REG - Veltyco Group PLC - Interim Results <Origin Href="QuoteRef">VLTY.L</Origin>

B90 HoldingsAnnouncement

18/09/2017 07:37

RNS Number : 9574Q
Veltyco Group PLC
18 September 2017
18 September 2017
VELTYCO GROUP PLC
("Veltyco" or "the Group" or "the Company")

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2017
Veltyco, the online marketing company for the gaming industry, announces its unaudited interim results for the six months ended 30 June 2017.
Financial highlights
 Revenues increased by 202% to 6,355,573 (H1 2016: 2,102,558) exceeding the full year 2016 revenues of 6,082,468
 EBITDA for the first six months increased 410% to 3,801,354 (H1 2016: 744,129) and an increase of 80% compared to the operating EBITDA for the full year 2016 (2,107,975)
 Net profit amounted to 3,601,996 (H1 2016: loss of 1,123,289) 
 Basic earnings per share 5.14 cents per share (H1 2016: 2.57 cents loss per share)
 Net cash balances 1,320,692 (31 December 2016: 144,125)
 Given the strong trading performance of the business, the Board will consider paying a dividend in 2018 based on the final results for 2017
Operational highlights
 Successfully completed 51% acquisition of the Bet90 online operations 
 Successfully completed 51% acquisition of the Tippen4you.com operations 
 Ilan Tzorya joined the Board of Directors in January 2017, with huge experience in the options trading industry
 Raised 2,556,000 before expenses in April 2017 to satisfy the cash consideration of the two acquisitions
 Current trading continues to be strong which should enable the Group to report performance ahead of current market expectations
Commenting on the results, David Mathewson, Chairman, said:
"It has been an exciting first half year of 2017 for the Group and we are very happy to see such a strong trading performance during this period, which produced very good results for the period reported." 
"Trading in the third quarter of 2017 continues to be strong and we now expect the business will exceed current market expectations for the full year."
"The Directors are currently focusing on the roll-out of the new Bet90 operations and continue to review potential acquisition opportunities which fit into the Company's profile."
For further information please contact:
Veltyco
+44 (0)16 2460 5764
David Mathewson, Chairman
Marcel Noordeloos, CFO
Northland Capital Partners Ltd
+44 (0)20 3861 6625
Tom Price
Edward Hutton
IFC Advisory (Financial PR) 
+44 (0)203 053 8671
Graham Herring
Tim Metcalfe
Miles Nolan 
About Veltyco
Veltyco is a group of companies primarily focused on generating marketing leads and entering into marketing contracts for the activities of various partners in the gaming industry. Veltyco focuses on complementary activities under one umbrella, leveraging its historical cash generative activities of marketing online casinos and sports betting.
This announcement contains inside information.
CHAIRMAN'S STATEMENT
I am pleased to present the unaudited interim results for the six months ended 30 June 2017, which consolidates the results of Veltyco Group plc ("Veltyco") and its subsidiaries and associates.

Business review
Financial review
Throughout the first six months of 2017 the Group has continued to focus on the marketing of the existing brands. During 2016, the Company expanded its focus from marketing and player acquisition of casino and sportsbook only to other fields of operations, with lottery and option trading providers. We have previously reported a strong increase in revenue and operating profit during the second half of 2016 already and this has continued during the first six months of 2017, across all business verticals.
Revenue for the first six months of 2017 amounted to 6,355,573 (H1 2016: 2,102,558) which represents an increase of over 200%. This exceeded the full year revenue for 2016, which amounted to 6,082,468.
Net profit for the first six months of 2017 was 3,601,996 (H1 2016: loss of 1,123,289) and the EBITDA for the first six months of 2017 amounted to 3,801,354, compared to 744,129 in the first six months of 2016, which represents a significant increase of 410%.
On 13 April 2017, the Company announced that it had raised 2.55 million (before expenses) on a private basis with a small number of investors via the issue of 5,604,551 new ordinary shares of no par value. The proceeds of this fundraise were used to satisfy the cash consideration of two completed acquisitions: a) the acquisition of 51% of the entire issued share capital of Quasar Holdings Ltd, which holds 100% in Bet90 Sports Ltd, holder of the Bet90 brand, and b) 51% of the entire issued share capital of T4U Marketing Ltd for a total consideration of 510,000, with an option to acquire the remaining 49% of the share capital within 12 months after completion of the transaction.
Due to their timing, the impact of these two acquisitions on the results for the first six months of 2017 is not material. The T4U Marketing operations have now been integrated into the Veltyco operations.The Bet90 transaction completed on 28 June 2017 and the website went live on 28 July 2017.
Outlook
The Board is pleased to confirm that trading during the third quarter of 2017 has continued to be strong, exceeding current market expectations. Furthermore, the Bet90 operations add a new stream of income to the Company's operations.Bet90's online platform runs on the SBTech sportsbook.The Bet90 website is expected to deliver a contribution in the financial year ending 31 December 2018 and the Board is focusing on expanding these operations rapidly.
Given current levels of business, the Board expects the results for the year ending 31 December 2017 to be ahead of the current market expectations.
Dividend 
Given the strong trading performance of the business, the Board will consider paying a dividend in 2018 based on the final results for 2017. 

David Mathewson
Chairman
18 September 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited
Unaudited
Audited
period ended
period ended
Year ended
30 June
30 June
31 December 
2017
2016
2016
Note
Revenues
 6,355,573 
 2,102,558 
 6,082,468 
Salary expense
 (367,176)
 (278,888)
 (608,825)
Marketing and selling expense
(1,770,023)
 (798,484)
 (2,682,422)
General administrative expense
 (417,020)
 (281,057)
 (683,246)
Listing expenses
 - 
 - 
 (123,850)
Depreciation, amortisation and impairment expense
 (147,299)
 (272,768)
 (362,179)
Total administrative expenses
 (2,701,518)
 (1,631,197)
 (4,460,522)
Operating profit
 3,654,055 
 471,361 
 1,621,946 
Reverse asset acquisition expense
 - 
 (1,555,898)
 (1,555,898)
Financial income/(expense)
 40,291 
 (38,752)
 (9,286)
Profit before tax
 3,694,346 
 (1,123,289)
 56,762 
Taxation
 (92,350)
 - 
 (36,144)
Profit/(loss) for the financial period
 3,601,996 
 (1,123,289)
 20,618 
Earnings per share
- Basic (in )
- Diluted (in )
2
2
0.0514
0.0478 
(0.0257)
(0.0257)
0.0004
0.0004 
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
Unaudited
Audited
30 June
30 June
31 December
2017
2016
2016
Note
Non-current assets
Property, plant and equipment
 3,344 
 4,971 
 4,158 
Intangible assets
3
 5,104,260 
 23,235 
 2,740,792 
Loans receivable
 916,197 
 930,207 
 916,197 
Total non-current assets
 6,023,801 
 958,413 
 3,661,147 
Current assets
Cash and cash equivalents
 1,320,692 
 498,763 
 144,125 
Loans receivable
 1,627,034 
 1,604,726 
 1,590,883 
Trade and other receivables
 4,776,969 
 951,696 
 2,602,338 
Total current assets
 7,724,695 
 3,055,185 
 4,337,346 
Total assets
 13,748,496 
 4,013,598 
 7,998,493 
Equity and liabilities
Share Capital
 -
 -
-
Additional paid-in capital
3
 13,170,817 
 7,527,090 
10,614,354 
Reverse asset acquisition reserve
(6,046,908)
(6,046,908)
(6,046,908)
Retained earnings
 6,000,347 
 1,201,823 
 2,376,540 
Equity attributable to owners of the parent
 13,124,256 
 2,682,005 
 6,943,986 
Non-controlling interests
 9,103 
 - 
 - 
Total shareholders' equity
 13,133,359 
 2,682,005 
 6,943,986 
Non-current liabilities
Borrowings
 26,730 
 147,795 
 26,358 
Total non-current liabilities
 26,730 
 147,795 
 26,358 
Current Liabilities
Trade and other payables
 588,407 
 1,183,798 
 1,028,149 
Total current liabilities
 588,407 
 1,183,798 
 1,028,149 
Total equity and liabilities
 13,748,496 
 4,013,598 
 7,998,493 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Additional
Other reserves -
Share
paid in
Reverse asset
Retained 
capital
capital
acquisition reserve
earnings
Total
Balance as at 1 January 2016 (restated)
 - 
 6,046,980 
 (6,046,908)
 2,304,891 
 2,304,963 
Profit for the financial period
 - 
 - 
 - 
 (1,123,288)
 (1,123,288)
Share based acquisition
 - 
-
 - 
 - 
 - 
Share based payments
 - 
 90,909 
 - 
 20,220 
 111,129 
Issue of share capital
 - 
 1,389,201 
 - 
 - 
 1,389,201 
Balance as at 30 June 2016
 - 
 7,527,090 
 (6,046,908)
 1,201,823 
 2,682,005 
Balance as at 1 January 2016 (restated)
 - 
 6,046,980 
 (6,046,908)
 2,304,891 
 2,304,963 
Profit for the financial period
 - 
 - 
 - 
 20,618 
 20,618 
Share based acquisition
 - 
 2,801,592 
 - 
 - 
 2,801,592 
Share based payments
 - 
 90,909 
 - 
 51,031 
 141,940 
Issue of share capital
 - 
 1,674,873 
 - 
 - 
 1,674,873 
Balance as at 31 December 2016
 - 
 10,614,354 
 (6,046,908)
 2,376,540 
 6,943,986 
Profit for the financial period
 - 
 - 
 - 
 3,601,996 
 3,601,996 
Share based payments
 - 
-
 - 
 21,811 
 21,811 
Issue of share capital
 - 
 2,556,463 
 - 
 - 
 2,556,463 
Balance as at 30 June 2017
 - 
 13,170,817 
 (6,046,908)
6,000,347
 13,124,256 
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited
Unaudited
Audited
30 June
30 June
31 December
2017
2016
2016
Cash flows from operating activities
Operating profit
 3,654,055 
 471,361 
 1,621,946 
Adjustments for:
Share based payments
 21,811 
 30,303 
 53,016 
Depreciation
 812 
 - 
 813 
Amortisation of intangibles
 146,487 
 2,321 
 86,356 
Impairment
 - 
 270,447 
 275,011 
Cash flow from operations before working capital changes
 3,823,165 
 774,432 
 2,037,142 
(Increase) in trade and other receivables
 (2,210,780)
 (378,481)
 (1,761,112)
(Decrease) in trade and other payables
 (531,720)
 (58,223)
 (307,415)
Cash flow from operations
 1,080,665 
 337,728 
 (31,385)
Tax paid
- 
 - 
 (50,144)
Cash flow from operating activities 
 1,080,665 
 337,728 
 (81,529)
Cash flow from investing activities
Acquisitions of subsidiairies
(2,500,852)
-
-
Acquisitions of intangible assets
 -
 (270,447)
 (275,011)
Loans granted
 - 
 (29,743)
 (767,701)
Loans repayments received
 - 
 - 
 497,800 
Interest received
 40,291 
 42,073 
 80,388 
Cash acquired on reverse asset acquisition
- 
 2,112 
2,112 
Net cash outflow from investing activities
 (2,460,561)
 (256,005)
 (462,412)
Cash flow from financing activities
Proceeds of issue of new shares
 2,556,463 
 410,606 
 646,278 
Repayment of borrowings
 - 
 (35,354)
 - 
Net cash inflow from financing activities 
 2,556,463 
 375,252 
 646,278 
Net increase in cash and cash equivalents
 1,176,567 
 456,975 
 102,337 
Cash and cash equivalents at start of period
 144,125 
 41,788 
 41,788 
Cash and cash equivalents at end of period
 1,320,692 
 498,763 
 144,125 
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2017
1  Basis of preparation
The interim consolidated financial statements incorporate the results of Veltyco Group plc (the "Company") and entities controlled by the Company (its subsidiaries) (collectively the "Group").
The interim consolidated financial statements are unaudited, do not constitute statutory accounts and were approved by the Board of directors on 18 September 2017.
The preparation of interim consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing the interim consolidated financial statements, the significant 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 December 2016.
The interim financial information in this report has been prepared using accounting policies consistent with IFRS as adopted by the European Union. IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee and there is an ongoing process of review and endorsement by the European Commission. These policies are consistent with those to be adopted in the Group's consolidated financial statements for the year ended 31 December 2017. The accounting policies applied by the Group in this interim report are the same as those applied by the Group in the consolidated financial statements for the year ended 31 December 2016.
The principal risks and uncertainties of the Group have not changed since the last annual financial statements where a detailed explanation of such risks and uncertainties can be found.
2 Earnings per share
The calculation of earnings per share is based on the following earnings and number of shares.
6 months ended 30 June 2017
6 months ended
30 June 2016
Year ended
31 December 2016
Profit/(loss) for the purposes of basic loss per share being net profit/(loss) after tax attributable to equity
3,601,996
 (1,123,289)
20,618
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share
70,023,762
43,753,775
53,116,500
Weighted average number of dilutive share options
5,344,020
260,000
2,802,010
Weighted average number of ordinary shares for the purposes of diluted earnings per share
75,367,782
44,013,775
55,918,510
 Basic earnings per share (in  )
0.0514
(0.0257)
0.0004
 Diluted earnings per share (in  )
0.0478
(0.0257)
0.0004

Basic profit/(loss) per share has been calculated by dividing the net results attributable to ordinary shareholders by the weighted average number of shares in issue during the period adjusted for the exchange ratio in the reverse asset acquisition. This exchange ratio has also been applied to the weighted average number of dilutive share options for the purposes of calculating diluted earnings per share.
3 Significant events during the reporting period
On 13 April 2017 the Company announced that it had raised 2.55 million (before expenses) on a private basis with a small number of investors via the issue of 5,604,551 new ordinary shares of no par value ("Ordinary Shares") (the "Subscription") to new and existing investors. The new Ordinary Shares were issued at 39 pence per new Ordinary Share, representing 8.3% of the Company's existing share capital at that time and 7.7% of its enlarged share capital. 
The Subscription was undertaken in order to satisfy the cash consideration for two acquisitions: 
1) the acquisition of 51% of the entire issued share capital of Quasar Holdings Limited for a total consideration of 2 million (completed on 28 June 2017), and;
2) the acquisition of 51% of the entire issued share capital of T4U Marketing Ltd for a total consideration of 510,000 with an option to acquire the remaining 49% of the share capital (completed on 13 April 2017).
As per IFRS 3, Business Combinations, the Directors are determining the fair value accounting for these acquisitions. To value these acquisitions, the Directors have contacted an external valuation expert to determine these fair values. At the time of preparation of this report, this valuation was not yet completed. Therefore balances reported may change in the 2017 full year report. 
On 16 January 2017, Mr Ilan Tzorya joined the Board of Directors of the Group.
4 Subsequent events
On 5 July 2017, after the Company's AGM, the Company announced that options over 300,000 ordinary shares of no par value (Ordinary Shares") were granted under the Company's Long Term Incentive Plan May 2016 (as amended) to each of David Mathewson, Marcel Noordeloos, Hans Dahlgren and Mark Rosman with an exercise price of 65p per share, being the closing bid price of the Ordinary Shares the day before the grant. The total of 1,200,000 options vest in equal instalments over 4 years commencing the expiry of one year from the date of grant. Any unexercised options lapse on the fifth anniversary of the date of grant.
On 21 July 2017, the Company announced that it had received an exercise notice for the exercise of 733,521 warrants over ordinary shares of no par value in the capital of the Company ("Ordinary Shares"), which were granted on 30 June 2016, at an exercise price of 31p per share.
Furthermore, the Company issued 191,827 new ordinary shares of no par value in the Company to a creditor that preferred shares over cash at a price of 75p to satisfy an invoice for services of 143,870. Following these share issuances a total of 74,156,159 Ordinary Shares are in issue.
A copy of the Company's unaudited interim results for the six months to 30 June 2017 are available on the Company's website at www.veltyco.com.

This information is provided by RNS
The company news service from the London Stock Exchange
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