REG - Webis Holdings PLC - Interim Report and Financial Statements
24/02/2023 07:00
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RNS Number : 9139Q Webis Holdings PLC 24 February 2023
For immediate release
24 February 2023
Webis Holdings plc
("Webis" or "the Group")
Interim Report and Financial Statements for the period ended 30 November 2022
Webis Holdings plc, the global gaming group, today announces its unaudited
Interim Report and Accounts for the period ended 30 November 2022.
Denham Eke, Non-executive Chairman stated:
"Our principal subsidiary, WatchandWager.com ("WatchandWager"), had a mixed
start to the first six months of the financial year. Trading was strong during
the summer months, where we enjoyed excellent commission levels from Saratoga
(NY) and Del Mar (CA). On a less positive note, trading was difficult during
the months of September, October, and November. Group amounts wagered were US$
38.2 million, turnover was US$ 6.23 million, resulting in a loss on the period
of US$ 0.33 million, largely due to the exceptionally adverse weather
conditions. I remain extremely confident as we approach the spring months that
trading will improve in line with expectations, especially as we roll out our
new Business to Customer marketing strategy".
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance
with the Company's obligations under Article 17 of MAR.
For further information:
Webis Holdings plc Beaumont Cornish Limited
Denham Eke Roland Cornish/James Biddle
Tel: 01624 639396 Tel: 020 7628 339
Group at a Glance
Webis Holdings plc (the "Company") and its subsidiary companies (together the
"Group") operates two primary segments: -
WatchandWager.com Ltd and WatchandWager.com LLC - Advanced Deposit Wagering
("ADW")
WatchandWager.com LLC - Cal Expo Harness Racetrack
WatchandWager.com Ltd is regulated in the Isle of Man and operates a
totalisator wagering hub through its United States Tote supplier, which
enables it to conduct its ADW business by passing wagers directly into global
racetrack betting pools in real time.
WatchandWager.com LLC has its operational base in Lexington, Kentucky, with
its head office in Larkspur, California, and provides pari-mutuel wagering, or
pool-betting, services through a number of distribution channels to a global
client base. The company holds United States pari-mutuel licences for its ADW
business in the USA, including a multi-jurisdictional licence issued by the
States of North Dakota, and individual licences for the States of California,
Maryland, Colorado, Minnesota, New York, Washington, and Kentucky. The
business provides wagering opportunities predominantly on horse racing and is
contracted with a significant number of prestigious racetrack partners within
the United States, namely Churchill Downs Inc, Monarch Content Management, the
New York Racing Association, Penn Gaming and all other major track operators
in the USA. Internationally, the company has contracts with Hong Kong, France,
Canada, United Kingdom, Ireland, Australia, and South Africa amongst many
others. The service provides wagering facilities to customers through its
interactive website, watchandwager.com, as well as offering a
business-to-business wagering product.
WatchandWager.com LLC also operates Cal Expo Harness Racetrack in Sacramento,
California, under a licence issued by the California Horse Racing Board. This
'bricks and mortar' presence in the largest State economy in the USA continues
to provide leverage for our related global pari-mutuel operations. The current
lease at Cal Expo extends to 2030.
As part of the requirements for the Isle of Man licence, client funds for the
Isle of Man licensed companies are held in fully protected segregated client
accounts within an Isle of Man regulated bank.
Chairman's Statement
Introduction
Our principal subsidiary, WatchandWager.com ("WatchandWager"), has had a mixed
start to the first six months of the year. Trading was strong during the
summer months, where we enjoyed excellent commission levels from Saratoga (NY)
and Del Mar (CA). In addition, we received better than expected "dark money"
commissions (being statutory revenues from wagers placed by Californian
residents on global content) from our licensed racetrack at Cal Expo. During
the period when we were not physically racing, under California Horse Racing
Board rules, we are entitled to a percentage of revenues derived from
Californian residents. On a less positive note, trading was difficult during
the months of September, October, and November. These conditions continued
into the winter, principally due to unprecedented severe weather conditions
leading to a lack of content, experienced both by us and by many of our global
racetrack partners.
Nevertheless, we remain optimistic about the future of the operation.
Following a number of test marketing campaigns, we are particularly encouraged
by the growth in our B2C division, where we are experiencing a consistent
increase in the prior years' levels of wagers placed. This has been helped by
our recently signed contract with Monarch Content Management, as previously
announced, with more detail below. As a result, we have developed a new
marketing strategy which we will implement in the second quarter of this year,
following which we expect trading to improve significantly in the spring and
summer of 2023.
Half Year Results Review
Group amounts wagered were US$ 38.2 million, down 4% on prior year (2021: US$
39.9 million). Turnover reported was US$ 6.23 million (2021: US$ 6.80
million), with gross profit achieved of US$ 1.99 million (2021: US$ 2.18
million). This resulted in a loss on the period of US$ 0.33 million (2021:
loss of US$ 0.07 million).
Operating costs showed a small increase to US$ 2.31 million (2021: US$ 2.22
million), arising from a general increase in cost of living. Cash and cash
equivalents stand at US$ 2.80 million (31 May 2022: US$ 3.06 million).
Operations Update
Business-to-Consumer (B2C)
This division performed well over the period and continues to do so. Most
importantly, it now contributes the majority (75% over the period) of our
gross margin as compared to the Business-to-Business division.
We have experimented with a variety of online marketing techniques to promote
our website and mobile operation, particularly through Facebook and other
channels. We specifically targeted high-margin states, most notably Florida,
with tailored content. This derived a positive return on investment. However,
given the downturn in our other business streams later in the period, we
temporarily paused these initiatives, but we fully intend to roll out the
entire programme with effect from April 2023.
Whilst not neglecting other sectors of business, the Board now recognises that
the growth of the B2C sector is our best avenue of opportunity, but one that
we have neglected in the past. Our stated objective is to double our player
numbers on our platform by the end of 2024. On known metrics, this would
provide a sustainable level of profitability for the company, on top of all
our other revenue streams.
Business-to-business (B2B)
This continues to be an important sector of our division, but is, and most
probably will continue to be, both difficult to manage and maximize margin. As
stated on several occasions, the market is simply getting tougher, with the
big players dominating and certain operators willing to take wagers at an
almost zero percent margin. This is not now a model that we are particularly
interested in for obvious reasons. That said, we will not abandon this
division and never knowingly turn down business as long as it is conducted in
a legal, licensed and regulated fashion.
Cal Expo
Following the end of racing in May 2022, we enjoyed very strong revenue levels
from "dark money". We commenced live racing operations on 5 November 2022,
with initial performance being very strong, both in terms of horse population
and the level of wagers placed. Unfortunately, after that, we experienced
torrential volumes of rainfall throughout northern California. This resulted
in the cancellation of seven race meetings, which obviously had significant
impact on the operation. We have Health and Safety obligations to our equine
and human participants at the track and, of course, without live racing,
revenue levels were below normal.
On a more positive note, at time of writing, conditions have significantly
improved in California, and we expect very strong trading through the
racetrack until our scheduled end-of-season in late April.
Licenses
USA
I am pleased to report that we have successfully renewed our entire portfolio
of licenses in the USA. Most importantly, we were approved by the Californian
Horse Racing Board for our Advanced Deposit Wagering license until the end of
2024. Combined with that, as shareholders are aware, we have the exclusive
right to continue live operations at Cal Expo until 2030.
Whilst California is our key priority, I can also report that all our licenses
in key states have been further extended, the most notable of which are in New
York, Kentucky, Washington State, and multiple other important states. We
consider our array of licenses to continue to be a key asset to the Group.
Isle of Man
I am also pleased to report that during the period we renewed our license with
the Isle of Man Gambling Supervision Commission for a further five years.
Whilst we consider the US to be our main avenue for growth, we also believe as
amongst the very first license holders within the Isle of Man regulatory
environment, that this license is also a key asset to the Group and offers a
significant protection for our customer base.
Content
Based on competitor research, we know that we offer the widest range of live
content of any tote website in the world, both within the USA and
internationally. Unfortunately, we have not yet been able to properly
capitalise upon the extent of this coverage. Given our stated objective to
grow player numbers following the roll-out of an improved web site and mobile
ap, accompanied with renewed market initiatives, we see no reason why these
contractual relationships should not be extended both middle and long term.
Most importantly, as announced on the 23 December 2022, we signed a
significant agreement with Monarch Management Content throughout 2023. This
has had an immediate and positive impact on our B2C business, and there is no
reason why this relationship should not continue given our good compliance
record and our current assets in the USA.
Compliance
There were no compliance issues reported to our various regulators during the
period.
Health & Safety
There were no health and safety issues to report across the entire Cal Expo
operation, where equine and participant welfare remain our highest priority.
Clearly, operations have been very difficult at the racetrack in the recent
period, and I would particularly like to thank all our staff and associated
partners for their commitment to equine and human welfare.
Outlook
Short term
As stated, we have had a difficult period post October 2022. Despite that, I
remain extremely confident as we approach the spring months that trading will
improve in line with expectations.
In particular, the Board has been very pleased with the performance of our B2C
operations, which has continued to show consistent year-on-year growth
compared to the same period last year. It is a key focus to continue this
momentum going forward.
Longer term
Arizona Downs project
As previously announced, we have a contract to operate live racing at this
facility with a planned start date of September 2023. At present, we are
simply awaiting our license hearing from the Arizona Gaming Commission. We
expect this to be completed no later than the end of March 2023, but will
inform shareholders if these dates change. We see this as an important revenue
earner in its own right, but also as support for our Cal Expo operations. In
addition, it would provide us with extra leverage outside of California.
USA Expanded Gaming
During the period, shareholders will be aware of the failure of Proposition 26
and 27 to approve various forms of sports betting in California (November
2022). Contrary to general opinion, this was a very positive result for
WatchandWager, as we had been deliberately excluded from the 26 vote, and the
27 vote made little commercial sense.
As a licensed operator within California until at least 2030, we are well
positioned in this potential market which is of course arguably the biggest
new growth opportunity for sports betting globally. We are of the view that
public referendums will not work, and most participants have learned the
lesson from this. At time of writing, we are aware of at least two draft new
bills at the Senate level in Sacramento, only two miles away from our licensed
racetrack. We believe legalised sports betting will inevitably happen in
California for two reasons. Firstly, the market demand is too strong, and the
public want to be able to bet in a legal and licensed manner, rather than with
illegal offshore operators. Secondly, the economics are compelling, as
initiatives in New York, New Jersey and other states have shown. California is
now predicting a significant budget deficit into 2023 and 2024, primarily due
to the downturn in within the technology, social media, and other associated
industries. Pressure can only mount in the state Capitol for legalisation and
the accompanying tax revenue. Optimistically, a bill could be live by 2024
and, of course, will only be permitted to licensed operators including
ourselves.
Strategy
The Board is currently engaged in a strategy review of our key business
sectors. We are convinced the strategy for growth is to build on our successes
in the B2C sector and grow our many licensed assets. We will be issuing an
update to shareholders on this strategy by end April 2023.
Acquisitions and Mergers
We remain very optimistic regarding the business, especially our B2C and live
racetrack operations in CA, and AZ in the future. However, we do know that the
entire industry is a game of scale with the big becoming bigger and some of
the smaller operators struggling. We are aware that we are probably in the
middle of the pack, and we remain open to all discussions with credible
licensed operators throughout the world in relation to merger and acquisition
opportunities at an operating business level, providing they operate in a
licensed and regulated environment and pass due diligence.
Finally, I would like to thank all our shareholders, customers, and our staff
in the various jurisdictions for their loyalty and support of the business.
Denham Eke
Non-executive Chairman
23 February 2023
Condensed Consolidated Statement of Comprehensive Income
For the period ended 30 November 2022
Note Period to
30 November 2022 (unaudited) Period to
US$000 30 November 2021
(unaudited)
US$000
Amounts wagered 38,241 39,849
Turnover 3 6,226 6,795
Cost of sales (4,185) (4,566)
Betting duty paid (52) (53)
Gross profit 1,989 2,176
Operating costs (2,307) (2,220)
Other gains / (losses) 12 (3)
Other income 62 39
Operating loss (244) (8)
Finance costs 4 (81) (62)
Loss before income tax (325) (70)
Income tax expense 5 - -
Loss for the period (325) (70)
Other comprehensive income for the period - -
Total comprehensive loss for the period (325) (70)
Basic and diluted earnings per share for loss attributable to the equity 6 (0.08) (0.02)
holders of the Company during the period (cents)
Condensed Consolidated Statement of Financial Position
As at 30 November 2022
Note
As at Year ended
30 November 2022 31 May 2022
(unaudited) (audited)
US$000 US$000
Non-current assets
Intangible assets 7 11 11
Property, equipment and motor vehicles 674 724
Bonds and deposits 100 100
Total non-current assets 785 835
Current assets
Bonds and deposits 883 883
Trade and other receivables 1,033 1,190
Cash, cash equivalents and restricted cash 8 3,904 4,139
Total current assets 5,820 6,212
Total assets 6,605 7,047
Equity
Called up share capital 6,334 6,334
Share option reserve 42 42
Retained losses (5,383) (5,058)
Total equity 993 1,318
Current liabilities
Trade and other payables 3,526 3,640
Loans, borrowings and lease liabilities 9 99 109
Total current liabilities 3,625 3,749
Non-current liabilities
Loans, borrowings and lease liabilities 9 1,987 1,980
Total non-current liabilities 1,987 1,980
Total liabilities 5,612 5,729
Total equity and liabilities 6,605 7,047
Condensed Consolidated Statement of Changes in Equity
For the period ended 30 November 2022
Called up Share option reserve Retained earnings Total
share capital US$000 US$000 equity
US$000 US$000
Balance as at 31 May 2021 (audited) 6,334 42 (4,684) 1,692
Total comprehensive income for the period:
Loss for the period - - (70) (70)
Balance as at 30 November 2021 (unaudited) 6,334 42 (4,754) 1,622
Called up Share option reserve Retained earnings Total
share capital US$000 US$000 equity
US$000 US$000
Balance as at 31 May 2022 (audited) 6,334 42 (5,058) 1,318
Total comprehensive income for the period:
Loss for the period - - (325) (325)
Balance as at 30 November 2022 (unaudited) 6,334 42 (5,383) 993
Condensed Consolidated Statement of Cash Flows
For the period ended 30 November 2022
Note Period to
30 November 2022 Period to
(unaudited) 30 November 2021
US$000 (unaudited)
US$000
Cash flows from operating activities
Loss before income tax (325) (70)
Adjustments for:
- Depreciation 50 49
- Amortisation of intangible assets 3 4
- Loan interest paid 4 51 50
- (Increase) / decrease in movement of restricted cash* (27) 752
- Increase in lease liabilities 30 12
- Other foreign exchange movements (168) (5)
Changes in working capital:
- Decrease in receivables 157 476
- Decrease in payables (114) (1,336)
Cash flows used in operations (343) (68)
Bonds and deposits utilised in the course of operations - -
Net cash used in operating activities (343) (68)
Cash flows from investing activities
Purchase of intangible assets (3) -
Purchase of property, equipment and motor vehicles - -
Net cash used in investing activities (3) -
Cash flows from financing activities
Loan interest paid 4 (51) (50)
Increase / (payment) of lease liabilities - principal 7 (8)
Payment of lease liabilities - interest 4 (30) (12)
Repayment of loans and borrowings (10) (3)
Net cash used in financing activities (84) (73)
Net decrease in cash and cash equivalents (430) (141)
Cash and cash equivalents at beginning of year 3,062 3,238
Exchange gains on cash and cash equivalents 168 3
Cash and cash equivalents at end of period 2,800 3,100
*(Increase) / decrease in movement of restricted cash, has been reclassified
to Operating activities from Cash and cash equivalents. The reclassification
has been made to achieve better presentation, as the restricted cash relates
to player liabilities, which is part of the operating activity of the Group.
The impact of this reclassification on net cash used in operating activities
is a decrease of USD 0.752 million on the total as previously reported of
USD 0.820 million for the period to 30 November 2021.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
For the period ended 30 November 2022
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 interim financial statements as at and for the period ended 30
November 2022 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
UK Adopted - International Accounting Standards post Brexit. 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 2022 which is available on the
Group's website: www.webisholdingsplc.com (http://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 2022.
The unaudited condensed consolidated financial statements do not constitute
statutory financial statements. The statutory financial statements for the
year ended 31 May 2022, extracts of which are included in these unaudited
condensed consolidated financial statements, were prepared under UK Adopted -
International Accounting Standards post Brexit 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 2022 as set out in those financial
statements.
1.3 Functional and presentation currency
Items included in the unaudited condensed consolidated financial statements
are measured using the currency of the primary economic environment in which
the entity operates ('the functional currency'). As the primary activities of
the Group and the primary transactional currency of the Group's customers are
carried out in US Dollars, the unaudited condensed consolidated financial
statements have been presented in US Dollars. The determination of the
presentation currency does not involve significant judgement as the primary
activities of the Group are in US Dollars.
1.4 Going Concern
As noted within the statutory financial statements for the year ended 31 May
2022, the Directors have continued to undertake 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, along with continuing to develop and expand the Cal
Expo racetrack operations, and monitoring the status of sports betting
legislation within the State of California, all of which remain 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 remains difficult to predict.
Based on the above, 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
Period to 30 November 2022 (unaudited) Racetrack ADW Corporate operating costs Total
US$000 US$000 US$000 US$000
External revenues 5,101 1,125 - 6,226
Segment revenue 5,101 1,125 - 6,226
Segment profit / (loss) before tax 75 (315) (85) (325)
Finance costs (30) (1) (50) (81)
Depreciation and amortisation (31) (21) (1) (53)
Period to 30 November 2022 (unaudited)
Segment assets 2,396 2,795 1,414 6,605
Segment liabilities 1,504 2,627 1,481 5,612
Reportable segments
Period to 30 November 2021 (unaudited) Racetrack ADW Corporate operating Total
US$000 US$000 costs US$000
US$000
External revenues 5,530 1,265 - 6,795
Segment revenue 5,530 1,265 - 6,795
Segment profit / (loss) before tax 155 (155) (70) (70)
Finance costs (10) (3) (49) (62)
Depreciation and amortisation (29) (22) (2) (53)
Period to 31 May 2022 (audited)
Segment assets 2,324 3,387 1,336 7,047
Segment liabilities 1,522 2,779 1,428 5,729
C. Reconciliation of reportable segments profit or loss
Period to Period to
30 November 2022 30 November 2021
(unaudited) (unaudited)
US$000 US$000
Loss before tax
Total loss before tax for reportable segments (240) -
Loss before tax for other segments (85) (70)
Consolidated loss before tax (325) (70)
3. Revenue
The Group's operations and main revenue streams are those described in the
last annual financial statements. The Group's revenue is derived from
contracts with customers.
Disaggregation of revenue
In the following tables, revenue is disaggregated by primary geographical
market, major services lines and timing of revenue recognition. The tables
also include a reconciliation of the disaggregated revenue with the Group's
reportable segments (see Note 2).
Reportable segments
Period to 30 November 2022 (unaudited) Racetrack ADW Total
US$000 US$000 US$000
Primary geographic markets
North America 5,101 881 5,982
British Isles - 243 243
Caribbean - 1 1
Segment revenue 5,101 1,125 6,226
Major service lines
ADW wagering 3,708 1,125 4,833
Race hosting 1,393 - 1,393
5,101 1,125 6,226
Timing of revenue recognition
Services transferred at a point in time 5,101 1,125 6,226
Revenue from contracts with customers 5,101 1,125 6,226
External revenue as reported in Note 2 5,101 1,125 6,226
Reportable segments
Period to 30 November 2021 (unaudited) Racetrack ADW Total
US$000 US$000 US$000
Primary geographic markets
North America 5,530 969 6,499
British Isles - 296 296
Segment revenue 5,530 1,265 6,795
Major service lines
ADW wagering 4,116 1,265 5,381
Race hosting 1,414 - 1,414
5,530 1,265 6,795
Timing of revenue recognition
Services transferred at a point in time 5,530 1,265 6,795
Revenue from contracts with customers 5,530 1,265 6,795
External revenue as reported in Note 2 5,530 1,265 6,795
4 Finance costs
Period to Period to
30 November 2022 30 November 2021
(unaudited) (unaudited)
US$000 US$000
Loan interest payable (51) (50)
Lease liability interest payable (30) (12)
Finance costs (81) (62)
5 Income tax expense
(a) Current and Deferred Tax Expenses
The current and deferred tax expenses for the period were US$ Nil (30 November
2021: US$ Nil). Despite having made losses in the past, 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 2022 30 November 2021
(unaudited) (unaudited)
US$000 US$000
Loss before tax (325) (70)
Tax charge at IOM standard rate (0%) - -
Adjusted for:
Tax credit for US tax losses (at 21%) (70) (24)
Add back deferred tax losses not recognised 70 24
Tax charge for the period - -
The maximum deferred tax asset that could be recognised at period end is
approximately US$ 1,055,000 (30 November 2021: US$ 918,000). The Group has not
recognised any asset as it might not be recoverable within the allowed period.
6 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 2022 30 November 2021
(unaudited) (unaudited)
US$000 US$000
Loss for the period (325) (70)
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) (0.08) (0.02)
Diluted earnings per share (cents) (0.08) (0.02)
The earnings applied are the same for both basic and diluted earnings
calculations per share as there are no dilutive effects to be applied.
7 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.
8 Cash, cash equivalents and restricted cash
Year ended
Period to 31 May 2022
30 November 2022 (audited)
(unaudited) US$000
US$000
Cash and cash equivalents - company and other funds 2,800 3,062
Restricted cash - protected player funds 1,104 1,077
Total cash, cash equivalents and restricted cash 3,904 4,139
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 and certain USA state customers, shown as 'protected
player funds'.
Protected player funds are held in fully protected client accounts within an
Isle of Man regulated bank and in segregated accounts within a USA regulated
bank.
9 Loans, borrowings and lease liabilities
Current liabilities
Year ended
Period to 31 May 2022
30 November 2022 (audited)
(unaudited) US$000
US$000
Unsecured loan (current portion) 21 20
Lease liabilities (current portion) 78 89
99 109
Non-current liabilities
Year ended
Period to 31 May 2022
30 November 2022 (audited)
(unaudited) US$000
US$000
Unsecured loan (non-current portion) 36 47
Lease liabilities (non-current portion) 601 583
Secured loans - Galloway Ltd 1,350 1,350
1,987 1,980
Terms and repayment schedule
Nominal Year ended
interest rate Year of maturity Period to 31 May 2022
30 November 2022 (audited)
(unaudited) US$000
US$000
Unsecured loans 1.00-8.90% 2025 57 67
Lease liabilities 6.00-9.50% 2023-30 679 672
Secured loan - Galloway Ltd 7.75% 2027 500 500
Secured loan - Galloway Ltd 7.00% 2024 350 350
Secured loan - Galloway Ltd 7.00% 2025 500 500
Total loans and borrowings 2,086 2,089
The secured loans from Galloway Ltd are secured over the unencumbered assets
of the Group.
10 Related party transactions
Identity of related parties
The Group has a related party relationship with its subsidiaries, and with its
Directors and executive officers, and with Burnbrae Ltd (significant
shareholder).
Transactions with and between subsidiaries
Transactions with and between the subsidiaries in the Group which have been
eliminated on consolidation are considered to be related party transactions.
Transactions with entities with significant influence over the Group
Rental and service charges of US$ 16,883 (30 November 2021: US$ 23,868) and
Directors' fees of US$ 17,230 (30 November 2021: US$ 13,834) were charged in
the period by Burnbrae Ltd of which Denham Eke is a common Director and Katie
Errock is an employee. The Group also had a loan of US$ 1,350,000 (31 May
2022: US$ 1,350,000) from Galloway Ltd, a company related to Burnbrae Limited
by common ownership and Directors (see note 9).
Transactions with other related parties
There were no transactions with other related parties during the period.
11 Subsequent events
There were no significant subsequent events identified after 30 November 2022.
12 Approval of interim statements
The interim statements were approved by the Board on 23 February 2023. The
interim report is expected to be available for shareholders on 24 February
2023 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, Building
3, Chiswick Park, 566 Chiswick High Road, London W4 5YA.
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