I didn't agree with the 50/50 rule. No more than 50% of your bets could be props. I'm not sure if that still exists.
This is a whole new company:
Quote:
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Morgan Stanley and Goldman Sachs hold shares of BetOnSports
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"BETONSPORTS PLC - Successful AIM IPM and £54.6 million fundraising
BETonSPORTS plc [BSS] (“BETonSPORTS” or the “Company”), the holding company of a group which operates a leading US facing online and telephone sportsbook and online casino, announces its successful admission to AIM. Trading of BETonSPORTS shares commenced at 8:00am on Thursday 15 July 2004.
The Company raised £54.6 million through the successful placing by Evolution Beeson Gregory, of 39,032,006 ordinary shares with institutional investors at 140p per share.
This was the third largest fund raising on AIM this year and the company, upon admission, had a market capitalisation of £114 million.
"
14 October 2004
BETonSPORTS PLC
Interim Results
BETonSPORTS, the world’s largest USA facing online and telephone sportsbook and online casino, is pleased to announce its results for the twenty six weeks ended 1 August 2004.
Highlights
Successful IPO on AIM raising $44m (after costs) in July 2004
Bought out 49% minority in Millennium companies for $25m
IPO funds to be used to continue the successful expansion of the business, particularly in Central and South America
Profit Before Tax increased 7.3% to $4.4m from $4.1m
Administration expenses reduced 10.2% to $21.1m from $23.5m
Earnings Per Share increased by 6% to 5.3 cents from 5 cents in the previous period
Cash at Bank increased by over $50m to $58.8m as compared with August 2003
Successful launch of BOS Poker.com in October 2004
Chairman’s Statement
This is BETonSPORTS PLC’s first interim report as a public limited company. It has only been 3 months since our successful admission to trading on AIM so the update which we can give to shareholders is limited. However, it is the Board’s intention to communicate regularly and effectively with shareholders. To this end the Chief Executive, in his review, has provided an insight into early progress and our future strategic intentions.
Your company was admitted to trading on the AIM market on 15 July 2004. We were very pleased that the successful placing of shares provided the business with $44m to fund its planned expansion. As part of the process the Group acquired, for $25m, the balance of the Millennium companies (49%) that it did not already own. This has strengthened the Group’s very successful multi brand strategy (offering customers differently branded sportsbooks).
It is pleasing to report that the profit before tax for the 6 months under review was $4.4m (2003 $4.1m), which was slightly ahead of the previous year. The figures for both periods have been prepared as though the current Group structure had existed throughout. As was highlighted at the time of the flotation, the first six months of 2003 included a period of exceptional results, which we did not expect to be able to reproduce. Careful control of costs, and a decision to further focus the advertising expenditure towards the second half of the year, have enabled the Group to exceed its internal expectations. These points are discussed in more detail in the Chief Executive’s review.
Prior to flotation, but during the period under review, the Company declared and paid an interim dividend of $3.8m.
The dedication and support of the entire BETonSPORTS team has helped the Group to achieve rapid growth in its core market over the last five years. We now intend to use this experience in other countries where the provision of wagering and gaming is currently under-developed. To achieve this objective we will need to further strengthen our management resources. This we will do in the short term.
The philosophy of the Group has always been to develop its activities in both an ethical and innovative way. Our strategy is to increase volumes in our traditional market by providing new offerings such as on-line poker and other on-line products, as well as developing our sports book brands. Additionally we are investing significant resources in new technologies and methodologies and in order to leverage our significant investment in an effective way, we are developing methods of accepting wagering in a number of new territories utilising the call centres in Costa Rica and the Dominican Republic.
On Friday 8 October, we successfully launched the BETonSPORTS poker game, BoSPOKER.com with a high profile charity poker party in Beverly Hills at which professional players challenged well known celebrities.
We are working hard to promote ethical gaming and currently support many help organisations and charities, including UK based Gamcare. The Group continues to lead the campaign in the USA to legalise and regulate on-line gaming and we have been very active in this area in the period under review. More details about this are given in the Chief Executive’s review.
The Board is confident that the Group will, over the next few years, deliver continually improving performance, resulting in an increase in long term shareholder value. The industry represents a dynamic and exciting arena in which to develop our business and we look forward to the Group’s prospects and its future as a plc.
Clive Parritt
Chairman
14 October 2004
Chief Executive’s Review
Financial Results
Twenty six weeks ended 1 August 2004
The profit before tax for the period was $4.4m as compared with $4.1m for the comparable period last year.
As anticipated in the AIM admission document the turnover from online and telephone sports betting and the online casino was lower in the period than in the comparable period for 2003. However, the group has experienced strong growth in fee income generated from market research and telemarketing service companies utilizing the BETonSPORTS business infrastructure ($4.1m as against $1.4m.) Opportunity for further growth in fee income exists, as the increasing levels of core business activity moving to the internet channel will free up further infrastructure for future expansion.
As a result of this growth in fee income and successful cost control, including the planned rephasing of advertising expenditure, the results for the twenty six weeks to 1 August 2004 are slightly better than the comparable six months to 3 August 2003.
It should be understood that short term patterns in sporting results can heavily influence operating profits. Our financial performance for the first six months of 2003 benefited from an unprecedented period in which favourites lost consistently. As explained previously, this was not repeated in the period under review. Our business is inevitably subject to short-term swings and it is vital to review the underlying long term performance in order to assess the strength of the business. Additionally the business of BETonSPORTS plc is highly seasonal with the majority of turnover, margins and profits arising in the second half of the financial year.
Review of Operations
Internet traffic in the sportsbook continues to increase. We have introduced different delivery channels for expansion into new territories and are in the process of launching a number of new products. The group has strengthened its operational infrastructure capability with the provision of further redundancy coverage for its operating server rooms and the continued development of defense systems to offset risk from denial of service attacks, which remain an ever present threat to on-line industries.
Despite the highly visible strong arm tactics from the Department of Justice in St Louis, Missouri to try to frighten advertisers from taking advertisements for online gaming, BETonSPORTS has been able to secure marketing spends in all mediums (Print, Radio, TV Internet and Point Of Sale) albeit that some new properties in existing channels, explored in addition to the traditional properties, are untested and speculative.
The Group has also continued successfully to market its services using direct mail to reach its extensive customer database. We are maintaining our market leadership and brand recognition in our core market place. It is too early to assess whether there will be any impact on cost per customer acquisition as a result of exploring new advertising properties since any advertising property takes time to mature and cost benefits only accumulate from multiple exposures.
BETonSPORTS continues to lead the industry in its efforts to secure regulation certainty in North America. Coinciding with the start of the NFL Football season BETonSPORTS launched phase two of its ‘Right to Wager’ campaign with a series of TV adverts coast to coast and a media summit tour of four major cities (New York, Washington, Chicago and Los Angeles). We remain optimistic that in the medium term there will be positive change to the regulatory environment for online gaming in North America.
The group continues to progress its strategy to develop the BETonSPORTS brand in South and Central America and Asia and has made good progress towards launching activity in Mexico, Panama and Guatemala. We are expecting to make announcements regarding the commencement of trading in Mexico and Guatemala shortly.
The Group launched BoSPOKER.com with a star-studded, high profile charity poker party in Beverly Hills on 8 October. Online multi-player poker is currently the fastest growing gaming product on the internet and, with over 1.2 million registered customers, BETonSPORTS is confident that this product will enhance its customer experience and, in addition to attracting new customers, will reinforce customer loyalty.
Outlook
During the first six months of the current financial year, BETonSPORTS has continued to make progress in the development of its business. The resources and reputation benefits obtained from its newly acquired plc status will position the business to exploit opportunities to which it would otherwise not have had access.
This year the NFL season started one week later than last year, and it has been affected by several major hurricanes. It is too early to draw definitive conclusions from the first few weeks of the season, but the Group remains broadly confident about the future.
David Carruthers
Chief Executive Officer
14 October 2004
Notes to Editors
BETonSPORTS is a leading North American-facing on-line and telephone sportsbook and casino operator. The company admitted to trading on AIM, London Stock Exchange on 15 July 2004
The Group gained its first internet sportsbook operating licence in Antigua in 1997. At the peak of high season in the financial year ended 31 January 2004, it employed over 1,600 employees in Antigua, Costa Rica, the Dominican Republic and the United Kingdom
For the year ended 31 January 2004, BETonSPORTS reported turnover of US$1.25 billion and profits before tax of $27m. The Company’s profits have grown every year since 2000, rising by 4,400% over the five year period. The Company operates 11 online brands, and takes the majority of its revenues from bets placed on US sports such as American Football, Basketball and Baseball
Over 33 million sportsbook and casino bets were placed with the Group in the financial year ended 31 January 2004. This equates to more than one bet every second, and approximately 90% of all the bets it received were taken over the internet. Further information on the company can be found at
www.betonsports.com
Further Enquiries:
BETonSPORTS plc
David Carruthers (Chief Executive Officer) +44 (0)783 435 1773
Citigate Dewe Rogerson
Ginny Pulbrook, Victoria Brough +44 (0)20 7638 9571
Unaudited Consolidated Profit and Loss Account
Pro forma
Pro forma
Pro forma
Notes
26 Weeks to
26 Weeks to
52 Weeks to
1 August 2004
3 August 2003
1 February 2004
US$ '000
US$ '000
US$ '000
Turnover
(2)
403,417
429,775
1,252,328
Cost of sales
(378,094)
(402,241)
(1,162,090)
Gross profit
25,323
27,534
90,238
Administration expenses
(21,072)
(23,514)
(63,448)
Operating profit
4,251
4,020
26,790
Interest receivable
108
70
175
Profit before taxation
4,359
4,090
26,965
Taxation
(75)
-
(86)
Profit after taxation
4,284
4,090
26,879
Dividends Payable
(3,796)
-
(22,846)
Retained profit for the period
(4)
488
4,090
4,033
Earnings per Ordinary Share (cents)
5.3
5.0
33.1
Earnings per Ordinary Share fully diluted
4.9
-
-
Unaudited Consolidated Balance Sheet
Proforma
Proforma
Notes
As at
As at
As at
1 August 2004
3 August 2003
1 February 2004
US$ ‘000
US$ ‘000
US$ ‘000
Fixed assets
Tangible assets
4,082
4,234
4,297
Intangible assets
2,136
1,758
2,172
Goodwill
21,670
1,189
1,054
Investments
95
170
95
27,983
7,351
7,618
Current assets
Debtors
22,010
29,971
20,714
Cash and bank balances
(3)
58,845
8,718
28,429
80,855
38,689
49,143
Creditors: amounts falling due within one year
(36,054)
(33,633)
(36,911)
Dividend payable
-
-
(7,500)
Net current assets
44,801
5,056
4,732
Total assets less current liabilities
72,784
12,407
12,350
Net assets
72,784
12,407
12,350
Capital and reserves
Called up share capital
1,493
50
50
Share premium account
62,630
-
-
Profit and loss account
(4)
8,661
12,357
12,300
Shareholders' equity funds
72,784
12,407
12,350
Unaudited Consolidated Cash Flow Statement
Pro forma
Pro forma
Pro forma
Notes
26 weeks ended
26 weeks ended
52 weeks ended
1 August 2004
3 August 2003
1 February 2004
US$ '000
US$ '000
US$ '000
Net cash inflow from operating activities
(3)
3,509
(9,484)
27,331
Returns on investments and servicing
Of finance:
Interest received
108
71
175
Taxation
(75)
-
(86)
Capital expenditure and financial investment
Purchase of tangible fixed assets
(631)
(1,192)
(2,202)
Purchase of intangible fixed assets
(345)
0
(768)
Purchase of minority interests/investments
(25,000)
(45)
(45)
Equity dividends paid
(11,296)
-
(15,346)
Cash inflow before use of liquid resources
and financing
(33,730)
(10,650)
9,059
Financing
Issue of share capital
64,146
-
-
Increase in cash
(3)
30,416
(10,650)
9,059
Reconciliation of net cash flow to movements in net funds
Movement in funds in period
30,416
(10,650)
9,059
Opening net funds
28,429
19,370
19,370
Closing net funds
(3)
58,845
8,718
28,429
1.
Accounting policies
The interim report and accounts comprise the unaudited results for the 26 weeks ended 1 August 2004, comparative results for the 26 weeks ended 3 August 2003 and the audited results for the 52 weeks ended 1 February 2004. The interim accounts have been prepared under the historical cost convention and have been prepared using the accounting policies as described in the AIM admission document issued on the 15 July 2004.
Basis of preparation
The principal operating currency of the group is US Dollars, and accordingly the financial statements have been prepared in US Dollars. The results for the six months ended on the 1st August 2004 and the comparative figures for the previous period are unaudited .
Copies of the interim accounts will be sent to the shareholders. Further copies can be obtained from the registered office of the Company, Summit House 12 Red Lion Square, London WC1R 4QD
Purchased goodwill
Goodwill represents the excess of the purchase price over the fair value of the assets. It is capitalized and is subject to a periodic impairment review.
Tangible fixed assets
Tangible fixed assets are stated at historical cost.
Depreciation is provided on all tangible fixed assets at rates calculated to write each asset down to its estimated residual value over its expected useful life as follows:
Leasehold improvements
over the term of the lease
Fixtures an fittings
15% per annum
Computer equipment and software
15% to 33% per annum
Motor vehicles
20% per annum
Intangible fixed assets
Intangible fixed assets represent capitalised software development costs and are amortized over 3 years.
Foreign currencies
Assets and liabilities in foreign currencies are translated into US Dollars at the rates of exchange ruling at the balance sheet date. Transactions in other currencies are translated into US Dollars at the rate of exchange ruling at the date of the transaction. Exchange differences are charged to the profit and loss account.
Turnover
Turnover comprises the following:
Sports betting:
the amount placed in respect of bets on sports, and other events which occurred and completed during the period.
Casino betting:
the amount of the net win from customers in the various casino products
Fee income:
the gross amount invoiced to customers of the fee income products
2.
Analysis of turnover
Pro forma
Pro forma
Pro forma
26 weeks
26 weeks
52 weeks
1 August
2004
3 August
2003
1 February
2004
US$ '000
US$ '000
US$ '000
Analysis of revenue by activity
Sports Betting
397,291
425,850
1,241,808
Casino Betting
1,964
2,519
6,803
Fee Income
4,162
1,406
3,717
403,417
429,775
1,252,328
Analysis of revenue by origin
America
402,110
426,391
1,245,892
Europe
1,307
3,384
6,436
403,417
429,775
1,252,328
3.
Reconciliation of Operating Profit to net cash inflow from operating activities
Pro forma
Pro forma
Pro forma
26 weeks
26 weeks
52 weeks
1 August
2004
3 August
2003
1 February
2004
US$ ‘000
US$ ‘000
US$ ‘000
Operating profit
4,251
4,020
26,790
Depreciation
731
664
1,682
Amortisation
680
591
964
Provision for the diminution in investments
-
-
120
(increase)/decrease in debtors
(1,296)
(13,134)
(3,877)
Incease/(decrease) in creditors
(857)
(1,625)
1,652
3,509
(9,484)
27,331
Analysis of change of net funds in year
opening cash at bank
28429
19370
19370
increase in cash during
30416
(10652)
9059
Closing cash at bank
58845
8718
28429
4.
Movements on reserves
US$ '000
Reserves as at 1 February 2004
12,300
Profit for the period
488
less minority share of net assets
as at 15 July 2004 see note below
(4127)
Reserves as at 1 August 2004
8661
This arises as the Group did not previously account for the minority interest in the Millennium group companies
5.
Profit and loss account for the 18 Days to 1 August 2004
In the 18 days from flotation to 1 August 2004, the Group recorded a turnover of $23.9m and gross profit of $1.2 m. If overheads, interest receivable and taxation are time apportioned, this period of trading results in a loss of $0.5m
6.
Earnings per share
Earnings per share are calculated on the basis the issued share capital of 81,147,541 were in existence throughout the periods under review.
For the 26 weeks ended the 1 August 2004, the fully diluted earnings per share would be 4.9 cents per share assuming that the options, granted on the 15th July had been in place throughout the period.
"
BetonSports should get an upgrade
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