Turnover for the six months to 31 November 2023 hit $5.9m (£4.7m/€5.4m). This was 4.8% behind the $6.2m reported in the previous year by Webis, which owns advance-deposit wagering (ADW) operator Watchandwager.com.
Eke and Webis put this drop mainly down to external factors in the second quarter. These, he said, included the cancellation of many US events due to bad weather in the country. On the flip side, Eke said trading was stronger during the summer months.
Turnover decline, coupled with the fact that spending remained level in H1, led to a wider loss for Webis. However, Eke is upbeat about the company’s performance moving into the second half.
“Our principal subsidiary, WatchandWager.com, again had a varied start to the first six months of the financial year,” Eke said. “I remain optimistic that trading will improve in line with expectations, especially as we continue with the roll-out of our new B2C marketing strategy.”
B2C beats market expectations for Webis
Analysing the H1 performance, Webis said its B2C division performed above expectations during the half. However, overall advanced deposit wagering market in the US fell 10.8% year-on-year. Webis said this decline was mainly due to the cost-of-living crisis, as well as the growth of other forms of gaming, primarily online sports betting.
Despite downward market trends, handle and active players on the platform remained steady. In addition, this sector now contributes over 80% of ADW gross margin.
As for B2B, Webis said while this remains important to the overall business, the market is “increasingly competitive”. It added that the margin derived from B2B was significantly lower than B2C.
In another development, Webis renewed and retained its entire portfolio of licences in the US and the Isle of Man.
“We consider our array of licences to continue to be a key asset to the group, in addition to content rights,” Eke said.
Net loss widens to $541,000
Turning to spending in H1, expenses were marginally lower across all areas, including cost of sales at $4.1m and betting duty paid at $48,000. Operating costs were reduced by 0.4% to $2.3m.
However, this was not enough to stop operating loss widening by 90.2% to $464,000 in H1. Webis also noted $77,000 in finance costs, leaving a pre-tax loss of $541,000, compared to $325,000 in the previous year.
Webis did not pay any tax in H1, meaning net loss was also $541,000, again higher than the $325,000 in 2022-23.
Webis identifies areas for growth
Looking ahead, Eke said the Webis board agrees it must focus on four key areas to achieve growth.
These include growing the B2C business platform in terms of player numbers and handle. This, Eke said, will improve margin for the business. Webis will also work to continue to grow its land-based licences at Cal Expo and potentially in other states.
Webis will also aim to provide third party services to existing and new entrants in the US. In relation to this, Webis will seek new opportunities in terms of the growing regulated market in the US.
“The larger operators, and also new entrants to the market, are looking for stable operations to either merge with or to acquire outright,” Eke said on this final point. “This is exactly what WatchandWager offers.
“The key executive has been instructed by the board to pursue these opportunities, if they are of benefit to shareholders. We will keep shareholders fully informed of developments in this area.”
Original article: https://igamingbusiness.com/finance/half-year-results/webis-upbeat-growth-prospects-despite-net-loss-h1/
