24th Feb 2015 09:57
LONDON (Alliance News) - Gaming and racetrack operating firm Webis Holdings PLC Tuesday posted a swing to a loss in its first half, but expressed confidence it is continuing to make good progress despite the "relatively short-term challenges" it is experiencing.
For the half year to end-November, Webis posted a pretax loss of USD299,000, versus a pretax profit of USD461,000 a year before, as a rise in revenue to USD142.5 million from USD124.4 million was offset by higher cost of sales, betting duties paid, and operating costs. In the previous year, the company also recorded an exceptional USD230,000 gain from the strength of sterling during that period.
Webis attributed the swing to a loss to a higher cost base in its US operations, mostly as a result of higher levels of duty, licensing and compliance costs that come with operating in a fully licensed and legitimate manner, tightened gross margins, and some volatility in its high-roller activity.
The company's WatchandWager business grew revenue by 1.2%, as a rise in high-roller wagering into international jurisdictions was boosted by a two-year contract with the Hong Kong Jockey Club. However, wagering activity through its website and mobile product saw lower growth than it had hoped, so it has scaled back part of its marketing activity.
The company said it is continuing to monitor developments in the US racetrack and gaming market, and is currently looking at a number of business opportunities in the US. Early trading in the second half has shown further increases in revenue from high-roller betting.
In Webis's betinternet business, it saw an improved trading performance. However, it said it has withdrawn from the Singapore market in February after internet gambling became illegal. The company said that it is continuing to review opportunities available for the business, including the appropriateness of a full UK licence.
"The board remains confident that we are continuing to make good progress as a group, despite the relatively short-term challenges that we are experiencing, particularly with regards to the increased cost of operating in regulated markets. There are still many opportunities and a lot to be achieved in this sector and our efforts thus far in the US give us a solid framework upon which to build," said Non-Executive Chairman Denham Eke in a statement.
Shares in Webis are untraded Tuesday. It last closed at 1.25 pence.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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