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: -0.04 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: -0.10 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.
1Net Turnover after trading fees as percent of Betting Turnover
INTERIM REPORT Q2 2013
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 2013. 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.
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.
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 118,965 354 0.30
Bookmaker 8,900 148 1.67
Total 127,865 502 0.39
PRODUCT DISTRIBUTION FOR 2013 Betting turnover (KEUR) Net turnover after fees (KEUR) Gross margin (%) Trading 265,544 494 0.19 Bookmaker 11,7017 282 1.65 Total 282,651 776 0.27
BETTING TURNOVER, KEUR
2011 2012 2013 Q1 229,011 175,179 154,786 Q2 159,793 170,589 127,865 Q3 160,516 159,829 Q4 195,819 185,854 Total 745,139 691,452 282,651
NET TURNOVER AFTER FEES, KEUR
2011 2012 2013 Q1 -439 278 274 Q2 826 843 502 Q3 379 802 Q4 1,171 1,654 Total 1,936 3,577 776
OPERATING INCOME, KEUR 2011 2012 2013 Q1 -1,210 -576 -556 Q2 159 3 -255 Q3 -328 -34 Q4 195 550 Total -1,184 -57 -811
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 2013. 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 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).
Transactions with Related Parties
Parent Company 30 Jun 31 Dec
2013 2012
Short Term Receivable
Betting Promotion Teknik Malmo AB 602 616
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.
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 2012. 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 30th June 2013.
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 2012.
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 2012.
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. 556466-8860
Peter Åström Jonas Ornstein
Chairman Member of the board and CEO
Niklas Braathen Greg Dingizian Member of the board 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.
Appendix
GROUP INCOME STATEMENT (KEUR)
2013 2012 2013 2012
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 60 73 109 130
Trading fees -303 -337 -674 -722
Other external expenses -301 -298 -649 -650
Staff expenses -444 -535 -900 -1,023
Depreciation -72 -79 -147 -152
Operating income -255 3 -811 -574
Financial net 1 -169 12 -137 -4
Income after financial items -424 15 -948 -578
Income taxes - - - -
Income for the period -424 15 -948 -578
Attributed to:
Equity Holders of the Parent Company -424 15 -948 -578
Gross margin (%) 0.39 0.49 0.27 0.32
Operating margin (%) -51 0 -105 -51
Earnings per share before & after dilution
(EUR) -0.04 0.00 -0.10 -0.06
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)
2013 2012 2013 2012
Apr-Jun Apr-Jun Jan-Jun Jan-Jun
Income for the period -424 15 -948 -578
Recalculation difference -7 1 -3 2
Total other comprehensive income for the period -431 16 -951 -576
Attributed to:
GROUP BALANCE SHEET (KEUR)
30 Jun 30 Jun 31 Dec
Note 2013 2012 2012
Assets
Intangible assets 1,285 1,334 1,314
Tangible assets 440 98 87
Financial assets 2 250 802 651
Deferred tax assets 208 295 208
Total non-current assets 2,183 2,529 2,260
Short-term receivables 2 898 796 804
Marketable securities - 3 3
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 -753 -752 -750
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 - 40 -
Current Liabilities 236 262 296
Total liabilities 236 302 296
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 2012 3,600 KEUR.
GROUP CASH-FLOW STATEMENT (KEUR)
2013 2012
Note Jan-Jun Jan-Jun
Income after financial items 4 -815 -584 Depreciation & gain/losses from disposal/sale of
fixed assets 149 161
Taxes -6 -
Cash flow from change in working capital -71 -261
Cash flow from operating activities -601 -684
Cash flow from investing activities 420 -63
Cash flow from financing activities - -
Cash flow for the period -1,021 -747
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)
2013 2012 2012
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 -951 -576 -112
PARENT COMPANY INCOME STATEMENT (KEUR)
2013 2012 2013 2012
Apr-Jun Apr-Jun Jan-Jun Jan-Jun
Net turnover 120 120 240 240
Other external expenses -84 -101 -164 -138
Staff expenses -10 -35 -26 -66
Depreciation - -0 - -0
Operating income 26 -16 50 37
Interest income and similar credits 0 9 19 10
Interest expense and similar credits -27 -12 -30 -14
Income after financial items -1 -19 39 33
Income taxes - - - -
Income for the period -1 -19 39 33
PARENT COMPANY BALANCE SHEET (KEUR)
30 Jun 31 Dec
2013 2012 Assets
Financial assets 11,373 11,367
Total non-current assets 11,373 11,367
Short-term receivables 736 709
Marketable securities - 3
Cash and bank accounts 42 68
Total current assets 778 780
Total assets 12,151 12,147
Shareholders’ equity and liabilities Restricted Capital
Share capital 2,136 2,136
Non-Restricted Capital
Share premium reserve 250 250
Retained earnings 9,708 9,861
Income for the period 39 -153
Total shareholders’ equity 12,133 12,094
Current liabilities 18 53
Total liabilities 18 53
