Bullish Outlook For Betbull

Published: Saturday, December 09, 2006 Online-Casinos.com

BULLISH OUTLOOK FOR BETBULL

Good growth and healthy cash stash at European sportsbook


Reporting on progress over the 9 months to September 30 this week, the European-facing sportsbook Betbull.com recorded turnover of Euro 63.8 million and net gaming revenue of Euro 10.8 million, together with a healthy cash position of Euro 7.3 million and consistently positive free cash flow in Q3.

Turnover is up by 60 percent and Net Gaming Revenue up by 83 percent compared to the same period in 2005. Overall Betbull produced an EBITDA of Euro 0.58 million and made a loss after tax of Euro 1.81 million. This includes Euro 0.33 million options and warrant related charges. While the German retail betting business is producing a positive EBITDA the group's losses are mainly a result of start-up costs in Spain, restructuring costs in Gibraltar, legal and tax advisory costs as well as costs of business development in other European countries. The online offerings together are breaking even on an EBITDA-level.

Betbull has successfully completed its repositioning from a pure online gaming operator to a retail betting operator with a complementary online offering. 88 percent of turnover and 96 percent of NGR was produced by the company's retail betting outlets, and Internet activities to support retail business are now only of minor importance, the directors report.

The company expects its future growth to come predominantly from retail betting, although the online offerings of Betbull.com, Betbull.de and Primebet.com as well as telephone betting will be maintained as complementary offerings to retail customers

Betbull's expansion into promising Spanish betting market has been successfully commenced through a joint venture agreement with leading leisure and gaming group Orenes and a licence application for retail betting units in the newly liberated Italian market has been launched.

The company is less enthusiastic about the German market, where the legal situation remains unclear and poses substantial risks to sports betting units there.

Pointing out that October's turnover of Euro10.76 million is one of the highest monthly turnovers achieved to date, Betbull claims that the numbers highlight the potential in European retail betting markets, even under difficult regulatory circumstances.

The company's business is currently based on bookmaking licences in the UK, Austria, Malta, Germany (Federal States; horses only), and Spain (Andalucia; horses only).

Betbull has designed its systems and technology for a roll out throughout Europe. Retail and backend systems have been developed to support regional differences whilst risk management remains centralised across all platforms in real time. Retail "Live Betting" has been successfully launched and integrated into EPOS (Electronic Point Of Sale) and screen systems.

To raise additional capital for expansion, Betbull has sent out notice of an Extraordinary General Meeting to be held on 15 December. A resolution will be proposed at this meeting to authorise the Board of Directors to issue up to 2 000 000 new shares on a non-pre-emptive basis. This power will provide the Directors with the flexibility to raise finance to pursue new opportunities. The Directors are currently considering effecting a placing of up to 1 000 000 new shares in order to further develop the Spanish and Italian businesses.