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euro adhoc: Betbull plc
Betbull with Continued Growth
in QIII/2006 and Repositioning as European Retail Betting Player completed
@@start.t1@@-------------------------------------------------------------------------------- Ad hoc-Mitteilung übermittelt durch euro adhoc. Für den Inhalt ist der Emittent verantwortlich. --------------------------------------------------------------------------------@@end@@
Betbull with Continued Growth in QIII/2006 and Repositioning as European Retail Betting Player completed (Release of Betbulls QIII/2006 Unaudited Results and In Depth Update on Group Strategy) Highlights of this Release
@@start.t2@@- Betbull with continued growth during the 9 months to 30th September
2006, recording a Turnover of EUR 63.80 m and Net Gaming Revenue of EUR 10.80 m
(unaudited figures). A healthy cash position of EUR 7.30 m was maintained
(unaudited figure) with positive free cash flow attained in QIII.
- Repositioning as a retail betting operator successfully completed.
Online offerings to support retail business now only of minor importance.
- Expansion into Spain successfully commenced. Joint Venture agreement
with leading leisure and gaming group Orenes successfully completed. Licence
application for retail betting units in Italy launched
- Legal situation in Germany still opaque and posing substantial risks to
sports betting units there. Italian betting market liberalized and Spain on its
- Fund raising being evaluated to finance the further development of
Spanish and Italian opportunities.
1. Unaudited Figures QI-QIII 2006
Betbull achieved a record Turnover of EUR 63.80 m yielding a Net Gaming Revenue
(after commissions) of EUR 10.80 m in the period QI-QIII 2006. Turnover is up
by 60% and Net Gaming Revenue up by 83% compared to the same period in 2005.
Overall Betbull produced an EBITDA of EUR (0.58) m and made a loss after tax of
EUR 1.81 m. This includes EUR 0.33 m options and warrant related charges.
While the German retail betting business is producing a positive EBITDA the
groups losses are mainly a result of start-up costs in Spain, restructuring
costs in Gibraltar, legal and tax advisory costs as well as costs of business
development in other European countries. The online offerings together are
breaking even on an EBITDA-level.@@end@@
Free Cash Flow in the period QI-QIII was EUR (1.55) m leaving Betbull with a healthy Cash Position of EUR 7.30 m as of end of QIII. Overall, Betbull produced EUR 0.17 m Free Cash Flow in QIII.
Octobers Turnover of EUR 10.76 m is one of the highest monthly turnovers achieved to date and underlines the potential in European retail betting markets, even under difficult regulatory circumstances.
3. Update on Betbull Company Strategy
Betbull has successfully completed its repositioning from a pure online gaming operator to a retail betting operator with a complementary online offering. 88 % of Turnover and 96 % of Net Gaming Revenue was produced by the companys retail betting outlets.
Also, Betbull expects its future growth to come predominantly from retail betting. The online offerings www.betbull.com, www.betbull.de and www.primebet.com as well as telephone betting will be maintained as complementary offerings to retail customers
Betbulls objective is to establish itself as a leading pan-European retail betting player. The Directors believe that a pan-European scale has the following advantages: Firstly, a pan-European offering would facilitate the development of the brand due to pan-European attention for leagues, tournaments, and events. Secondly, the existing infrastructure for bookmaking and risk management as well as the groups online and telephone offering would be more effectively utilised if fed by business across Europe. Thirdly, a pan-European offering would lead to a better balance of books and would steady the trading margins as a result of increasing volumes and a more diverse mix of bets. Finally, it would allow a wider product offering at higher marginal profit contributions.
Betbulls business is currently based on bookmaking licences in the UK, Austria, Malta, Germany (Federal States; horses only), and Spain (Andalucia; horses only).
Betbull has designed its systems and technology for a roll out throughout Europe. Retail and backend systems have been developed to support regional differences whilst risk management remains centralised across all platforms in real time. Retail "Live Betting" has been successfully launched and integrated into EPOS (Electronic Point Of Sale) and screen systems.
Betbull follows the operator business model successfully proven for decades in the UK as opposed to a franchise business model. In the Directors view the locations constitute the value as licences, customer base and control are tied into them. While franchise models have shown to be successful in consumer retail they are difficult to apply to financial services due to difficulties and risks associated with non-compliant franchisees. However, this does not preclude Betbull from working with agents where it makes sense due to the regulatory or competitive situation.
Betbulls current geographical coverage currently includes Germany and Spain with plans to move into Italy in 2007.
In Germany the group owns and operates 47 shops and accepts bets from 27 free agents. This includes licenced horse racing shops as well as sports betting agencies. The shops are predominantly located in Hessen and Nordrhein-Westphalen.
In Andalucia, Spain, the group owns and operates two outlets (recently opened) with further outlets in the pipeline. These units provide a key indicator of trading requirements and expectancies for the larger scale roll out of retail betting outlets across the autonomous communities of Spain as liberalization unfolds, giving Betbull an important lead in the race for supremacy in this exciting new market.
The first shops out of the Joint Venture Agreement signed with Orenes are expected to be opened in the autonomous community of Madrid, whose new licencing laws are expected to be announced by 30th November 2006.
Orenes is a leading Spanish leisure and gaming operator with excellent political standing and a highly respected institution. It has the scale and skills to rapidly develop a retail betting operation across Spain together with Betbull as liberalization occurs. Orenes has post tax earnings for the year 2005 of approximately EUR 50 m.
In Italy Betbull, through a subsidiary, has bid for four licences in Milan and Como. In the Directors view this provides an excellent market entry point for Betbull while the company is in the process of identifying suitable retail or leisure partners.
Other regulated European countries are also being searched for opportunities and potential partners or acquisition targets.
4. Update on regulatory and legal situation in German, Spain,
The legal situation in Germany remains opaque. Betbull has already reported in depth about the German Constitutional Court ruling on sports betting and the EU-treaty violation proceedings against Germany for its incoherent approach to gaming in general. Nevertheless the Prime Ministers of the German Federal States have opted for keeping the monopoly and have aggressively attacked sports betting operators and agents. In their next general meeting scheduled for 13 December 2006, they intend to agree on a state lotteries treaty ("Lotteriestaatsvertrag") which would reinforce the state monopoly and would provide for a prohibition of all private operators. In order for the state treaty to become law, it would have to be ratified by the parliaments of the German Federal States ("Bundesländer") by the end of 2007.
Meanwhile the German Anti-Trust Authority ("Bundeskartellamt") has declared the co-operation of the German State-Lotteries a violation of German and European anti-trust regulation and jurisdiction. This ruling was upheld by a court. The recent concerted move of most of the State-Lotteries to shut down their online-offerings has been interpreted by the Anti-Trust Autority as a violation of their ruling. According to legal experts and advisors of Betbull this could grind the legislative process, that would also cover sports betting, to a halt.
So far there have been various and even contradictory rulings from lower and higher administrative courts with regards to immediate closure of sports betting shops. These cases hinge on the precedent of European law (freedom of services) over German law. All sports betting outlets in Germany, including Betbulls, could be affected. Experts estimate that 1/3 of the sport betting shops in Germany have been closed already. Overall, eleven of Betbull`s sport betting shops (predominately in the Federal States of Nordrhein-Westphalen and Bayern) have been closed.
Further clarification of the situation is expected from the Placanica ruling of the European Court of Justice due within months. The attorney general suggested to stop penalization of agents of EU-bookmakers and to recognize the validity of licences issued within one EU-member state, in all other EU-member states.
In Spain plans to regulate and liberalize the sportsbetting market are already revealed in the autonomous communities of Madrid, Catalunia, and El Pais Basco. The regulatory approaches will be implemented on a regional basis. A nationwide policy on gaming is not expected.
Betbull and Orenes are committed by reason of their Joint Venture Agreement to apply for licences throughout Spain, where legislation allows.
In Italy a tender of sport betting and horse race betting licences following § 38 of the "Decreto Bersani" has been conducted.
Subject to formal confirmation of award of licences, Betbull intends to open flagship retail sports betting outlets with complimentary horse betting facilities in Milan and Como, giving the company a valuable insight into the Italian retail betting market offering the possibility for further rapid expansion.
@@start.t3@@5. Capital increase and issue of new shares
Betbull has sent out notice of an Extraordinary General Meeting to be held on 15
December. A resolution will be proposed at this meeting to authorise the Board
of Directors to issue up to 2,000,000 new shares on a non-pre-emptive basis.
This power will provide the Directors with the flexibility to raise finance to
pursue new opportunities. The Directors are currently considering effecting a
placing of up to 1,000,000 new shares in order to further develop the Spanish
and Italian businesses.
Consolidated Profit and Loss account
For the nine months ended 30 September 2006
(9 months) 2006
Net Gaming Revenue 10,808,332 7,009,573
Operating expenses (2,986,282) (1,905,192)
Administrative expenses (9,276,032) (6,425,745)
Other income - tax refund
Interest receivable (1,453,982) (1,321,364)
Interest payable (3,649) (1,887)
LOSS BEFORE TAX (1,216,327) (1,276,555)
Taxation (592,281) (366,211)
LOSS AFTER TAX FOR THE PERIOD (1,808,608) (1,642,766)
Consolidated Balance Sheet As at 30 September 2006
@@start.t4@@30 September 2006
30 June 2006
EUR EUR EUR EUR
Property, plant and equipment 2,373,784 2,410,658
Goodwill 21,221,625 21,221,625
Investments 23,400 23,400
Deferred tax assets 57,826 57,826
Inventories 60,646 80,501
Trade and other receivables 4,033,148 3,472,642
Cash and cash equivalents 7,335,090 8,093,045
Total assets 35,105,519 35,359,697
Trade and other payables 6,275,389 6,775,284
Corporation tax payable 845,075 735,476
Total current liabilities 7,120,464
Financial liabilities 3,923,644 3,923,644
Total non-current liabilities 3,923,644
Total liabilities 11,044,106 11,434,402
TOTAL NET ASSETS 24,061,413 23,925,295
Equity attributable to equity holders of the company
Share capital 532,317 530,303
Share premium 27,865,233 27,759,811
Merger reserve 2,982,615 2,971,331
Retained earnings (9,000,339)
Share benefit reserve
Cumulative translation reserve 177,260 177,260
TOTAL EQUITY 24,061,413 23,925,295@@end@@
ENDS - Contact David De Marco, Group Finance Director
Phone +356 21480131 Fax +356 21480132
Please note the new address:
Betbull Plc 25 Old Broad Street Tower 42, Level 23/Pillsbury London EC2N 1HQ United Kingdom
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 Betbull group members hold bookmaking licences in the UK, Austria, Malta and horse betting licences in select districts of Germany and Spain.
The high caliber management team (Simon Bold, David De Marco, 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 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.
Disclaimer This communication contains statements about the future (prognoses). Those statements are based on the Directorss 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.t5@@Ende der Mitteilung euro adhoc 30.11.2006 18:00:00
ots Originaltext: betbull - The European Betting Exchange Plc.
Im Internet recherchierbar: http://www.presseportal.ch
Tel.: +350 77331
Börsen: Wiener Börse AG / Börse