, mainly to institutional and strategic investors.
Relaunch of the exchange betting websites Betbull relaunched the websites www.betbull.com and www.betbull.de on a new platform, provided by the Global Betting Exchange. The rationale for the relaunch was to enhance liquidity and functionality of the existing offering and to lower operating cost. Both goals were achieved.
Completion of a corporate restructuring programme Betbull completed a corporate restructuring and cost cutting program reflecting the new organisational requirements arising out of the relaunch of the websites, the goal to lower operating cost for the websites significantly, and the acquisition of the Leip group of companies. Operating staff are now largely concentrated in Frankfurt and Malta, with minor presences in Gibraltar and London. Betbull's license base currently covers licenses in Malta, the United Kingdom, and Germany.
Strategy Betbull's mission is to become a Continental European household name in retail gaming, with a complementary online offering. This mission is driven by the Directors' belief that gaming will move out of its current niches and become a regulated and thriving market in major Continental European countries. It is Betbull's strategy to grow the retail betting business through new outlets, additional products in existing outlets, and to enhance the existing complementary internet and telephone betting offering.
Betbull intends to maintain a position in the German leading group, by substantially growing its presence organically and through targeted acquisitions. Other Continental European countries are targeted with tactics reflecting their state of regulation, market potential, and available acquisition targets or local partners. Spain is one of those countries and the Directors have resolved to establish a presence there. The Directors believe that the highest value is being created by operating proprietary betting shops as opposed to other models, including pure agent based or franchise models. However, this does not exclude the application of these models where regulatory or competitive circumstances make them favourable.
Apart from growing the operational base Betbull's strategy also includes the introduction of additional new products and systems aimed at capturing additional profit contributions from existing customers as well as winning new customers while maintaining stable outlet operating cost.
Finally, the current complementary internet and telephone offering under www.primebet.com will be gradually enhanced to capture additional value from the retail customers. The betting exchange business will be run at a reduced cost base and reviewed regularly.
Outlook Like for like comparisons (unaudited) of the group for QI of 2006 are substantially ahead of results for the same quarter in the prior year. February has seen the highest historic group net gaming revenue.
Directors Manfred Bodner stepped down as a non-executive Director on 21 December 2005. With the acquisition of the Leip Group complete Mr. Bodner felt the company well positioned beyond its start up phase and plans to focus on other challenges. The board is very grateful to Mr. Bodner for his outstanding contributions and counsel since the start of the company and wishes him all the best in the future.
*** ENDS ***
Press Contact Alex Mackey, Catullus Consulting (+44 7773 787 458) Catriona MacNiven, Investor Relations Günter Schmid, CEO (upon request) Simon Bold, COO (upon request)
Phone +350 77331 Fax +350 44554 betbull - The European Betting Exchange Plc ("betbull") 1 London Wall London EC2Y5EB
This communication can be downloaded from the website www.betbullplc.com.
About betbull Betbull has the goal to establish itself as one of the leading Continental European retail betting players.
The high caliber management team (Simon Bold, Alexander Leip, and Günter Schmid) can resort not only to state of the art bookmaking and operating know how but also relevant M&A expertise and track record.
Betbull was started in 2004 as a joint venture of betandwin.com Interactive Entertainment AG (stock quoted on the Viennese stock exchange) and Fun Technologies Plc (formerly traded as CES-Software Plc, stock quoted on the Alternative Investment Market in London) and is stock quoted since October 2004 on the Viennese stock exchange ("BETB", "BETB.VI").
For further details please refer to the company website www.betbullplc.com.
This communication contains statements about the future (prognoses). Those statements are based on the Director's opinion, assumptions made by the Directors, and information available to the Directors. One or several factors that the Directors cannot foresee with certainty could result in outcomes and events that deviate from the prognoses. All prognoses are valid only on the date of their announcement. Betbull has no intentions to and is not obliged to update prognoses or to adapt prognoses to future events or developments.
@@start.t4@@end of announcement euro adhoc 31.03.2006 23:32:53
ots Originaltext: betbull - The European Betting Exchange Plc.
Im Internet recherchierbar: http://www.presseportal.de
Further inquiry note:
betbull - The European Betting Exchange Plc.
Tel.: +350 77331
Branche: Casinos & Gambling
Börsen: Wiener Börse AG / stock market