INTERIM REPORT Q2 2013

Transcription

1 INTERIM REPORT Q April June 2013 Betting turnover: 127,865 KEUR (170,589) Net turnover after trading fees: 502 KEUR (842) Gross margin: 0.39% (0.49) 1 Operating income: -255 KEUR (3) Operating margin: -51% (0) 2 Net Income: -424 KEUR (15) Earnings per share: EUR (0.00) January - June 2013 Betting turnover: EUR 282,651 KEUR (345,768) Net turnover after trading fees: 776 KEUR (1,121) Gross margin: 0.27% (0.32) 1 Operating income: -811 KEUR (-574) Operating margin: -105% (-51) 2 Net income: -948 KEUR (-578) Earnings per share: EUR (-0.06) Review of business The Board of Betting Promotion is of the view that the company has not been able to deliver satisfactory results for some time. For this reason the new Company Chairman, Mr Peter Åström, will act as Executive Chairman and work together with management and staff to make a review of the business. The Company's two products, Trading and Bookmaking, will be subject to an analysis and a new business plan will be established. 1 Net Turnover after trading fees as percent of Betting Turnover 2 Operating Income as percent of Net Turnover after trading fees INTERIM REPORT 2013 BETTING PROMOTION 1

2 Comments from the CEO Second-quarter earnings were well below budget. For Trading the margin was 0.3%, i.e. the bottom limit of the expected margin of between 0.3% to 0.6%. For Bookmaking the margin was in line with expectations, albeit with very low volumes. The negative net income is due to lower gaming turnover, write-downs during the quarter in question and continued investment in the product Bookmaking. The lower gaming turnover is a consequence of the fact that there are no major championships in We have made a final agreement with Key Quest Ltd and a new payment plan has been established with Game Village and they involve write-downs of 123 KEUR. I am looking forward to working with Peter Åström to achieve positive operating results says Betting Promotion's CEO Mr Jonas Ornstein. INTERIM REPORT 2013 BETTING PROMOTION 2

3 Overview April June 2013 Net Turnover after trading fees for the second quarter amounted to 502 KEUR (842). Betting Turnover for the second quarter amounted to 127,865 KEUR (170,589). This means that the second quarter shows a gross margin of 0.39% (0.49). Trading Trading refers to the turnover which is traded directly on Betting Exchanges with very small margins. Net Turnover from Trading for the second quarter amounted to 354 KEUR (738). Betting Turnover for the second quarter amounted to 118,965 KEUR (163,594). This means that Trading for the second quarter shows a gross margin of 0.30% (0.45). The decrease in Betting Turnover was primarily due to fewer events and that no major championships took place during the quarter. Over a longer period the expected trading margin is between 0.3% and 0.6%. From our routine analysis of the applied trading models and betting patterns, we have concluded that the quarter s low margins are within the expected volatility. Bookmaker Bookmaker refers to the business where the company supplies odds to operators who in turn offer these prices to end consumers. Net Turnover for the second quarter amounted to 148 KEUR (105). Betting Turnover for the second quarter amounted to 8,900 KEUR (6,955). This leads to a gross margin of 1.67% (1.50). Overview January June 2013 Net Turnover after trading fees for the first six months amounted to 776 KEUR (1,121). Betting Turnover amounted to 282,651 KEUR (345,768). This means that the period shows a gross margin of 0.27%(0.32). Trading Net Turnover from Trading in the first six months amounted to 494 KEUR (940). Betting Turnover amounted to 265,544 KEUR (334,240). This means that trading in the first six months shows a gross margin of 0.19% (0.28). The decrease in Betting Turnover was primarily due to fewer events and that no major championships took place during the period. The margin from the trading product has not reached our long term expectations. The business is such that it is not possible to draw conclusions on such a short period of six months. From analysis of seasonal variations over the year, historically approximately 60% of annual revenues for football is generated between the months of September and November. The company is continuosly working to opitimize and improve the gaming models and forecast that this product would be sustainable. INTERIM REPORT 2013 BETTING PROMOTION 3

4 Bookmaker Net Turnover from Bookmaker product for the first six months amounted to 282 KEUR (181). Betting Turnover amounted to 17,107 KEUR (11,529). This means that the bookmaker in the first six months shows a gross margin of 1.65% (1.57). PRODUCT DISTRIBUTION FOR Q2 Betting turnover (KEUR) Net turnover after fees (KEUR) Gross margin (%) Trading 118, Bookmaker 8, Total 127, PRODUCT DISTRIBUTION FOR 2013 Betting turnover (KEUR) Net turnover after fees (KEUR) Gross margin (%) Trading 265, Bookmaker 11, Total 282, BETTING TURNOVER, KEUR Q1 229, , ,786 Q2 159, , ,865 Q3 160, ,829 Q4 195, ,854 Total 745, , ,651 NET TURNOVER AFTER FEES, KEUR Q Q Q Q4 1,171 1,654 Total 1,936 3, INTERIM REPORT 2013 BETTING PROMOTION 4

5 OPERATING INCOME, KEUR Q1-1, Q Q Q Total -1, Significant events during the period Certified Advisor Since 1 June 2013 Mangold Fondkommission AB has taken over the role as Certified Adviser after Sedermera Fondkommission AB. Mangold is also liquidity guarantor for Betting Promotion. Annual General Meeting Betting Promotion held Annual General Meeting 15 May Among the decisions previously announced were: Board of Directors Meeting re-elected Jonas Ornstein, Greg Dingizian and Niklas Braathen as board members, and elected Christer Fahlstedt and Peter Åström as new board members. Peter Åström was elected as the new Chairman. Number of Directors and remuneration The meeting resolved that the Board shall consist of four members and that fees to Board and committee members who are not employed with the company shall be paid as follows: SEK 100,000 to the Chairman; SEK 50,000 to each of the other Board members; The meeting also decided that the auditor shall be paid according to approved invoices and that no fees shall be paid to the election committee members. The meeting resolved that the Articles of Association shall be amended by the Board shall have its residence in Malmö, Skåne. The Meeting resolved to issue warrants. In this regard, the following conditions apply in summary: to a maximum of 500,000 warrants will be issued with each warrant entitles the holder to subscribe for one share, the right to subscribe for warrants shall, with deviation from the shareholders' preferential rights, a newly formed wholly owned subsidiary of the Company ("the subsidiary"), with no compensation for the options from the subsidiary; the drawing will take place on the subscription list no later than 30 June 2013 INTERIM REPORT 2013 BETTING PROMOTION 5

6 the subsidiary shall, upon instructions from the Board of the Company, transfer warrants to existing and future senior executives and board members of the Company's future consolidated according to the detailed distribution of the Board's decision in accordance with the following principles. a) Future Board members offered to acquire 100,000 to 150,000 warrants per person; b) senior management will be offered to purchase 50,000 to 75,000 warrants per person, and c) other employees in the company's Group will be offered to acquire from 10,000 to 25,000 warrants per person Key Quest As at 31st March 2013, Betting Promotion had a receivable of 118 KEUR from Key Quest Ltd. This balance was considered as bad debt. During April the company had reached an agreement and collected a final payment of 12 KEUR and the remaining balance of 106 KEUR was written off. GameVillage As at 31st March 2013, Betting Promotion had a receivable of 717 KEUR arising from the sale of GameVillage of which 180 KEUR was due within one year. During the quarter Betting Promotion has renegotiated the terms of the receivable. The company has agreed to waive off 17 KEUR and to accept a down payment of 350 KEUR. The 350 KEUR down payment is held in escrow and will be received upon finalisation of all legal due diligence and the release of pledge on GameVillage shares. The outstanding balance is subject to 4% interest and to be repaid over 35 monthly instalments. The company still holds a security in the form of property to guarantee the performance of the receivable. Outlook for 2013 Betting Promotion s policy is not to issue earnings forecasts. Equity The group s equity as at 30 June 2013 was 7,362 KEUR (7,849), which is equivalent to 0.77 EUR (0.82) per share. Cash and Cash flow Cash and Cash equivalents at the end of the period amounted to 4,517 KEUR (4,823). Cash flow for the period amounted to -1,021 KEUR (-747). Operating cash flow amounted to -601 KEUR (-684). Cash held with licensed customers amounted to 3,354 KEUR (4,577). Parent Company Betting Promotion Sweden AB acts as a holding company and provides managerial services to the rest of the group. The main income of the Betting Promotion Sweden AB is dividends received from fully owned subsidiaries. Betting Promotions Sweden AB also receives Management Fees from fully owned subsidiaries. Revenue from Management Fees for the period amounted to 240 KEUR(240). INTERIM REPORT 2013 BETTING PROMOTION 6

7 Transactions with Related Parties Parent Company 30 Jun 31 Dec Short Term Receivable Betting Promotion Teknik Malmo AB Betting Promotion Holdings Ltd 90 - Betting Promotion Ltd - 3 Group During the period, except for ordinary remuneration to senior executives, there have been no material transactions with related parties and at end of the period there are no receivables and liabilities to related parties. INTERIM REPORT 2013 BETTING PROMOTION 7

8 Accounting policy Betting Promotion s consolidated accounts have been prepared in accordance with International Financial Reporting Standards (IFRS). This interim report was prepared for the group in accordance with the IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The accounting and calculation principles used in the interim report for the group are identical to those used in the Annual Report for None of the new and changed standards from IFRS, applicable from 1st of January 2013, has had any effect on the Financial Statements as at 30 th June For the parent company the interim report was prepared in accordance with RFR 2 Accounting for legal entity and the Swedish Annual Accounts Act. The interim report has been prepared in accordance with the same accounting principles as in Assessment of risk environment There have been no significant changes regarding the risks and uncertainties to which Betting Promotion is exposed since the publication of the previous report and Annual Report. Betting Promotion is in the gaming business. Results are affected by the outcome of individual sporting events. Central to Betting Promotion s business is the technology which manages this risk. In the short term margins can vary without affecting the long term development of the company. A description of other risks and uncertainties can be found in the Annual Report Financial information 2013: Q3 report 25 Oct 2013 Q4 report 25 Feb 2014 Board assurance The Board of Directors and CEO ensure that the interim report provides a true and fair overview of the Parent Company and the Group operations, position and earnings and describes the material risks faced by the Parent Company and the Group. Stockholm 25 July 2013 Betting Promotion Sweden AB (publ) Org. nr Peter Åström Chairman Jonas Ornstein Member of the board and CEO Niklas Braathen Member of the board Greg Dingizian Member of the board Christer Fahlsted Member of the board This report has not been reviewed by the auditors. This Interim Report is published in Swedish and English. In the event of any difference between the English version and the Swedish original, the Swedish version shall prevail. For further information please contact: Jonas Ornstein, CEO of Betting Promotion Sweden AB. Telephone INTERIM REPORT 2013 BETTING PROMOTION 8

9 Appendix GROUP INCOME STATEMENT (KEUR) Note Apr-Jun Apr-Jun Jan-Jun Jan-Jun Net turnover 805 1,179 1,450 1,843 Work performed by the company for its own use and capitalized Trading fees Other external expenses Staff expenses ,023 Depreciation Operating income Financial net Income after financial items Income taxes Income for the period Attributed to: Equity Holders of the Parent Company Gross margin (%) Operating margin (%) Earnings per share before & after dilution (EUR) Average number of shares, (thousand) 9,520 9,520 9,520 9,520 Number of shares outstanding, (thousand) 9,520 9,520 9,520 9,520 Note 1 Financial net includes a write off relating to GameVillage and Key Quest of 17 KEUR and 106 KEUR respectively. STATEMENT OF COMPREHENSIVE INCOME (KEUR) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Income for the period Recalculation difference Total other comprehensive income for the period Attributed to: Equity Holders of the Parent Company INTERIM REPORT 2013 BETTING PROMOTION 9

10 GROUP BALANCE SHEET (KEUR) Assets Note 30 Jun 30 Jun 31 Dec Intangible assets 1,285 1,334 1,314 Tangible assets Financial assets Deferred tax assets Total non-current assets 2,183 2,529 2,260 Short-term receivables Marketable securities Cash and bank accounts 3 4,517 4,823 5,542 Total current assets 5,415 5,622 6,349 Total assets 7,598 8,151 8,609 Shareholders equity and liabilities Share capital 2,136 2,136 2,136 Additional contributed capital 1,363 1,363 1,363 Reserves Retained earnings incl income for the period 4,616 5,102 5,564 Total equity attributed to parent company 7,362 7,849 8,313 Total shareholders equity 7,362 7,849 8,313 Deferred Tax Liabilities Current Liabilities Total liabilities Total shareholders equity and liabilities 7,598 8,151 8,609 Note 2 Financial Assets and short term receivable comprise from a receivable of 250 KEUR (711) and 450 KEUR (-) respectively, arising from the sale of GameVillage. Note 3 Cash and bank accounts include cash assets held with customers. As at 30 June 2013 cash held with customers amounted to 3,354 KEUR (4,577) and as at 31 December ,600 KEUR. INTERIM REPORT 2013 BETTING PROMOTION 10

11 GROUP CASH-FLOW STATEMENT (KEUR) Note Jan-Jun Jan-Jun Income after financial items Depreciation & gain/losses from disposal/sale of fixed assets Taxes -6 - Cash flow from change in working capital Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities - - Cash flow for the period -1, Cash and cash equivalents, start of period 5,542 5,570 Translation difference on cash and cash equivalents -4 0 Cash and cash equivalents, end of period 4,517 4,823 Note 4 The difference in income after financial items compared to the Group Income Statement relates to non cash financial items such as unpaid interest and unrealized currency differences. GROUP CHANGES IN SHAREHOLDERS EQUITY (KEUR) Jan-Jun Jan-Jun Jan-Jun Equity Attributed to Parent Company Total equity at beginning of period 8,313 8,425 8,425 Total comprehensive income for the period Total equity attributed to parent company 7,362 7,849 8,313 INTERIM REPORT 2013 BETTING PROMOTION 11

12 PARENT COMPANY INCOME STATEMENT (KEUR) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Net turnover Other external expenses Staff expenses Depreciation Operating income Interest income and similar credits Interest expense and similar credits Income after financial items Income taxes Income for the period PARENT COMPANY BALANCE SHEET (KEUR) 30 Jun 31 Dec Assets Financial assets 11,373 11,367 Total non-current assets 11,373 11,367 Short-term receivables Marketable securities - 3 Cash and bank accounts Total current assets Total assets 12,151 12,147 Shareholders equity and liabilities Restricted Capital Share capital 2,136 2,136 Non-Restricted Capital Share premium reserve Retained earnings 9,708 9,861 Income for the period Total shareholders equity 12,133 12,094 Current liabilities Total liabilities Total shareholders equity and liabilities 12,151 12,147 INTERIM REPORT 2013 BETTING PROMOTION 12