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(Alliance News) - Webis Holdings PLC shares dropped on Tuesday after it announced it had swung to a loss in the first half of its financial year.
Webis' shares fell by 18% to 2.85 pence each in London on Tuesday afternoon.
The AIM-listed global gaming operator swung to a pretax loss of USD70,000 in the six months to November 30, down from a profit before tax of USD720,000 a year before.
Turnover for the half was down 8.5% to USD6.8 million, from USD7.4 million in the first half of financial 2021. Webis' financial year ends May 31.
Total amounts wagered for were down 12% year-on-year to USD39.9 million, from USD45.4 million. Webis noted that despite the downturn, its handle was 52% ahead of the same period in financial 2019.
Webis holds WatchandWager.com Ltd which operates an advanced deposit wagering racehorse platform, and WatchandWager.com LLC which holds licenses for the platform in the US, and also operates a racetrack in Sacramento, California.
Its business-to-consumer division performed well over the period, and contributed the majority of its gross margin. Webis said the business-to-business division's trading was as expected, but noted the landscape is "increasingly competitive", with new business hard to obtain during Covid.
Profit was "squeezed" as clients looked to improve their margins at Webis' expense, and its content suppliers looked to improve their revenue.
Webis said the Cal Expo racetrack was forced to remain closed for live operations over the summer, but generated "good levels of commission" from other operations in California. Since re-opening the track in November, Webis reported low attendance due to concerns about the Omicron variant, compounded by poor weather and an outbreak of equine flu.
Trading in the last two months has tracked "above the performance to date" Webis said, despite key tracks being closed due to poor weather, especially in the east coast of the US business.
"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," said Non-executive Chair Denham Enke.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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