Webis slips to loss as revenue declines in first half

Revenue for the six months through to 30 November amounted to $6.8m, which was down from $7.4m in the corresponding period in the 2021 financial year, while the amount bet by customers also fell 12.3% to $39.8m.

Webis put this drop down to a number of reasons, primarily that 2020 and the early months of 2021 were a unique period for the business and many other online gaming operations due to restrictions imposed to slow the spread of novel coronavirus (Covid-19).

For almost the entire period last year, Webis operated with either zero or highly restricted attendance at the key racetracks with which it does business. Webis said while this made its own track harder to operate, it did help its online and mobile platforms as players continued to wager, albeit on a more interactive basis. 

For the most recent six-month period, these trends have changed slightly, with increased competition for the leisure dollar and certain increases in our cost base, as consumers were able to return to racetracks following the easing of Covid-19 measures.

The Cal Expo Sacramento racetrack was forced to remain closed for live operations through the summer months and did not recommence harness racing until mid-November. Webis said ongoing concerns over Covid-19 will impact operations throughout the rest of the season.

Breaking down its revenue performance, racetrack operations generated $5.5m in revenue, down 6.8% year-on-year, while advance-deposit wagering revenue also fell 18.8% to $1.3m.

In terms of geographical performance, operations in North America led to $6.5m in revenue, split $5.5m for racetrack activity and $969,000 advance-deposit wagering. In Great Britain, the $296,000 reported in revenue came entirely from advance-deposit wagering.

However, despite the declines, Webis non-executive chairman Denham Eke said the group is pleased with its continued licensed position in the US and California, highlighting the state as a market of opportunity.

“Shareholders will note some very exciting developments in the legislation of sports wagering in the US and the potential for that to be approved in California towards the end of this year,” Eke said.

“This is a complex business and is commented upon in more detail below. However, we do believe that WatchandWager remains well positioned in California and indeed other states to maximise our competitive advantage. As a result of this we continue to review our strategic opportunities in the USA and California in particular.”

Looking at spending for the period and cost of sales was reduced 2.1% to $4.6m, though operating costs edged up 2.2% to $2.2m. After including $53m in betting duty, as well as $39,000 in other income, this left an operating loss of $8,000, compared to a profit of $784,000 in the previous year.

Webis also reported $62,000 in financial costs, meaning pre-tax loss amounted to $70,000, in contrast to a $721,000 profit in the first half of the 2021 financial year.

The operator did not pay any income tax during the period, which meant net loss remained at $70,000, compared to the $721,000 net profit posted in the previous year.

Webis also provided an update on its performance since the end of the half, saying while activity has been steady, seasonality impacted its content over the winter months with key tracks closed and other tracks being abandoned due to unfavourable weather conditions

“This particularly affects our east coast of the US business,” Eke said. “Notwithstanding, we continue to trade well, and our numbers track above our 2019-20 performance to date.

“Initial performance at Cal Expo was hampered by poor weather and an outbreak of equine flu on the facility. This impacts field sizes and numbers of races which will transfer to lower handle. 

“Overall, across all divisions, we expect an upturn in performance in the spring of 2022 and we are very focused on improving our handle and, most importantly, our margin derived from our activities and at the same time continuing to manage our cost base.”