- 54% growth in Bookmaker Betting Turnover compared to Q1 2012
- 1.50% Bookmaker Margin for Q2 2012
- Stable Trading Earnings for Q2 2012
April - June 2012
- Betting turnover: EUR 170,589 thousand (159,793)
- Net turnover after trading fees: EUR 842 thousand (826)
- Gross margin: 0.49% (0.52)
- Operating income: EUR 3 thousand (159)
- Operating margin: 0% (19)
- Net income: EUR 15 thousand (93)
- Earnings per share: EUR 0.0 (0.1)
January - June 2012
- Betting turnover: EUR 345,768 thousand (388,804)
- Net turnover after trading fees: EUR 1,121 thousand (386)
- Gross margin: 0.32% (0.10)1
- Operating income: EUR -574 thousand (-1,051)
- Operating margin: -51% (N/A)2
- Net income: EUR -578 thousand (-1,160)
- Earnings per share: EUR -0.06 (-0.12)
(1) Net Turnover after trading fees as percent of Betting Turnover
(2) Operating Income as percent of Net Turnover after trading fees
Managing Director Comments
"Earnings in the second quarter from product trading is satisfactory and in line with our long term expectations. Growth in the Bookmaker product is very pleasing as our strategy to market this product is paying off, "says Betting Promotion's CEO Johan Moazed.
Overview April – June 2012
Net Turnover after trading fees for the second quarter amounted to TEUR 842 (826). Betting Turnover for the second quarter amounted to TEUR 170 589 (159,793). This means that the second quarter shows a gross margin of 0.49% (0.52).
Trading
Net Turnover for Trading for the second quarter amounted to EUR 738 thousand (826). Betting Turnover for the second quarter amounted to EUR 163,594 thousand (159,793), representing an increase of 2% compared to the same period in 2011. This means that Trading for the second quarter shows a gross margin of 0.45% (0.52).
Trading refers to the turnover which is traded directly on Betting Exchanges with very small margins. The Product margin for the quarter is in line with the company's long-term expectations. The company is continuously working to optimize and improve the gaming models to achieve maximum profit. The product is the base of the company's operations and the foundation for being able to deliver a competitive product to the bookmakers. Late in the quarter, the European football championship was in focus. This kind of major sports event does not have a major contribution in Betting Turnover, but has the positive effect of raising interest in sports betting in general.
Bookmaker
Net Turnover for Bookmaker for the second quarter amounted to EUR 105 thousand (-). Betting Turnover for the second quarter amounted to EUR 6,995 thousand (-), representing an increase of 54% over quarter one 2012. This leads to a gross margin of 1.50% (-).
Bookmaker refers to the business where the company supplies odds to operators who in turn offer these prices to end consumers. This Product demonstrated an increase in Betting Turnover and stable margins. The company is continuously working to develop the product and increase the supply of game events. A clear trend in the market is that Live game continues to grow so that the company is working hard to expand the number of sports offered. During the second quarter, eleven clients contributed to the Betting Turnover in this product, while a number of operators have signed a contract and are expected to be part of the growing betting turnover for the next quarter. As opposed to the Trading Product, European Football Championship has contributed to a sharp increase in betting turnover during the period. Betting turnover in European Football Championship amounted to TEUR 1,537 representing 22% of the quarter turnover.
Overview January – June 2012
Net Turnover after trading fees for the first six months amounted to TEUR 1,121 (386). Betting Turnover amounted to TEUR 345,768 (388,804). This means that the period shows a gross margin of 0.32%(0.10).
Trading
Net Turnover from Trading in the first six months amounted to TEUR 940 (386). Betting Turnover amounted to TEUR 334,240 (388,804), representing an decrease of 14% over same period 2011. This means that trading in the first six months shows a gross margin of 0.28% (0.10).
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. The company is continuosly working to opitimize and improve the gaming models and forecast that this product would be sustainable.
Bookmaker
Net Turnover from Bookmaker product for the first six months amounted to TEUR 181 (-). Betting Turnover amounted to 11,529 TEUR (-), representing an increase of 90% compared to the second half of 2011. This means that the bookmaker in the first six months shows a gross margin of 1.57% (-).
The Bookmaker product continues to show good growth. Our efforts to promote this product have been successful. The margin achieved is in accordance with what is expected long term. Acquisition of customers is achieved both through direct contact with operators and through agreements with software suppliers. In the current situation several software vendors are in the process of integrating the product. These software vendors are working simultaneously to continuously improve their products and an important feature is the development of mobile solutions. The company sees strong demand for odds and risk management services in the market and together with technological developments, there are good opportunities to maintain a good growth in this product.
PRODUCT DISTRIBUTION FOR Q2
|
Betting turnover
(EUR Thousand) |
Net turnover
after fees (EUR Thousand) |
Gross margin
(%) |
|
| Trading | 163,594 | 738 | 0.45 |
| Bookmaker | 6,995 | 105 | 1.50 |
| Total | 170,589 | 843 | 0.49 |
PRODUCT DISTRIBUTION FOR 2012
|
Betting turnover
(EUR Thousand) |
Net turnover
after fees (EUR Thousand) |
Gross margin
(%) |
|
| Trading | 334,240 | 940 | 0.28 |
| Bookmaker | 11,529 | 181 | 1.57 |
| Total | 345,768 | 1,121 | 0.32 |
Betting turnover, EUR Thousand
| 2010 | 2011 | 2012 | |
| Q1 | 212,805 | 229,011 | 175,179 |
| Q2 | 211,600 | 159,793 | 170,589 |
| Q3 | 182,545 | 160,516 | |
| Q4 | 278,372 | 195,819 | |
| Total | 885,322 | 745,139 |
Net turnover After fees, EUR thousand
| 2010 | 2011 | 2012 | |
| Q1 | 806 | -439 | 278 |
| Q2 | 991 | 826 | 843 |
| Q3 | 1,416 | 379 | |
| Q4 | 968 | 1,170 | |
| Total | 4,181 | 1,936 |
Operating income, eur thousand
| 2010 | 2011 | 2012 | |
| Q1 | 239 | -1,210 | -576 |
| Q2 | 374 | 159 | 3 |
| Q3 | 656 | -328 | |
| Q4 | 147 | 195 | |
| Total | 1,416 | -1,184 |
Significant events during the period Annual General Meeting
Betting Promotion held its AGM on the 24 May 2012. It was decided that the number of board members shall be four. During the meeting Jonas Ornstein was re-appointed and Peter Åström, Niklas Braathen and Greg Dingizian were elected as new members. Greg Dingizian 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 Chairmain
SEK 50,000 to the other board members
SEK 50,000 to the Chairman of the Audit Committee
SEK 25,000 to the other members of the Audit Committee
Amendment of Articles of Association
At the AGM of the company May 24, 2011 it was decided that the company shall have the euro as an accounting currency and for the Articles of Association to be amended. Thus the below amendments were registered with the companies registration Office;
Previous Articles of Association:
The share capital shall be not less than SEK 15 million and not more than SEK 60 million.
New Articles of Association:
The share capital shall be not less than EUR 1,683,124 and not more than EUR 6,732,496.
Board of Directors
At the Annual General Meeting of Betting Promotion Sweden AB May 24, 2012, Jonas Ornstein, Niklas Braathen, Greg Dingizian (Chairman) and Peter Åström were elected as board members. It was later established that Peter Åström cannot be registered as a board member of Betting Promotion due to limitations in a previous commitment to another party. The Board of Directors in Betting Promotion Sweden AB now consists of Jonas Ornstein, Niklas Braathen and Greg Dingizian (Chairman).
Key Quest
As at 31 March 2012, receivable from Key Quest Ltd amounted to TEUR 113. During May 2012 Betting Promotion’s previous board has agreed with Key Quest on the new payment terms of the outstanding balance. Key Quest Ltd shall pay the balance by yearly payments of SEK 0.2 million with the first payment due in 2012 and the latest payment due by 31st December 2016.
CEO
Betting Promotion's CEO Johan Moazed, has tendered his resignation to the Board on the 4th of April 2012. Johan has accepted to remain in office until the end of this year as both the board and Johan Moazed agreed that this is in the best interest of the company. Johan Moazed is a major shareholder and director of Betting Promotion, promising that Johan has every reason to ensure that his successor will have the best conditions for taking over the CEO role. The Board has appointed a working group to recruiting a new CEO.
Outlook for 2012
Betting Promotion’s policy is not to issue earnings forecasts.
Equity
The group’s equity as at 30 June 2012 was EUR 7,849 thousand (8,326), which is equivalent to EUR 0.82 (0.87) per share.
Cash and Cash flow
Cash and Cash equivalents at the end of the year amounted to EUR 4,823 thousand (5,737). Cash flow for the period amounted to EUR -747 thousand (-1,729). Operating cash flow amounted to EUR -684 thousand (-1,084). Cash held with licensed customers amounted to EUR 4,577 (4,079).
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 EUR 240 thousand (258).
Transactions with Related Parties
| Parent Company | 30 June | 31 Dec |
| 2012 | 2011 | |
| Short Term Receivable | ||
| Betting Promotion Teknik Malmo AB | 655 | 126 |
| Betting Promotion Holdings Ltd | 56 | 391 |
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.
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 the Annual Report for 2011. None of the new and changed standards from IFRS, applicable from 1st of January 2012, has had any effect on the Financial Statements as at 30th June 2012.
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 2011.
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 2011.
Financial information 2012:
Interim report Q3 12 Nov 2012
End of Year Report 24 Feb 2013
Board assurance
The Board of Directors and managing director 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 2012
Betting Promotion Sweden AB (publ)
Org. nr. 556466-8860
Greg Dingizian
Chairman
Johan Moazed
Managing director
Jonas Ornstein
Member of the board
Niclas Braathen
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 full report, see attached file)
For further information please contact:
Johan Moazed, Managing director of Betting Promotion Sweden AB.
Telephone +46 40 611 84 94