At today’s Annual General Meeting of betinternet, the Chairman, Mr Denham Eke, made the following statement regarding the Company’s current trading position:
- The company’s key activity indicators continue to grow. In the six weeks since the English Premier League season commenced, internet turnover was 34% greater than the same period last year. Registrations, which were 57,037 at the year-end, now exceed 62,000. However, the impact on margins explained below, will mean that even when restored to previously experienced levels, the outcome for the first half of the year will be materially below expectations.
- In the sports-book business, during the first quarter profitability has been impacted by two main factors:
- Margins since the start of the soccer season have been well below expectation. In addition, margins within the stand-alone telephone betting operation have shown considerable levels of volatility;
- 2003 has been the first summer since 1999, when there has not been a major soccer competition, and the Company’s turnover, during the summer, has been negatively impacted as expected.
A committee of the Board has been established to review the Company’s risk management strategy and operations, to ensure that the best possible risk systems are being used, to complement the increased turnover growth which has taken place during the past twelve months. Sports Gaming Limited, a respected consultancy to the gaming industry will provide specialist advice to the board on risk management ‘best-practice’.
In the Euro Off Track (“EOT”) business turnover levels have increased fourfold in the first quarter of the new financial year. New customers are largely of a business-to-business nature, and attract lower margins than those previously experienced. The Board is pleased to report that the joint venture has now achieved profitability, albeit at a modest, but growing level as we, and our partner, continue to invest in vital technical infrastructure and to build customer numbers.
In looking towards the remainder of the financial year, the expectations of the Board are that turnover levels will continue to grow, especially as following completion of our negotiations with the Isle of Man authorities, the Company is authorised to advertise in the UK market with effect from September 2003. Further, the board believes that margins will be restored to previous levels as the soccer season proceeds and the risk management profile is reviewed. Overall, the Board remains confident that the Company will achieve its goal of becoming one of the leading online global gaming companies.