Webis Holdings plc
Global Gaming Group
Annual Report and Consolidated Financial Statements for the year ended 31 May 2024
AIM Stock Code: WEB
Webis Holdings plc
1
Contents
Our Performance
2
Group at a Glance
3
Chair’s Statement
6
Group Gaming Licences
Our Governance
7
The Board of Directors
8
Directors’ Report
10
Corporate Governance Statement
14
Audit, Risk and Compliance Committee Report
15
Statement of Directors’ Responsibilities
16
Report of the Remuneration Committee
Our Financials
18
Independent Auditor’s Report
24
Consolidated Statement of Comprehensive Income
25
Statements of Financial Position
26
Statements of Changes in Equity
27
Consolidated Statement of Cash Flows
28
Notes to the Financial Statements
Shareholder Information
54
Company Information
Webis Holdings plc
2
Group at a Glance
Webis Holdings plc (the “Company”) and its subsidiary
companies (together the “Group”) operates two primary
segments: -
WatchandWager.com Ltd and WatchandWager.com LLC
– Advanced Deposit Wagering (“ADW”)
WatchandWager.com LLC
– Cal Expo Harness Racetrack
WatchandWager.com Ltd is regulated in the Isle of Man
and operates a totalisator wagering hub through its United
States Tote supplier, which enables it to conduct its ADW
business by passing wagers directly into global racetrack
betting pools in real time.
WatchandWager.com LLC has its operational base in
Lexington, Kentucky, with its head office in Larkspur,
California, and provides pari-mutuel wagering, or pool-
betting, services through a number of distribution channels to
a global client base. The company holds United States pari-
mutuel licences for its ADW business in the USA, including a
multi-jurisdictional licence issued by the States of North
Dakota, and individual licences for the States of California,
Maryland, Colorado, Minnesota, New York, Washington and
Kentucky. The business provides wagering opportunities
predominantly on horse and greyhound racing and has
contracted with a significant number of prestigious racetrack
partners within the United States, Hong Kong, France,
Canada, United Kingdom, Ireland, and Australia amongst
others. It provides wagering facilities to customers through its
interactive website, watchandwager.com, as well as offering
a business-to-business wagering product.
WatchandWager.com LLC also operates Cal Expo Harness
Racetrack in Sacramento, California, under a licence issued
by the California Horse Racing Board. This ‘bricks and
mortar’ presence in the largest State economy in the USA
continues to provide leverage for our related global pari-
mutuel operations.
As part of the requirements for the Isle of Man licence, client
funds for the Isle of Man licensed companies are held in fully
protected segregated client accounts within an Isle of Man
regulated bank.
Webis Holdings plc
3
Chair’s Statement
Introduction
As reported in the 2023/24 Interim Report released in
February 2024, it has been a difficult year of trading for our
principal subsidiary, WatchandWager.com LLC in the USA.
Following our statement in February, whilst business has
improved it has not reached the targets for which we were
aiming. There are many reasons for this which are outlined
later in this report.
Funding Update
Shareholders will note the additional funding for the
Company from our principal shareholder, which has now
been signed with Galloway Limited (a related party) and was
released to the markets on 18 November 2024.
Circular re delisting of Webis (WEB) from AIM
Shareholders will also note the Circular and Statement
regarding the above, released on 22 November 2024,
entitled “Proposed cancellation of admission of Ordinary
Shares to trading on AIM and Notice of General Meeting”.
This document is important and requires shareholders
immediate attention.
Following an in-depth review, the Board has unanimously
agreed that it is in the best interests of the Company and its
Shareholders to delist from AIM. The Company continues to
believe WatchandWager has a unique position in the USA as
one of the top five licensed operators in our sector and the
Board believes that the Cancellation will reduce costs and
protect shareholder value as the Group seeks to grow its
business in North America and deliver on strategic goals.
In reaching this conclusion, the Board has considered the
following key factors:
(a) the significant cost savings to be achieved by the
Cancellation;
(b) the Directors do not believe that the Company’s
share price reflects the underlying value of the
Company’s assets (most notably, the value of
certain licenses owned by the Group);
(c) the free float of the Company is only 36.9 per cent.
and trading volumes in respect of the Shares are
very low and this illiquidity prevents Shareholders
from trading in meaningful volumes or with any
frequency;
(d) the Company has not utilised its admission on AIM
to
raise
fresh
capital or
issue
Shares
as
consideration to fund acquisitions since January
2013;
(e) the
Company
remains
reliant
on
its
major
shareholder, Mr Mellon, for funding to meet its
ongoing working capital needs and despite several
efforts it has been unable to attract capital on
acceptable terms from third party investors, in
particular through equity issues on AIM;
(f) the management time and the legal and regulatory
burden associated with maintaining the Company’s
admission to trading on AIM is, in the Directors’
opinion, disproportionate to the benefits to the
Company; and
(g) the Directors believe that trading of the Ordinary
Shares on AIM significantly inhibits flexibility of the
business.
Strategy
We are aware that the Company continues to retain key
assets in the USA, particularly in California where we are
licensed and run live racetrack and advanced deposit
wagering operations.
Also, we have multiple other licenses in the USA, as
mentioned in this report, and we hold the largest number of
content license agreements of any advance deposit
wagering company globally.
Whilst our market capitalisation at time of writing is very low,
we plan to use these assets for business development for
those interested in entering the USA gaming market. In
addition, we believe our platform and unique positioning is
attractive to potential partners or even merger and
acquisition opportunities, especially post the delisting, if
approved.
The point is that for a new entrant to enter the USA market, it
would cost them significant sums of money. As shareholders
are aware, the USA gaming market continues to be the land
of opportunity, and we find that our platform and positioning
are of interest to some of the key players in the market. We
will keep shareholders fully informed on progress on these
strategic matters.
Year End Results Review
The Group amounts wagered for the year ended 31 May
2024 were US$ 110.5 million (2023: US$ 113.4 million).
Gross Profit reported was US $ 4.4 million (2023: US$ 4.6
million).
Operating costs were consistent with last year at US$ 5.5
million (2023: US$ 5.5 million).
This resulted in a loss on the year of US$ 1.063 million, a
downturn on the 2023 loss of US$ 0.745 million.
Shareholder equity stands at US$ (0.5) million (2023: US$
0.6 million). Total cash stands at US$ 3.4 million (2023: US$
3.3 million), which includes ring-fenced funds held as
protection against our player liability as required under USA
and Isle of Man gambling legislation.
Approach to Risk and Corporate Governance
As part of the adoption of the Quoted Companies Alliance
Corporate Governance code in 2018, the Board completed
an assessment of the risks inherent in the business and
defined and adopted a statement of risk appetite, being the
amount and type of risk, it is prepared to seek, accept, or
tolerate in pursuit of value. This being: -
“The Group’s general risk appetite is a moderate, balanced
one that allows it to maintain appropriate growth, profitability
and scalability, whilst ensuring full regulatory compliance.”
Webis Holdings plc
4
Chair’s Statement continued
Approach to Risk and Corporate Governance continued
The Group’s primary risk drivers include: -
Strategic
Reputational
Credit
Operational
Market
Liquidity, Capital, and Funding
Regulatory and Compliance
Conduct
Our risk appetite is classified under an “impact” matrix
defined as Zero, Low, Medium, and High. Appropriate steps
are implemented to ensure the prudential control monitoring
of risks to the Group and the Audit, Risk and Compliance
Committee oversees this essential requirement. Further
details of the Corporate Governance Statement will be found
on pages 10 to 13 of this report and should be read in
conjunction with my report.
The Board refined the Group’s business plan which
incorporates the risk and compliance framework.
Performance by Sector
WatchandWager
Business-to-Consumer
www.watchandwager.com/mobile
Overall, we have been pleased with the performance in this
sector which is of course wagering through our principal
website and mobile product. We have been hampered by
poor weather conditions which created an unprecedented
number of racetrack cancellations. This seems to be the new
global norm and is now something that we need to allow for.
We have also seen an increasing level of competitor activity
due to the growing legalisation of sports betting in multiple
states in the USA. We are seeing some of the big operators
simply burning money to recruit and retain new players. This
is something with which we cannot reasonably compete.
That said, whilst competitor activity has created problems for
our financial results, it creates an opportunity for us from a
strategic perspective. Most of the major USA operations are
paying large sums on cost per acquisition. What is
interesting is that these operators are increasingly looking to
horse racing products to stabilise their operations. This
leaves our operation attractive to new investment as external
companies are concerned about missing out on these
gaming opportunities.
We continue to invest in our own website and mobile product
so that we have the best-in-breed site for future marketing
and investment opportunities.
Business-to-Business
This sector has performed in line with expectations with a
steady flow of commissions from our key customers. That
said, the margins continue to decrease in this sector due to
increased costs from partner tracks and indeed regulatory
authorities. We will continue to serve the sector and
maximise revenue as best as possible, but only with a strict
attention to regulatory compliance.
Cal Expo
We had a good season of racing at our racetrack at Cal Expo
Sacramento and we expect to continue to operate this track
in a profitable manner.
This year, we have decided to slightly adjust our racetrack
programme so that we work more proactively with other
California tracks. As a result, we plan to race from early
December 2024 to May 2025 with a planned number of 39
race nights over the season.
Cal Expo continues to be a key asset to the Company. As a
reminder to shareholders, we have a long-term contract with
our landlord, who are the Californian State, until 2030.
Key risk factors
During the period we have updated our Risk Assessment
procedures and will continue to do so. The Board conducts
regular risk assessments on a micro and macro level.
Licenses
During the period reported, all of our licenses are active both
in the Isle of Man and the USA. Particularly in the USA, we
fully expect all our renewals to be approved before the end
of 2024, going into 2025 and beyond.
Content
As mentioned, WatchandWager continues to offer the widest
range of global content to its customers of any licensed
advance
deposit
wagering
globally.
All
our
content
agreements, both domestic USA and international, are up to
date through 2024, and we fully expect that to be extended
into 2025 and beyond.
Compliance
There were no compliance issues across the entire operation
during the period reported.
Health & Safety
There were no Health and Safety issues across the entire
operation during the period reported.
Outlook
This has been reported upon in the circular regarding the
delisting of Webis. Further updates will be supplied to
shareholders when we have more details.
Webis Holdings plc
5
Chair’s Statement continued
Board Appointments
We were pleased to appoint our principal shareholder, Jim
Mellon, to the Board in July 2024. Alongside other Board
members, he will provide excellent insight into the strategy of
the business.
Other Business Developments
USA Expanded Gaming
Whilst we were disappointed by the last failure to legalise
sports betting in California, primarily created by the Native
American Tribal Casino groups stalling the process, we are
aware that there are now significant discussions about a
more open bill to be put through the Capitol no later than
2026. Of course, with our positioning as a licensed operator
and racetrack in Sacramento, we will be pushing for the new
legislation as hard as possible.
Historical horseracing machines
Related to the above, we are very encouraged by the
potential for historical horse racing machines to be licensed
in California in the near future. The machines are pari-mutuel
in nature and therefore would fall within the remit of our
wagering licenses in the State. We are fully involved in
lobbying to make this project a reality, and we will update
shareholders as soon as we know more details. Looking at
the results of these terminals in other states, particularly in
Kentucky, if we were licensed to operate them this would be
a significant game changer for the Company.
Acquisitions and Mergers
We consider the decision to delist the Company from AIM
will make the Company more attractive for potential
partnerships, mergers, and acquisitions, most likely within
the USA. We will keep shareholders fully informed of any
developments in this area.
Summary
Finally, I would like to thank all our shareholders and
customers for their continued loyalty to the Company. In
addition, I would like to thank all our staff and team for their
work and commitment to the business over the year.
Denham Eke
Non-executive Chair
28 November 2024
Webis Holdings plc
6
Group Gaming Licences
Webis Holdings plc
Isle of Man Gambling Supervision Commission
WatchandWager.com Ltd
Isle of Man Gambling Supervision Commission
WatchandWager.com LLC - Advanced Deposit Wagering
Multi-jurisdictional
California Horse Racing Board
North Dakota Racing Commission
State by State
California Horse Racing Board
Colorado Division of Racing Events
Kentucky Horse Racing Commission
The Maryland Jockey Club
Minnesota Racing Commission
New York State Gaming Commission
North Dakota Racing Commission
Washington Horse Racing Commission
WatchandWager.com LLC - Cal Expo Harness Racing
California Horse Racing Board
Webis Holdings plc
7
The Board of Directors
Denham Eke, aged 73
Non-executive Chair
Denham
Eke
began
his
career
in
stockbroking before moving into corporate
planning for a major UK insurance broker.
He is a Director of many years’ standing of
both public and private companies involved
in the mining, leisure, manufacturing, and
financial services sectors.
Denham Eke was appointed Non-executive
Chair in April 2003.
Ed Comins, aged 55
Managing Director
Ed Comins has 30+ years’ experience in the
betting and gaming industry with Coral,
Ladbroke
Casinos,
the
Tote
and
GameAccount. At the Tote he had overall
responsibility for developing Totepool’s pari-
mutuel business as General Manager of
Tote Direct and Development Director for
Totepool. He was Commercial Director for
GameAccount, a provider of online skill
games, where he managed betting partner
relationships with key sportsbooks.
Ed Comins joined the Board in May 2010.
Richard Roberts, aged 60
Non-executive Director
Richard Roberts has served in executive and
board positions over the past 25 years in the
online gaming and betting industries, leading
US digital operations in iGaming, ADW and
fantasy sports markets. In his current
position, he is the President of Digital
Gaming
for
Mohegan
Gaming
and
Entertainment.
Richard Roberts joined the Board in April
2021.
Katie Errock, aged 37
Non-executive Director
Ms Errock, currently Company Secretary for
the Group and its subsidiary companies, has
extensive
experience
in
compliance,
regulation, and corporate governance. She is
an associate of the Chartered Institute for
Securities and Investment. Ms Errock is also
the Company Secretary for a number of
other companies controlled by Burnbrae
Group Limited, an entity wholly owned by
Webis’ principal shareholder, Jim Mellon.
Katie Errock joined the Board in August
2022.
Jim Mellon, aged 67
Non-executive Director
Jim Mellon is a well-known entrepreneur,
investor and author. He started his career in
fund
management
and
now
includes
biopharma, property, mining and information
technology amongst his many investments.
Jim holds directorships in a number of
companies, both quoted and unquoted,
including the Chair of Juvenescence Limited,
as well as being a Non-executive Director of
Agronomics Limited. He is the beneficial
owner and Chair of Burnbrae Group Limited
and holds, in the name of Burnbrae Limited,
63.10% of the shares in Webis Holdings
PLC.
Jim Mellon joined the Board in July 2024.
Webis Holdings plc
8
Directors’ Report
The Directors present their annual report and the audited
consolidated financial statements for the year ended 31 May
2024.
Principal activities
The Group operates:
•
a pari-mutuel service to individual and business
customers; and
•
a racetrack under a licence issued in California,
USA.
Business review
The Group operates on a worldwide basis and provides
online and offline facilities in respect of a wide variety of pari-
mutuel events.
A more detailed review of the business, its results and future
developments is in the Chair’s Statement on pages 3 to 5.
Proposed dividend
The Directors do not propose the payment of a dividend
(2023: US$ Nil).
Policy and practice on payment of creditors
It is the policy of the Group to agree appropriate terms and
conditions for its transactions with suppliers by means of
standard written terms to individually negotiated contracts.
The Group seeks to ensure that payments are always made
in accordance with these terms and conditions.
At the year-end there were 17 days (2023: 18 days) of
purchases in trade creditors.
Financial risks
Details relating to financial risk management are shown in
note 20 to the financial statements.
Directors and Directors’ interests
The Directors who held office during the year and to date
were as follows:
Denham Eke
Non-executive Chair
Ed Comins
Managing Director
Sir James Mellon
Non-executive Director (until 5 July
2023)
Richard Roberts
Non-executive Director
Katie Errock
Non-executive Director
Jim Mellon
Non-executive Director (appointed
10 July 2024)
The Directors who held office at the end of the year had the
following interests in the ordinary shares of the Company
and options to purchase such shares arising from incentive
schemes:
Directors’ interests
Ordinary shares
Options
Interest
at end of
year
2024
Interest at
start of
year
2023
Interest
at end of
year
2024
Interest at
start of
year
2023
Denham Eke 1
—
—
—
—
Ed Comins
—
—
14,000,000
14,000,000
Richard Roberts
—
—
—
—
Katie Errock
—
—
—
—
1 Denham Eke is Managing Director of Burnbrae Limited which holds 248,204,442 ordinary shares representing 63.10% of the
issued capital of the Company.
Further details of the options issued to the executive Directors are contained in the Report of the Remuneration Committee on
pages 16 and 17.
Webis Holdings plc
9
Directors’ Report continued
Substantial interests
On 28 August 2024, the following interests in 3% or more of the Company’s ordinary share capital had been reported:
%
Number of
ordinary
shares
Burnbrae Limited
63.10
248,204,442
Employees
The Group is committed to a policy of equal opportunity in
matters relating to employment, training, and career
development of employees, and is opposed to any form of
less favourable treatment afforded on the grounds of
disability, sex, race, or religion.
The
Group
recognises
the
importance
of
ensuring
employees are kept informed of the Group’s performance,
activities, and future plans.
Political and charitable contributions
The Group made no political contributions during the year.
As part of the obligations of the pari-mutuel business in the
United States, the Group made charitable contributions of
US$ 32,244 during the year (2023: US$ 29,985).
Auditors
KPMG Audit LLC, being eligible, have expressed their
willingness to continue in office in accordance with Section
12(2) of the Isle of Man Companies Act 1982.
On behalf of the Board
Denham Eke
Non-executive Chair
28 November 2024
Webis Holdings plc
10
Corporate Governance Statement
Corporate Governance Report
The Board of Webis Holdings plc (the “Board”) is committed
to best practice in corporate governance throughout Webis
Holdings plc and all subsidiary companies (together the
“Group”). The Directors have agreed to comply with the
provisions of the Quoted Companies Alliance (“QCA”)
Corporate Governance Code for Small and Mid-Size Quoted
Companies (2018) to the extent which is appropriate to its
nature and scale of operations. This report illustrates how the
Group complies with those principles.
QCA Principle 1: Establish a strategy and business
model which promotes long-term value for shareholders
The strategy and business operations of the Group are set
out in the Chair’s Statement on pages 3 to 5.
The Group’s strategy and business model and amendments
thereto, are developed by the Managing Director and his
senior management team and approved by the Board. The
management team, led by the Managing Director, is
responsible for implementing the strategy and managing the
business at an operational level.
The Group’s overall strategic objective is to develop a
profitable, sustainable advance deposit wagering (“ADW”)
platform that benefits from a wide and diverse client base,
both business and retail. The Group operates through two
principal operating subsidiaries: WatchandWager.com Ltd
and WatchandWager.com LLC.
WatchandWager.com Ltd is regulated in the Isle of Man and
operates a totalisator wagering hub through its United States
Tote supplier, which enables it to conduct its ADW business
by passing wagers directly into global racetrack betting pools
in real time.
WatchandWager.com LLC has its operational base in
Lexington, Kentucky, with its head office in Larkspur,
California,
and
provides
pari-mutuel,
or
pool-betting,
wagering services through a number of distribution channels
to a global client base. The Company holds United States
pari-mutuel licences for its ADW business in the US, issued
by North Dakota, California, Kentucky, Minnesota, New York,
Washington, Maryland and Colorado. The business provides
wagering
opportunities
predominantly
on
horse
and
greyhound racing and has contracted with a significant
number of prestigious racetrack partners within the United
States, Hong Kong, France, Canada, United Kingdom,
Ireland, and Australia amongst others. It provides wagering
facilities
to
customers
through
its
website,
watchandwager.com, as well as offering a business-to-
business wagering product.
WatchandWager.com LLC also operates Cal Expo Harness
Racetrack in Sacramento, California, under a licence issued
by the California Horse Racing Board. This ‘bricks and
mortar’ presence in the largest State economy in the US
continues to provide leverage for our related global pari-
mutuel operations.
The Group also plans to develop a licensed US-based
sportsbook offering following the US Supreme Court ruling
which paved the way to legalizing wagering on sports in the
United States, subject to individual State legislation. This will
probably be developed in partnership with one or more major
operators and suppliers in the sector. The Group considers
this market to be a significant growth area for our US
operations. There are also still a number of California draft
Sports Betting Bills being debated, which specify that only
existing land-based operators in the State will be eligible for
license applications, in our case through the Cal Expo,
Sacramento, CA racetrack facility. In the United States,
WatchandWager.com LLC holds ADW licenses not only for
California, but also for North Dakota (providing regulated
access to a total of 24 states), together with the previously
mentioned individual State licenses.
The Group operates in an inherently high risk and heavily
regulated sector, and this is reflected in the principal risks
and uncertainties.
In executing the Group’s strategy and operational plans,
management will typically confront a range of day-to-day
challenges associated with these key risks and uncertainties
and will seek to deploy the identified mitigation steps to
manage these risks as they manifest themselves.
QCA Principle 2: Seek to understand and meet
shareholder needs and expectations
The Group via the Managing Director seeks to maintain a
regular dialogue with both existing and potential new
shareholders in order to communicate the Group’s strategy
and progress and to understand the needs and expectations
of shareholders.
Beyond the Annual General Meeting, the Managing Director
and, where appropriate, other members of the senior
management team or Board will meet with investors and
analysts to provide them with updates on the Group’s
business and to obtain feedback regarding the market’s
expectations of the Group.
The Group’s investor relations activities encompass dialogue
with both institutional and private investors. From time to
time, the Company attends private investor events, providing
an
opportunity
for
those
investors
to
meet
with
representatives from the Group in a more informal setting.
QCA Principle 3: Take into account wider stakeholder
and social responsibilities and their implications for
long-term success
The Group is aware of its corporate social responsibilities
and the need to maintain effective working relationships
across a range of stakeholder groups. These include the
Group’s employees, clients, partners, suppliers, regulatory
authorities, and horseracing colleagues involved in the
Group’s track facility at Cal Expo. The Group’s operations
and working methodologies take account of the need to
balance the needs of all of these stakeholder groups while
maintaining focus on the Board’s primary responsibility to
promote the success of the Group for the benefit of its
members as a whole. The Group endeavours to take
account of feedback received from stakeholders, making
amendments to working arrangements and operational plans
where appropriate and where such amendments are
consistent with the Group’s longer-term strategy.
The Group takes due account of any impact that its activities
may have on the environment and seeks to minimise this
impact wherever possible. Through the various procedures
and systems, it operates, the Group ensures full compliance
with Health and Safety and environmental legislation relevant
to its activities.
Webis Holdings plc
11
Corporate Governance Statement continued
QCA Principle 4: Embed effective risk management,
considering both opportunities and threats, throughout
the organisation
The Board is responsible for the systems of risk
management and internal control and for reviewing their
effectiveness. The internal controls are designed to manage
rather than eliminate risk and provide reasonable but not
absolute assurance against material misstatement or loss.
Through the activities of the Group Audit, Risk and
Compliance Committee, the effectiveness of these internal
controls is reviewed annually.
A comprehensive budgeting process is completed once a
year and is reviewed and approved by the Board. The
Group’s results, compared with the budget, are reported to
the Board on a monthly basis.
The Group maintains appropriate insurance cover in respect
of actions taken against the Directors because of their roles,
as well as against material loss or claims against the Group.
The insured values and type of cover are comprehensively
reviewed on a periodic basis.
The senior management team meets at least monthly to
consider new risks and opportunities presented to the Group,
making recommendations to the Board and/or Group Audit,
Risk and Compliance Committee as appropriate.
QCA Principle 5: Maintain the board as a well-
functioning, balanced team led by the Chair
The Group’s Board currently comprises four Non-executive
Directors and one Executive Director.
All of the Directors are subject to election by shareholders at
the first Annual General Meeting after their appointment to
the Board and will continue to seek re-election at least once
every three years.
The Board is responsible to the shareholders for the proper
management of the Group and meets at least four times a
year to set the overall direction and strategy of the Group, to
review operational and financial performance and to advise
on management appointments. All key operational decisions
are subject to Board approval.
Non-executive Director, Richard Roberts, is considered to be
independent. The other Non-executive Directors are not
considered to be independent given their connection to the
Company’s controlling shareholder. The QCA Code suggests
that a board should have at least two independent Non-
executive Directors. The Board considers that the current
composition and structure of the Board of Directors have
been appropriate to maintain effective oversight of the
Group’s activities to date. However, the Board is aware that
further
oversight
through
independent
Non-executive
Directors could be beneficial to the governance environment.
This process is under review and is pending the further
development of business opportunities in the US in order to
be able to determine the exact need and requirements.
Non-executive Directors receive their fees in the form of a
basic cash emolument. The Executive Director receives a
basic cash salary and also holds options over the Group’s
shares. The number and terms are set out on pages 16 and
17.
The option grant concerned is not deemed to be significant
for
the
individual
Executive
Director.
The
current
remuneration structure for the Board’s Executive and Non-
executive Directors is deemed to be proportionate.
QCA Principle 6: Ensure that between them the Directors
have the necessary up-to-date experience, skills and
capabilities
The Board considers that all of the Executive and Non-
executive Directors are of sufficient competence and calibre
to add strength and objectivity to its activities and bring
considerable experience in the operational and financial
development of gambling and horseracing companies.
The Directors’ biographies are set out on page 7.
The Board regularly reviews the composition of the Board to
ensure that it has the necessary breadth and depth of skills
to support the ongoing development of the Group. Whilst
there is no Finance Director on the Board, the overview of
the finance function is the responsibility of a non-Board
Financial Controller.
The Chair, in conjunction with the Company Secretary,
ensures that the Directors’ knowledge is kept up to date on
key issues and developments pertaining to the Group, its
operational environment and to the Directors’ responsibilities
as members of the Board. During the course of the year,
Directors received updates from the Company Secretary and
various external advisers on a number of corporate
governance matters.
Directors’ service contracts or appointment letters make
provision for a Director to seek personal advice in
furtherance of his or her duties and responsibilities, normally
via the Company Secretary.
QCA Principle 7: Evaluate board performance based on
clear and relevant objectives, seeking continuous
improvement
Internal evaluation of the Board, the Committees and
individual Directors is undertaken on an annual basis in the
form of peer appraisal and discussions to determine their
effectiveness and performance as well as the Directors'
continued independence.
The results and recommendations that come out of the
appraisals for the Directors shall identify the key corporate
and financial targets that are relevant to each Director and
their personal targets in terms of career development and
training. Progress against previous targets is also assessed
where relevant.
The Board may utilise the results of the evaluation process
when considering the adequacy of the composition of the
Board and for succession planning.
Webis Holdings plc
12
Corporate Governance Statement continued
QCA Principle 8: Promote a corporate culture that is
based on ethical values and behaviours
The Board seeks to maintain the highest standards of
integrity and probity in the conduct of the Group’s operations.
These values are enshrined in the written policies and
working practices adopted by all employees in the Group. An
open culture is encouraged within the Group, with regular
communications to staff regarding progress and staff
feedback regularly sought. The Executive Management
regularly monitors the Group’s cultural environment and
seeks to address any concerns that may arise, escalating
these to Board level as necessary.
The Group is committed to providing a safe environment for
its staff and all other parties for which the Group has a legal
or moral responsibility in this area. The Group’s Health and
Safety policies and procedures are enshrined in the Group’s
documented quality systems, which encompass all aspects
of the Group’s day-to-day operations.
QCA Principle 9: Maintain governance structures and
processes that are fit for purpose and support good
decision- making by the board
The Role of the Board
The Board is collectively responsible for the long-term
success of the organisation. Its principal function is to
determine the strategy and policies of the Group within an
effective control framework which enables risk to be
assessed and managed.
The Board ensures that the necessary financial and human
resources are in place for the Group to meet its objectives
and that business and management performances are
reviewed. Furthermore, the Board ensures that the Group
operates within its constitution, relevant legislation and
regulation and that proper accounting records and effective
systems of business control are established, maintained,
documented, and audited.
There are at least four formal Board meetings each year. All
Board members have the benefit, at the Group’s expense, of
liability insurance in respect of their responsibilities as
Directors and have access to independent legal or other
professional advice if required. The Board has a formal
schedule of matters which are reserved for its consideration,
and it has established three committees to consider specific
issues in greater detail, being the Group Audit, Risk and
Compliance, Remuneration and Nomination Committees.
The Terms of Reference for each of these Committees are
published on the Group’s website.
The Chair
The Chair is responsible for leading the Board, ensuring its
effectiveness in all aspects of its role, promoting a culture of
openness of debate, and communicating with the Group’s
members on behalf of the Board. The Chair sets the direction
of the Board and promotes a culture of openness and debate
by facilitating the effective contribution of Non-executive
Directors and ensuring constructive relations between
Executive and Non-executive Directors. The Chair also
ensures that Directors receive accurate, timely and clear
information. In doing so, this fosters a positive corporate
governance culture throughout the Group.
The Managing Director
The Managing Director is responsible for managing the
Group’s business and operations within the parameters set
by the Board.
Non-executive Directors
The Non-executive Directors are responsible for bringing
independent judgement to the discussions held by the
Board, using their breadth of experience, and understanding
of
the
business.
Their
key
responsibilities
are
to
constructively
challenge
and
contribute
to
strategic
proposals, and to monitor performance, resources, and
standards of conduct, compliance, and control, whilst
providing support to executive management in developing
the Group.
The Board has established a Group Audit, Risk and
Compliance
Committee
(“ARCC”
or
“Committee”),
a
Remuneration Committee and a Nominations Committee
with formally delegated duties and responsibilities. Richard
Roberts chairs both the ARCC and the Remuneration
Committee.
Group Audit, Risk and Compliance Committee
The ARCC meets at least two times each year and
comprises two Non-executive Directors, currently Richard
Roberts (Committee Chair) and Denham Eke. The external
auditors attend by invitation. Its role is to be responsible for
reviewing the integrity of the financial statements and the
balance of information disclosed in the accompanying
Directors’ Report, to review the effectiveness of internal
controls and risk management systems and recommend to
the Board (for approval by the members) the appointment or
re-appointment of the external auditor. The ARCC reviews
and monitors the external auditor’s objectivity, competence,
effectiveness, and independence, ensuring that if it or its
associates are invited to undertake non-audit work it will not
compromise auditor objectivity and independence.
Further information can be found within the Group Audit,
Risk and Compliance Report contained within this Annual
Report.
Remuneration Committee
The Remuneration Committee meets at least twice a year
and comprises two Non-executive Directors. It is chaired by
Richard Roberts and is responsible for determining the
remuneration of the Executive Director, the Company
Secretary, and other members of the management.
Committee members do not take part in discussions
concerning their own remuneration.
Further information can be found within the Remuneration
Report contained within this Annual Report.
Nomination Committee
The Nomination Committee is comprised of the whole Board.
It is chaired by the Chair of the Board and is responsible for
making recommendations to the Board on matters relating to
the composition of the Board, including Executive and Non-
executive Director succession planning, the appointment of
new Directors and the election and re-election of Directors.
The Nomination Committee only meets as matters arise.
Webis Holdings plc
13
Corporate Governance Statement continued
Appointments to the Board
The principal purpose of the Nomination Committee is to
undertake the assessment of the balance of skills,
experience, independence, and knowledge on the Board
against the requirements of the business, with a view to
determining whether any shortages exist. Having completed
the assessment, the Committee makes recommendations to
the Board accordingly. Appointments to the Board are made
on merit, with due regard to the benefits of diversity. Within
this context, the paramount objective is the selection of the
best candidate, irrespective of background, and it is the view
of the Board that establishing quotas or targets for the
diversity of the Board is not appropriate.
All Director appointments must be approved by the
Company’s Nominated Adviser, as required under the AIM
Rules, before they are appointed to the Board.
Prior to appointment, Non-executive Directors are required to
demonstrate that they are able to allocate sufficient time to
undertake their duties.
Re-election
The Group’s Rules require that all Directors are submitted for
election at the AGM following their first appointment to the
Board. Thereafter all Directors will submit themselves for re-
election at least once every three years, irrespective of
performance.
Board and committee attendance
The number of formal scheduled Board and committee
meetings held and attended by Directors during the year was
as follows: -
Board
Audit
Remuneration
Nomination
Denham
Eke
9/9
2/2
2/2
0/1
Sir
James
Mellon
0/0
0/0
0/0
0/0
Ed
Comins
9/9
-
-
1/1
Richard
Roberts
9/9
2/2
2/2
1/1
Katie
Errock
9/9
-
-
0/1
QCA Principle 10: Communicate how the Company is
governed and is performing by maintaining a dialogue
with shareholders and other relevant stakeholders
The Group places a high priority on regular communications
with its various stakeholder groups and aims to ensure that
all communications concerning the Group’s activities are
clear, fair, and accurate. The Group’s website is regularly
updated, and users can register to be alerted when
announcements or details of presentations and events are
posted onto the website.
Notices of General Meetings of the Company can be found
here: http://www.webisholdingsplc.com/latest-news/.
The results of voting on all resolutions in general meetings
are posted to the Group’s website, including any actions to
be taken as a result of resolutions for which votes against
have been received from at least 20 per cent of independent
shareholders.
Approval
This report was approved by the Board of Directors on 28
November 2024 and signed on its behalf by:
Denham Eke
Non-executive Chair
28 November 2024
Webis Holdings plc
14
Audit, Risk and Compliance Committee Report
The Directors have agreed to comply with the provisions of
the Quoted Companies Alliance Corporate Governance
Code for Small and Mid-Size Quoted Companies (2018) to
the extent which is appropriate to its nature and scale of
operations.
This report illustrates how the Group complies with those
principles in relation to its Group Audit, Risk and Compliance
Committee.
Membership
The Committee comprises of two Non-executive Directors
and the members are Richard Roberts (Committee Chair)
and Denham Eke. The composition of the Committee has
been reviewed during the year and the Board is satisfied that
the Committee members have recent relevant financial
experience and the expertise to resource and fulfil its
responsibilities effectively, including those relating to risk and
controls.
Meetings
The Committee meets two times a year, including the review
of the interim and full year results. Other Directors and
representatives from the external auditors attend by
invitation.
Duties
The Committee carries out the duties below for the Company
and the Group as a whole, as appropriate:
▪
Monitors the integrity of the financial statements of the
Company, including annual and half-yearly reports,
interim management statements, and any other formal
announcement
relating
to
financial
performance,
reviewing significant financial reporting issues and
judgements which they contain.
▪
Reviews and challenges the consistency of the
information presented within the financial statements,
compliance with stock exchange or other legal
requirements, accounting policies and the methods used
to account for significant or unusual transactions.
▪
Keeps under review the effectiveness of the Group’s
internal controls and risk management systems.
▪
Reviews the Group’s arrangements for its employees to
raise, in confidence, possible wrongdoing in financial
reporting or other matters, the procedures for detecting
fraud, prevention of bribery and adequacy and
effectiveness of the Group’s anti-money laundering
systems and control.
▪
KPMG Audit LLC was appointed as auditor in 2002 and
the Committee oversees the relationship with them
including regular meetings to discuss their remit and
review the findings and any issues with the annual audit.
It also reviews their terms of appointment, meets them
once a year independent of management and considers
and makes recommendations to the Board, to be put to
the Company for approval at the Annual General
Meeting, in relation to the appointment, re-appointment
and removal of the Company’s external auditor. There
are no contractual restrictions in place in respect of the
auditor choice.
▪
The Committee is governed by a Terms of Reference
and
a
copy
of
this
is
available
on
www.webisholdingsplc.com - the Company’s website.
2024 Annual Report
During the year, the Committee held two meetings and can
confirm that it has received sufficient, reliable, and timely
information from management and the external auditors to
enable it to fulfil its responsibilities.
The Committee has satisfied itself that there are no
relationships between the auditor and the Group which could
adversely affect the auditor’s independence and objectivity,
and regular meetings have been held with them at both the
planning stage prior to the audit and after the audit at the
reporting stage.
All internal control and risk issues that have been brought to
the attention of the Committee by the external auditors have
been considered and the committee confirms that it is
satisfied that management has addressed the issues or has
plans to do so.
The Group has a number of policies and procedures in place
as part of its internal controls and these are subject to
continuous review and as a minimum are reviewed by the
Committee on an annual basis.
The Committee has reviewed and discussed together with
management and the external auditor the Company’s
financial statements for the year ended 31 May 2024 and
reports from the external auditor on the planning for and
outcome of their reviews and audit. The key accounting
issues and judgements considered relating to the Group’s
financial statements and disclosures were as follows:
▪
Revenue recognition – the Committee considered the
conditions of revenue recognition, including that of being
recognised on an accrual basis. The Committee agreed
that the current method of revenue recognition is
appropriate for the market that the Group operates
within, and that revenue satisfied the necessary criteria
to be recognised. Disclosures are included in note 1;
▪
Going concern – the Committee reviewed the going
concern position of the Group, taking into account the
12-month cash flow forecasts and the continued support
of the principal shareholder. The Committee is satisfied
that preparing the financial statements on a going
concern basis is appropriate. Disclosures are included in
note 1;
▪
Cash balances – the Committee reviewed the cash
position to ensure that it is able to meet its ongoing
requirements and also has sufficient cash reserves to
cover the relevant player liabilities. The Committee is
satisfied that there are sufficient cash balances to meet
its ongoing expenses and cover the player balances in
full if required. Disclosures are included in note 12.
Richard Roberts
Independent Non-executive Director
28 November 2024
Webis Holdings plc
15
Statement of Directors’ Responsibilities in Respect of the Annual Report and the Financial
Statements
The Directors are responsible for preparing the Annual
Report and the Group and Parent Company financial
statements
in
accordance
with
applicable
law
and
regulations.
Company law requires the Directors to prepare Group and
Parent Company financial statements for each financial year.
Under the AIM Rules of the London Stock Exchange, they
are required to prepare the Group financial statements in
accordance with UK Adopted – International Accounting
Standards and applicable law and they have elected to
prepare the Parent Company financial statements on the
same basis.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and
Parent Company and of their profit or loss for that period. In
preparing each of the Group and Parent Company financial
statements, the Directors are required to:
•
select suitable accounting policies and then apply them
consistently;
•
make judgements and estimates that are reasonable,
relevant, and reliable;
•
state whether they have been prepared in accordance
with UK Adopted – International Accounting Standards;
•
assess the Group and Parent Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern; and
•
use the going concern basis of accounting unless they
either intend to liquidate the Group or the Parent
Company or to cease operations or have no realistic
alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Parent Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
Parent Company and enable them to ensure that its financial
statements comply with the Companies Acts 1931-2004.
They are responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error, and have general responsibility for
taking such steps as are reasonably open to them to
safeguard the assets of the Group and to prevent and detect
fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Directors’ Report that complies
with that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the Isle of Man
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Signed on behalf of the Board.
Denham Eke
Non-executive Chair
28 November 2024
Webis Holdings plc
16
Report of the Remuneration Committee
Directors’ Remuneration Report
As an Isle of Man registered company there is no
requirement to produce a Directors’ Remuneration Report.
However, the Board follows best practice and therefore has
prepared such a report.
The Directors have agreed to comply with the provisions of
the Quoted Companies Alliance Corporate Governance
Code for Small and Mid-Size Quoted Companies (2018) to
the extent which is appropriate to its nature and scale of
operations.
This report illustrates how the Group complies with those
principles in relation to Directors’ remuneration.
The Level and Components of Executive Director
Remuneration
The Group’s Remuneration Policy reflects the Group’s
business strategy and objectives as well as sustained and
long-term value creation for shareholders. In addition, the
policy aims to be fair and provide equality of opportunity,
ensuring that: -
▪
the Group is able to attract, develop and retain high-
performing and motivated employees in the competitive
local and wider US markets;
▪
employees are offered a competitive remuneration
package to encourage enhanced performance and are,
in a fair and responsible manner, rewarded for their
individual contribution to the success of the Group;
▪
it reflects our culture and values; and
▪
there is full transparency of the Group’s Remuneration
Policy.
In line with the Board’s approach, which reflects that adopted
within
other
comparable
organisations,
the
Group’s
Remuneration Policy provides for the reward of the
Executive Director through salary and other benefits.
Executive Director’s Emoluments
The remuneration for the Executive Director reflects their
responsibilities. It comprises basic salary, eligibility to
participate in an annual bonus scheme when this is
considered appropriate, private healthcare and share option
incentives.
Annual bonus scheme payments are not pensionable and
are not contracted.
As with staff generally, whose salaries are subject to annual
reviews, the basic salary payable to the Executive Director is
reviewed each year with reference to jobs carrying similar
responsibilities in comparable e-gaming organisations,
market
conditions
generally
and
local
employment
competition in view of the Group’s geographical position.
It is anticipated that an annual bonus scheme will operate
when Group profitability and cash flow allow. Bonuses for the
Executive Director are calculated with reference to the profit
before tax as disclosed in the audited accounts of the Group,
together with an assessment by the Committee of the
Director’s performance against agreed personal targets.
Bonus payments are not pensionable.
The Committee believes that share ownership by executives
strengthens the link between their personal interests and
those of shareholders. Options are granted to executives
periodically at the discretion of the Remuneration Committee.
The grant of share options is not subject to fixed
performance criteria. This is deemed to be appropriate as it
allows the Committee to consider the performance of the
Group and the contribution of the individual executives and,
as with annual bonus payments, illustrates the relative
importance placed on performance-related remuneration.
The Group does not intend to contribute to the personal
pension plans of Directors in the forthcoming year.
Executive Directors’ Contractual Terms
The service contract of the Executive Director provides for a
notice period of six months.
Non-executive Directors’ Remuneration
Non-executive Directors do not receive any benefits other
than their fees and travelling expenses for which they are
reimbursed. The level of fees payable to Non-executive
Directors is assessed using benchmarks from a group of
comparable e-gaming organisations.
The Procedure for Determining Remuneration
The
Remuneration
Committee,
comprising
two
Non-
executive
Directors,
is
responsible
for
setting
the
remuneration of the Executive Director and is chaired by
Richard Roberts. Committee members do not take part in
discussions concerning their own remuneration. The basic
Non-executive Director fee is set by the Group Chair. The
Chair of the Committee reports at the Board meeting
following a Committee meeting.
It is the view of the Committee that Directors’ remuneration
awarded across the Group for the year has been in
accordance with the Group’s stated Remuneration Policy
and, on behalf of the Committee I recommend that you
endorse this Group report. An analysis of Directors’
emoluments is as follows:
2024
US$000
2023
US$000
Emoluments — salaries, bonuses, and taxable benefits
373
368
— fees
94
105
467
473
Webis Holdings plc
17
Report of the Remuneration Committee continued
Directors’ Emoluments
Basic
salary
US$000
Fees
US$000
Bonus
US$000
Termination
payments
US$000
Benefits
US$000
2024
Total
US$000
2023
Total
US$000
Executive
Ed Comins
341
—
—
—
32
373
368
Non-executive
Denham Eke*
—
25
—
—
—
25
24
Sir James Mellon
—
2
—
—
—
2
18
Richard Roberts
—
48
—
—
—
48
48
Katie Errock*
—
19
—
—
—
19
15
Aggregate emoluments
341
94
—
—
32
467
473
* Paid to Burnbrae Limited.
Details of the options outstanding at 31 May 2024 are as follows:
Name of Director
31 May
2023
Granted /
(lapsed) in
year
31 May
2024
Exercise
price
Date
from which
exercisable
Expiry
date
Ed Comins - 2016 Share Option Plan
14,000,000
— 14,000,000
1p 3 March 2019 3 March 2026
14,000,000
— 14,000,000
The market price of the shares at 31 May 2024 was 1.35 pence. The range during the year was 1.80 pence to 0.925 pence.
Approval
The report was approved by the Board of Directors and signed on behalf of the Board.
Richard Roberts
Independent Non-executive Director
28 November 2024
Webis Holdings plc
18
Independent Auditor’s Report to the Members of Webis Holdings plc
1.
Our opinion is unmodified
We have audited the financial statements of Webis Holdings plc (the “Company”) and its subsidiaries (together, the "Group"), which
comprise the consolidated and Company statement of financial position as at 31 May 2024, the consolidated statements of
comprehensive income, changes in equity and cash flows and Company statement of changes in equity for the year then ended,
and notes, comprising significant accounting policies and other explanatory information.
In our opinion,
•
The financial statements give a true and fair view of the state of the Group's and of the Company's affairs as at 31 May
2024 and of the Group's loss for the year then ended;
•
The Group financial statements have been properly prepared in accordance with UK-Adopted International Accounting
Standards;
•
The Parent Company statement of financial position and statement of changes in equity and related notes (“Parent
Company financial statements”) have been properly prepared in accordance with UK-Adopted International Accounting
Standards; and
•
The Group and Parent Company financial statements have been prepared in accordance with the requirements of the
Companies Acts 1931 to 2004.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of, the Company and
Group in accordance with, UK ethical requirements including the FRC Ethical Standard as required by the Crown Dependencies’
Audit Rules and Guidance. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our
opinion.
2.
Material uncertainty relating to going concern
The risk
Our response
Going concern
(Group and Company key audit
matter)
Refer to the Audit, Risk and Compliance
Committee Report on page 14, note 1.1
[(Accounting
Policy
for
Basis
of
preparation – Going concern)].
Disclosure quality:
The financial statements explain how the
Board has formed a judgement that it is
appropriate to adopt the going concern
basis of preparation for the Company.
That judgement is based on an evaluation
of the inherent risks to the Company’s
business model and how those risks might
affect the Company’s financial resources
or ability to continue operations over a
period of at least a year from the date of
approval of the financial statements.
The risks most likely to affect the Group
and
Company’s
available
financial
resources over that period were:
•
Continued financial support from a
related company (in the nature of a
confirmation from a related company
that their loan, due to mature in 2025,
will not be demanded for repayment
for at least 12 months from the date
of this audit report);
Our audit procedures included:
Consideration of whether these risks could
plausibly affect the liquidity of the Group
and Company in the going concern period
by assessing the sensitivities over the
level of available financial resources taking
account of severe, but plausible, adverse
effects that could arise from these risks
individually and collectively.
Funding assessment
•
We obtained and inspected a written
assessment of going concern on the
Group
and
Company
and
corroborated the assessment with our
knowledge of the business.
•
We read the Circular issued post year
end regarding the proposed delisting
of
the
Company’s
shares
and
obtained an understanding of the
proposed actions that management
will undertake should that occur.
•
Agreeing the committed level of
funding from a related company to
facility agreements.
•
Assessing that the forecast financial
Webis Holdings plc
19
Independent Auditor’s Report to the Members of Webis Holdings plc continued
2. Material uncertainty relating to going concern continued
3.
Other key audit matters: our assessment of the risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us,
including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Going concern is a significant key
audit matter and is described in section 2 of our report. In arriving at our audit opinion above, the other key audit matter, was as
follows:
The risk
Our response
•
The
result
of
continued
trading
activities over the going concern
period;
•
The implementation of the Circular
relating to the proposed delisting of
the Company’s shares from AIM;
•
The
realisation
of
proposed
associated cost saving initiatives
should the delisting occur;
•
The on-going strategic review of the
Group’s activities by the Board.
The risk for our audit is whether or not
those risks are such that they amounted
to a material uncertainty that may cast
significant doubt about the ability of the
Company to continue as a going concern.
If so, that fact is required to be disclosed
(as has been done) and, along with a
description of the circumstances, is a key
financial statement disclosure.
information prepared by management
for
the
going
concern
period,
supplemented by the increased facility
from a related party post year end are
sufficient to provide the Group and
Company with sufficient liquidity to
meet expenditure in the forecast
period up to 30 November 2025.
•
Evaluating the achievability of the
actions the Directors consider they
would take to improve the position
should the risks materialise, which
included realising the delisting from
AIM and availing the group of the
financial support commitment from a
related entity, taking into account the
extent to which the Directors can
control the timing and outcome of
these.
Assessing transparency:
•
Considering
whether
the
going
concern disclosure in note 1.1 to the
group
and
company
financial
statements respectively give a full and
accurate description of the concern,
including the identified risks and
dependencies.
The risk
Our response
Revenue recognition (Group key audit
matter)
Consolidated
Statement
of
Comprehensive Income: Revenue US$
50,031,000 (2023: US$ 50,020,000)
Refer to the Audit, Risk and Compliance
Committee Report on page 14, note 1.2
(Accounting Policy for Revenue) and
note
2
(Operating
Segments)
disclosures.
Revenue recognition - occurrence
The Group enters into high volumes of
revenue-generating transactions each
day which are processed on complex IT
systems. There is a risk that a system
may not be configured correctly from the
outset such that winning and losing bets
or
commissions
are
calculated
incorrectly, that the systems do not
interface correctly from the customer
Our audit procedures included:
Outsourcing controls:
•
We evaluated the control environment
of
the
service
organisations
by
obtaining and inspecting the latest
System and Organisation Controls
(SOC) reports upon whose system
infrastructure and applications are
relied on by the Group.
Webis Holdings plc
20
Independent Auditor’s Report to the Members of Webis Holdings plc continued
3. Other key audit matters: our assessment of the risks of material misstatement continued
The risk
Our response
facing systems through to the financial
information
systems
and
that
unauthorised changes may be made to
any of these systems, which may result
in the misstatement of revenue.
There is also the risk that revenue is
materially misstated in order to boost
the Group’s earnings position and
future outlook may be induced by a
number of factors. This may include
the Company’s AIM listed status –
hence an effort to maintain a high share
price and the need to meet both internal
goals and external market expectations.
Considering the factors above, we
identified the occurrence of revenue as
a significant risk due to fraud and error.
•
We tested the operating effectiveness
of controls by obtaining and inspecting
SOC
reports
from
the
service
organisations.
•
We
also
tested
the
operating
effectiveness of controls which are
performed at the user entity level.
•
We
assessed
the
objectivity,
competence and nature of the work
performed by the Independent Service
Auditor who provides the SOC reports.
Tests of details:
•
We agreed total revenues and payouts
recorded by the Group to the reports
extracted from the third-party service
organisation’s
system,
which
we
obtained directly from the third-party
service organisation.
•
We tested 100 per cent of the other
directly related expenses by tracing
amounts recorded to supplier invoices.
•
We recalculated net gaming revenue
subtracting total payouts and other
directly related expenses from revenue.
•
We performed cut-off testing to ensure
that revenue recorded during the year
met the criteria for recognition during
the year and that revenue earned post
year end has not been recorded
incorrectly in the year under audit.
•
We inspected post year end journals for
reversals of revenue.
•
We compared revenue in the period to
net cash receipts on bank statements.
•
We compared the company foreign
exchange rates used in translating
revenue to market rates.
Assessing adequacy of disclosures
•
We assessed the adequacy of the
Group’s disclosures in respect of
revenue recognition in the financial
statements for compliance with UK-
Adopted
International
Accounting
Standards.
Webis Holdings plc
21
Independent Auditor’s Report to the Members of Webis Holdings plc continued
4. Our application of materiality and an overview of the scope of our audit
Materiality for the consolidated financial statements as a whole was set at US$ 44,000, determined with reference to a benchmark
of Group net gaming revenue of US$ 4,411,798, of which it represents approximately 1% (2023: 0.9%). Materiality for the Company
financial statements was set at US$ 20,770 (2023: US$ 14,820), determined with reference to a benchmark of Company total
assets of US$ 2,769,640 (2023: US$ 1,975,242), of which it represents approximately 0.75% (2023: 0.75%).
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in
individual account balances add up to a material amount across the financial statements as a whole. Performance materiality for
the Group was set at 75% (2023: 75%) of materiality for the financial statements as a whole, which equates to US$ 33,000 (2023:
US$ 31,500) for the Group and US$ 15,000 (2023: US$ 11,100) for the Company. We applied this percentage in our determination
of performance materiality because we did not identify any factors indicating an elevated level of risk.
We reported to the Audit Committee any corrected or uncorrected identified misstatements exceeding US$ 2,200 for the Group
(2023: US$ 2,100) and US$ 1,040 for the Company (2023: US$ 700), in addition to other identified misstatements that warranted
reporting on qualitative grounds.
Our audit of the Group was undertaken to the materiality level specified above, which has informed our identification of significant
risks of material misstatement and the associated audit procedures performed in those areas as detailed above.
The group team performed the audit of the Group as if it was a single aggregated set of financial information. The audit was
performed using the materiality level set out above and covered 100% of total Group revenue, total Group profit before tax, and
total Group assets and liabilities.
5. Going concern
The Directors have prepared the consolidated financial statements on the going concern basis as they do not intend to liquidate the
Group or the Company or to cease their operations, and as they have concluded that the Group and the Company's financial
position means that this is realistic for at least a year from the date of approval of the consolidated financial statements (the “going
concern period").
As stated above, they have also concluded that there is material uncertainty related to going concern.
An explanation of how we evaluated the Directors’ assessment is set out in the ‘material uncertainty related to going concern’
section of our report. Our conclusions based on this work:
•
we consider that the Directors' use of the going concern basis of accounting in the preparation of the consolidated
financial statements is appropriate;
•
we have nothing material to add or draw attention to in relation to the Directors' statement in the notes to the consolidated
financial statements on the use of the going concern basis of accounting and their identification therein of a material
uncertainty over the Group and the Company's use of that basis for the going concern period and we found the going
concern disclosure in note 1.1 to be acceptable.
6.
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
•
enquiring of management as to the Group’s and Company’s policies and procedures to prevent and detect fraud as well
as enquiring whether management have knowledge of any actual, suspected, or alleged fraud;
•
reading minutes of meetings of those charged with governance; and
•
using analytical procedures to identify any unusual or unexpected relationships.
Identifying and responding to risks of material misstatement due to fraud continued
As required by auditing standards, and taking into account possible incentives or pressures to misstate performance and our overall
knowledge of the control environment, we perform procedures to address the risk of management override of controls and the risk
of fraudulent revenue recognition, and the risk that management may be in a position to make inappropriate accounting entries. We
did not identify any additional fraud risks.
Webis Holdings plc
22
Independent Auditor’s Report to the Members of Webis Holdings plc continued
6. Fraud and breaches of laws and regulations – ability to detect continued
We performed procedures including:
•
identifying journal entries and other adjustments to test based on risk criteria and comparing any identified entries to
supporting documentation;
•
incorporating an element of unpredictability in our audit procedures; and
•
those set out in the revenue recognition key audit matter.
Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements
from our sector experience and through discussion with management (as required by auditing standards), and from inspection of
the Group’s regulatory and legal correspondence, if any, and discussed with management the policies and procedures regarding
compliance with laws and regulations. As the Group is regulated, our assessment of risks involved gaining an understanding of the
control environment including the entity’s procedures for complying with regulatory requirements.
The Group and Company are subject to laws and regulations that directly affect the financial statements including financial
reporting legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of
our procedures on the related financial statement items.
The Group and Company are subject to other laws and regulations where the consequences of non-compliance could have a
material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or
impacts on the Group and the Company’s ability to operate. We identified Gaming regulation as being the area most likely to have
such an effect, recognising the regulated nature of the Group’s and Company’s activities and its legal form. Auditing standards limit
the required audit procedures to identify non-compliance with these laws and regulations to enquiry of management and inspection
of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident
from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with
auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions
reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify
it.
In addition, as with any audit, there remains a higher risk of non-detection of fraud, as this may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material
misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance
with all laws and regulations.
7.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the annual
report but does not include the consolidated financial statements and our auditor's report thereon. Our opinion on the consolidated
financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as
explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements, or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
8.
Matters on which we are required to report by exception
Under the Companies Acts 1931 to 2004, we are required to report to you if, in our opinion:
•
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches
not visited by us; or
•
the Parent Company financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of Directors’ remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
Webis Holdings plc
23
Independent Auditor’s Report to the Members of Webis Holdings plc continued
9.
Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on page 15, the Directors are responsible for: the preparation of the consolidated
financial statements including being satisfied that they give a true and fair view; such internal control as they determine is
necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to
fraud or error; assessing the Group and Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Company
or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a
high level of assurance but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial
statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
10. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with section 15 of the Companies Act 1982. Our
audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.
Edward Houghton
Responsible Individual
For and on behalf of KPMG Audit LLC
Chartered Accountants and Recognised Auditors
Isle of Man
28 November 2024
Webis Holdings plc
24
Consolidated Statement of Comprehensive Income
For the year ended 31 May 2024
Note
2024
US$000
2023
US$000
Amounts wagered
110,459
113,371
Revenue
1.2
50,031
50,020
Cost of sales
1.2
(45,531)
(45,303)
Betting duty paid
(88)
(100)
Gross profit
4,412
4,617
Operating costs
(5,445)
(5,488)
Other (losses) / gains
(12)
32
Other income
175
247
Operating loss
3
(870)
(592)
Finance costs
4
(193)
(153)
Loss before income tax
(1,063)
(745)
Income tax expense
6
—
—
Loss for the year
(1,063)
(745)
Total comprehensive loss for the year
(1,063)
(745)
Basic earnings per share for loss attributable to the equity holders of the Company
during the year (cents)
7
(0.27)
(0.19)
Diluted earnings per share for loss attributable to the equity holders of the
Company during the year (cents)
7
(0.27)
(0.19)
The notes on pages 28 to 53 form part of these financial statements.
The Directors consider that all results derive from continuing activities.
Webis Holdings plc
25
Statements of Financial Position
As at 31 May 2024
Note
31.05.24
Group
US$000
31.05.24
Company
US$000
31.05.23
Group
US$000
31.05.23
Company
US$000
Non-current assets
Intangible assets
8
57
—
19
—
Property, equipment, and motor vehicles
9
525
—
661
1
Investments
10
—
3
—
3
Bonds and deposits
11
100
—
100
—
Total non-current assets
682
3
780
4
Current assets
Bonds and deposits
11
883
—
883
—
Cash, cash equivalents and restricted cash
12
3,421
1,203
3,285
1,227
Trade and other receivables
13
1,228
1,564
1,378
745
Total current assets
5,532
2,767
5,546
1,972
Total assets
6,214
2,770
6,326
1,976
Equity
Called up share capital
16
6,334
6,334
6,334
6,334
Share option reserve
16
42
42
42
42
Retained losses
(6,866)
(5,973)
(5,803)
(5,828)
Total equity
(490)
403
573
548
Current liabilities
Trade and other payables
14
3,848
84
3,712
78
Loans, borrowings, and lease liabilities
15
970
850
462
350
Total current liabilities
4,818
934
4,174
428
Non-current liabilities
Loans, borrowings, and lease liabilities
15
1,886
1,433
1,579
1,000
Total non-current liabilities
1,886
1,433
1,579
1,000
Total liabilities
6,704
2,367
5,753
1,428
Total equity and liabilities
6,214
2,770
6,326
1,976
The notes on pages 28 to 53 form part of these financial statements.
The financial statements were approved by the Board of Directors on 28 November 2024.
Denham Eke
Non-executive Chair
Webis Holdings plc
26
Statements of Changes in Equity
For the year ended 31 May 2024
Group
Called up
share capital
US$000
Share option
reserve
US$000
Retained
earnings
US$000
Total
equity
US$000
Balance as at 31 May 2022
6,334
42
(5,058)
1,318
Total comprehensive loss for the year:
Loss for the year
—
—
(745)
(745)
Balance as at 31 May 2023
6,334
42
(5,803)
573
Total comprehensive profit for the year:
Loss for the year
—
—
(1,063)
(1,063)
Balance as at 31 May 2024
6,334
42
(6,866)
(490)
Company
Called up
share capital
US$000
Share option
reserve
US$000
Retained
earnings
US$000
Total
equity
US$000
Balance as at 31 May 2022
6,334
42
(5,711)
665
Total comprehensive loss for the year:
Loss for the year
—
—
(117)
(117)
Balance as at 31 May 2023
6,334
42
(5,828)
548
Total comprehensive profit for the year:
Loss for the year
—
—
(145)
(145)
Balance as at 31 May 2024
6,334
42
(5,973)
403
The notes on pages 28 to 53 form part of these financial statements.
Webis Holdings plc
27
Consolidated Statement of Cash Flows
For the year ended 31 May 2024
Note
2024
US$000
2023
US$000
Cash flows from operating activities
Loss before income tax
(1,063)
(745)
Adjustments for:
- Depreciation of property, equipment, and motor vehicles
9
139
137
- Amortisation of intangible assets
8
12
5
- Rent concessions received
18
—
(18)
- Finance costs / (income) - (net)
136
94
- Decrease / (increase) in movement of restricted cash
126
(60)
- Increase in lease liabilities
57
59
- Other foreign exchange movements
7
(47)
Changes in working capital:
- Decrease / (increase) in receivables
150
(188)
- Increase in payables
136
72
Cash flows from operations
(300)
(691)
Finance income
11
7
Net cash used in operating activities
(289)
(684)
Cash flows from investing activities
Purchase of intangible assets
8
(50)
(13)
Purchase of property, equipment, and motor vehicles
9
(3)
(13)
Net cash used in investing activities
(53)
(26)
Cash flows from financing activities
Loan interest paid
(147)
(101)
Payment of lease liabilities - principal
18
(91)
(89)
Payment of lease liabilities - interest
18
(57)
(59)
Rent concessions received
18
—
18
Repayment of loans and borrowings
(527)
(20)
Proceeds from loans and borrowings
1,433
—
Net cash generated from / (used in) financing activities
15
611
(251)
Net increase / (decrease) in cash and cash equivalents
269
(961)
Cash and cash equivalents at beginning of year
2,148
3,062
Exchange (losses) / gains on cash and cash equivalents
(7)
47
Cash and cash equivalents at end of year
12
2,410
2,148
The notes on pages 28 to 53 form part of these financial statements.
Webis Holdings plc
28
Notes to the Financial Statements
For the year ended 31 May 2024
1 Reporting entity
Webis Holdings plc (the “Company”) is a company domiciled in the Isle of Man. The address of the Company’s registered office
is Viking House, Nelson Street, Douglas, Isle of Man, IM1 2AH. The Webis Holdings plc consolidated financial statements as at
and for the year ended 31 May 2024 consolidate those of the Company and its subsidiaries (together referred to as the
“Group”). The Group’s primary activities are the provision of pari-mutuel wagering services, through its Isle of Man and USA
based subsidiaries and the hosting of harness racing, through its USA based subsidiary.
1.1 Basis of preparation
(a) Statement of compliance
The consolidated financial statements have been prepared in accordance with UK Adopted – International Accounting
Standards. They were authorised for issue by the Board on 28 November 2024.
The Group has consistently applied the accounting policies as set out in note 1.2 to all periods presented in these financial
statements.
Functional and presentational currency
These financial statements are presented in US Dollars which is the Company’s functional and presentational currency.
Financial information presented in US Dollars has been rounded to the nearest thousand, unless otherwise indicated. All
continued operations of the Group have US Dollars as their functional currency.
Other information presented
In line with the Isle of Man Companies Acts 1931-2004, the Company also presents Parent Company Statements of Financial
Position, the Parent Company Statement of Changes in Equity and related disclosures. The Company applies the requirements
of UK Adopted International Accounting Standards, as indicated in the relevant accounting policies below, when preparing the
Company statement of financial position and related notes.
(b) Basis of measurement
The Group consolidated financial statements are prepared under the historical cost convention except where assets and
liabilities are required to be stated at their fair value.
(c) Use of estimates and judgement
The preparation of the Group financial statements in conformity with UK Adopted – International Accounting Standards requires
management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of
assets and liabilities, income, and expenses. Although these estimates are based on management’s best knowledge and
experience of current events and expected economic conditions, actual results may differ from these estimates.
The Directors consider the only critical estimate area to be as follows:
•
Note 20 – the measurement of Expected Credit Loss (“ECL”) allowance for trade and other receivables and assessment of
specific impairment allowances where receivables are past due.
Going concern
The Group and Parent Company financial statements have been prepared on a going concern basis, notwithstanding material
uncertainties related to events and conditions discussed below, that may cast significant doubt on the going concern
assumption.
As indicated in the statement of comprehensive income, the Group has incurred a net loss in the current year of US$ 1,063,000
(2023: loss of US$ 745,000), with net operating cash outflows in the current year of US$ 300,000 (2023: outflows of US$
691,000), and due to that, net assets reduced from US$ 573,000 to a net liability of US$ (490,000). WatchandWager.com Ltd
generated a profit of US$ 124,000, while WatchandWager.com LLC incurred a loss of US$ 1,042,000. The company incurred a
loss for the year of US$ 145,000 (2023: loss of US$ 117,000), reducing company net assets to US$ 403,000 (2023: US$
548,000).
Based on forecasts prepared by the Directors, the Group and the Company may continue to sustain losses if it continues in its
current structure and operations. These circumstances have necessitated the implementation of a strategic review of the
Group’s activities by the Directors.
As part of the implementation of this strategic review the Directors have announced that the Company will seek a cancellation of
the admission of the Company’s shares to trading on AIM in order to realise significant cost savings incurred as a result of the
legal and regulatory burden of operating as a listed business being disproportionate to the company’s size and operations. As
announced on 22 November 2024, the cancellation of the Company’s shares is subject to a shareholder vote which is currently
scheduled to take place on 18 December 2024. The directors consider that the cancellation of the listing is a critical step in the
Webis Holdings plc
29
Notes to the Financial Statements continued
1.1 Basis of preparation continued
Going concern continued
strategic review of the business and in realising necessary cost savings and improved financial performance that will increase
the future prospects of the Group, as well as improving the flexibility and attractiveness of the business to future investment.
The Directors consider that the continued development of gaming regulation in the USA may provide opportunities for the
Group to grow in future, combined with the delisting making the business more attractive for potential partnerships, mergers,
and acquisitions, most likely within the USA. Whilst the Directors continue to assess all strategic options in relation to the
Group’s business, the Directors recognise that the ultimate success of strategies adopted is difficult to predict as they may
require additional liquidity to pursue the required investment.
After the year end, in November 2024, Galloway Limited (related entity) has agreed a new loan of US$ 550,000 repayable in 5
years (as well as rolling up the loan that matured during the current year), which will assist in providing the Group with liquidity
to support its continued operations whilst a strategic review is completed which includes reducing the expense base of the
Group.
The Group and the Company have, in previous years, received financial support from Galloway Limited, and Galloway Limited
has expressed its willingness to continue to make these funds available and has undertaken not to recall these existing facilities
(including the amount extended in November 2024 and the loan due to mature in March 2025) within the forecast period.
The Directors have prepared cash flow forecasts for a period of 12 months from the date of approval of these financial
statements which indicate that, should the cancellation of shares from AIM occur in December 2024 (subject to shareholder
vote) and taking account of reasonably possible downsides, the Group and the Company are projected to have sufficient funds
for at least 12 months from the date of signing the current year financial statements as a result of the additional financial support
of US$ 550,000 received from Galloway Limited in November 2024. The Directors consider that this provides a reasonable time
period for the shareholder vote to occur, and should the cancellation of shares be approved, allows time for such cost saving
initiatives to be implemented as well as the strategic review of the Group’s activities to be completed.
The outcome of these circumstances represents a material uncertainty that may cast significant doubt upon the Company’s
ability to continue as a going concern and, therefore, to continue realising its assets and discharging its liabilities in the normal
course of business. The financial statements do not include any adjustments that would result from the basis of preparation
being inappropriate.
Based on these indications and factors, the Directors believe that it remains appropriate to prepare the financial statements on
a going concern basis.
1.2 Summary of significant accounting policies
During the current year, the Group adopted all the new and revised IFRSs that are relevant to its operation and are effective for
accounting periods beginning on 1 June 2023. No adoptions had a material effect on the accounting policies of the Group.
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These
policies have been consistently applied to all the years presented unless otherwise stated.
Basis of consolidation
The consolidated financial statements incorporate the results of the Group. Subsidiaries are consolidated from the date of
acquisition, being the date on which the Group obtains control, and continue until the date that such control ceases. Control
exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to
obtain benefits from its activities.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree
and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs
are expensed as incurred.
Inter-company transactions, balances, and unrealised gains on transactions between the Group companies are eliminated.
Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with
the Group’s accounting policies.
Webis Holdings plc
30
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). As the primary activities of the Group and the
primary transactional currency of the Group’s customers are carried out in US Dollars, the consolidated financial statements
have been presented in US Dollars, which is the Company’s presentational and functional currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash
flow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate to borrowings are presented
in the income statement within ‘Finance income’ or ‘Finance costs’. All other foreign exchange gains and losses are presented
in the income statement within ‘Other (losses)/gains’.
Revenue from contracts with customers
The Group generates revenue primarily from the provision of wagering services and the hosting of races on which guests are
entitled to participate in the related wagering services. Revenue is measured at fair value based on the consideration specified
in a contract with a customer. The Group recognises revenue when it discharges services to a customer. Revenue has been
disaggregated by geographical locations which are consistent with the operating segments (note 2).
Hosting fees (Racetrack operations) are recognised when the customers participate in the Group’s pari-mutuel pools and the
race audio visual signals are transmitted. Hosting fees are recorded on a gross receipts basis.
Wagering revenue from the Group’s activities as the race host is recognised when a race on which wagers are placed is
completed. The wagering commission from the Group’s commingling of its wagering pools with a host’s pool is recognised
when the race on which those wagers are placed is completed. The Group acts as a principal when it allows customers to place
wagers in the races it hosts and as an agent when it allows customers to place wagers in other entities’ races. Where the Group
acts as a principal, the entire wager is recognised as revenue and where it is an agent the wagering commission the Group
retains is recognised as revenue.
Settlement terms for revenue where the Group acts as a host is usually 7 days for on and off-track wagering and 30 days from
month end for ADW wagering. Where the Group acts as an agent, settlement terms are typically 30 days from month end.
Transactions fees (ADW operations) are recognised when the Group facilitates customers’ deposit transactions into their betting
accounts. The Group recognises revenue for transaction services net of related winnings.
Cost of sales
The Group recognises cost of sales related to the Racetrack operations in which it is the race host. The cost of sales includes
direct costs such as purses, hub fees, import fees, pay-outs, and other statutory distributions.
Segmental reporting
Segmental reporting is based on the business areas in accordance with the Group’s internal reporting structure, which allows
the individual operating segments to be identified by the disparate nature of the principal activity they undertake. The Group
determines and presents segments based on the information that internally is provided to the Board and Managing Director, the
Group’s chief operating decision maker.
An operating segment is a component of the Group and engages in business activities from which it may earn revenues and
incur expenses. The Board and Managing Director regularly review an operating segment’s results to make decisions about
resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.
Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the
extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly in equity, respectively.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to
the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate
of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using
tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
Webis Holdings plc
31
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Current and deferred income tax continued
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from
the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or
loss. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the reporting
date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is
settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries except for
deferred income tax liability, where the timing of the reversal of the temporary difference is controlled by the Group and it is
probable that the temporary difference will not reverse in the foreseeable future. Only where there is an agreement in place that
gives the Group the ability to control the reversal of the temporary difference is the liability not recognised.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only to
the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available
against which the temporary difference can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes, assets and liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances
on a net basis.
Intangible assets — other
(a) Trademarks and licences
Separately acquired trademarks and licences are shown at historical cost. Trademarks and licences acquired in a business
combination are recognised at fair value at the acquisition date. Trademarks and licences have a finite useful life and are
carried at cost less accumulated amortisation and any accumulated impairment. Amortisation is calculated using the straight-
line method to allocate the cost of trademarks and licences over their estimated useful lives of three years. Renewal costs are
expensed in the year they relate to.
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific
software. These costs are amortised over their estimated useful lives of three years.
(b) Website design and development costs
Costs associated with maintaining websites are recognised as an expense as incurred. Development costs that are directly
attributable to the design and testing of identifiable and unique websites controlled by the Group are recognised as intangible
assets when the following criteria are met:
• it is technically feasible to complete the website so that it will be available for use;
• management intends to complete the website and use it;
• there is an ability to use the website;
• it can be demonstrated how the website will generate probable future economic benefits;
• adequate technical, financial, and other resources to complete the development and to use the website are available; and
• the expenditure attributable to the website during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the website include the website employee costs and an appropriate
portion of relevant overheads.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset in a subsequent period.
Website development costs recognised as assets are amortised over their estimated useful lives, which do not exceed three
years.
Webis Holdings plc
32
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Property, equipment, and motor vehicles
Items of property, equipment and motor vehicles are stated at historical cost less accumulated depreciation (see below) and
impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the Company and the cost of the item
can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are
charged to the income statement during the financial period in which they are incurred.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the financial position date. An asset’s
carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount. Depreciation is calculated using the straight-line method to allocate the cost of property,
equipment, and motor vehicles over their estimated useful lives.
The estimated useful lives of property, equipment and motor vehicles for current and comparative periods are as follows:
Motor vehicles
5 years Fixtures and fittings
3 years
Plant and equipment
3-5 years
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within
‘Other gains/(losses) – net’ in the income statement.
Investment in subsidiary
A subsidiary is an entity controlled by the entity. The Company controls an investee when the Company is exposed or has rights
to variable returns from its involvement with the investee and can affect the return through its power over the investee. Control
exists when the Company has the power to govern the financial and operating policies of an entity to obtain benefits from its
activities. In assessing control, potential voting rights that are currently exercisable are considered.
Investment in subsidiaries are initially recognised at cost. At subsequent reporting dates, the recoverable amounts are
estimated to determine the extent of impairment losses, if any, and carrying amounts of investments are adjusted accordingly.
Impairment losses are recognised as an expense. Where impairment losses subsequently reverse, the carrying amounts of the
investments are increased to the revised recoverable amounts but limited to the extent of initial cost of investments. A reversal
of impairment loss is recognised in the profit or loss.
Equity
Share capital is determined using the nominal value of shares that have been issued.
Equity settled share-based employee remuneration is credited to the share option reserve until related stock options are
exercised. On exercise or lapse, amounts recognised in the share option reserve are taken to share capital. When the options
are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs are
credited to share capital (nominal value) and share premium.
Retained earnings include all current and prior period results as determined in the income statement and any other gains or
losses recognised in the Statement of Changes in Equity.
Financial instruments
Recognition and measurement
Non-derivative financial instruments include trade and other receivables, cash and cash equivalents, bonds and deposits,
borrowings and trade and other payables.
Financial assets and financial liabilities are recognised on the Group and the Company’s balance sheet when the Group and/or
the Company become party to the contractual terms of the instrument. Transaction costs are included in the initial measurement
of financial instruments, except financial instruments classified as at fair value through profit or loss. The subsequent
measurement of financial instruments is dealt with below.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment.
Webis Holdings plc
33
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Financial instruments continued
Recognition and measurement continued
Cash and cash equivalents
Cash and cash equivalents are defined as cash in bank and in hand as well as bank deposits, money held for processors and
cash balances held on trust for the customers entitled to them. Cash equivalents are held for the purpose of meeting short-term
cash commitments rather than for investment or other purposes. These are subsequently measured at amortized cost.
Bonds and deposits
Bonds and deposits are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
Borrowings
Interest-bearing borrowings and overdrafts are recorded at the proceeds received net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption and direct issue costs are charged on an accrual basis using the
effective interest method and are added to the carrying amount of the instrument.
Trade and other payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method.
Impairment of financial assets
The Group and the Company use an impairment model that applies to financial assets measured at amortised cost and contract
assets and is detailed below. Financial assets at amortised cost include trade receivables, cash and cash equivalents, bonds
and deposits.
Performing financial assets
Stage 1 (0-30 Days)
From initial recognition of a financial asset to the date on which an asset has experienced a significant increase in credit risk
relative to its initial recognition, a stage 1 loss allowance is recognised equal to the credit losses expected to result from its
default occurring over the next 12 months (‘12-month ECL’).
Stage 2 (31-90 Days)
Following a significant increase in credit risk relative to the initial recognition of the financial asset, a stage 2 loss allowance is
recognised equal to the credit losses expected from all possible default events over the remaining lifetime of the asset (‘Lifetime
ECL’). The assessment of whether there has been a significant increase in credit risk requires considerable judgment, based on
the lifetime probability of default (‘PD’). Any financial asset that had been outstanding for greater than 30 days would be
assessed on an individual basis to determine if it qualified as a significant increase in credit risk. Stage 1 and 2 allowances are
held against performing loans; the main difference between stage 1 and stage 2 allowances is the time horizon. Stage 1
allowances are estimated using the PD with a maximum period of 12 months, while stage 2 allowances are estimated using the
PD over the remaining lifetime of the asset.
Impaired financial assets
Stage 3 (After 90 Days)
When a financial asset is considered to be credit-impaired, the allowance for credit losses (‘ACL’) continues to represent lifetime
expected credit losses, however, interest income is calculated based on the amortised cost of the asset, net of the loss
allowance, rather than its gross carrying amount.
The Group applies the ECL model to two main types of financial assets that are measured at amortised cost:
Trade receivables, to which the simplified approach (provision matrix) prescribed by IFRS 9 is applied. This approach requires
the recognition of a Lifetime ECL allowance on day one. In the normal course of operations, trade receivables could be
considered to be in default after 90 days.
Other financial assets at amortised cost, to which the general three stage model (described above) is applied, whereby a 12-
month ECL is recognised initially and the balance is monitored for significant increases in credit risk which triggers the
recognition of a Lifetime ECL allowance.
Webis Holdings plc
34
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Financial instruments continued
Impairment of financial assets continued
Impaired financial assets continued
ECLs are a probability-weighted estimate of credit losses. ECLs for financial assets that are not credit-impaired at the reporting
date are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due in accordance with
the contract and the cash flows that the Company expects to receive). ECLs for financial assets that are credit-impaired at the
reporting date are measured as the difference between the gross carrying amount and the present value of estimated future
cash flows. The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is
exposed to credit risk. The measurement of ECLs considers information about past events and current conditions, as well as
supportable information about future events and economic conditions. The Group reviews its impairment methodology for
estimating the ECLs, taking into account forward-looking information in determining the appropriate level of allowance. In
addition, it identifies indicators and set up procedures for monitoring for significant increases in credit risk.
Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
i. As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement/modification date. The right-of-use
asset is initially measured at cost, and subsequently at cost less accumulated depreciation and impairment loss and adjusted for
certain remeasurements of the lease liability.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of
the lease term.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted at the Group’s applicable incremental borrowing rate (if the rate implicit in the lease cannot be determined). The
Group has measured the incremental borrowing as equal to external borrowing rates. The lease liability is subsequently
increased by the interest cost of the lease liability and decreased by the lease payment made. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to
be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension
option is reasonably certain to be exercised, or a termination option is reasonably certain not to be exercised.
The Group has applied judgment to determine the lease term for some lease contracts in which it is a lessee that include
renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term,
which affects the amount of lease liabilities and right of use assets recognised.
The Group receives rent concessions on its racetrack lease when, due to external factors, the number of days raced in a
season is lower than the actual number of days scheduled to be raced.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and
makes certain adjustments to reflect the terms of the lease and the type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
- Fixed payments, including in-substance fixed payments;
- Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date;
- Amounts expected to be payable under a residual value guarantee; and
- The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional
renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease
unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in
future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount
expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a
purchase, extension, or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-
use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property in ‘property, equipment, and motor
vehicles’ and lease liabilities in ‘loans, borrowings and lease liabilities’ in the statement of financial position.
Webis Holdings plc
35
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Leases continued
i. As a lessee continued
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value items and short-term
leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the
lease term.
Employee benefits
(a) Pension obligations
The Group and the Company do not operate any post-employment schemes, including both defined benefit and defined
contribution pension plans.
(b) Short-term employee benefits
Short-term employee benefits, such as salaries, paid absences, and other benefits, are accounted for on an accrual’s basis
over the period in which employees have provided services in the year. All expenses related to employee benefits are
recognised in the Statement of Comprehensive Income in operating costs.
(c) Profit sharing and bonus plans
The Group and the Company recognises a liability and an expense for bonuses and profit sharing, based on a formula that
takes into consideration the profit attributable to the Company’s shareholders after certain adjustments. The Group and the
Company recognises a provision where contractually obliged or where there is a past practice that has created a constructive
obligation. Any recognised liability would be settled within 12 months of the year end.
Standards and interpretations in issue not yet adopted
A number of new standards, amendments to standards and interpretations are not yet effective for the year and have not been
applied in preparing these consolidated financial statements. The Directors do not expect the adoption of the standards and
interpretations to have a material impact on the Group’s financial statements in the period of initial application.
Standards
Effective date
(accounting periods
commencing on or after)
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
Classification of liabilities as Current or Non-Current and Non-current Liabilities with Covenants
(Amendments to IAS 1 Presentation of Financial Statements)
Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
1 January 2024
Lack of Exchangeability (Amendments to IAS 21)
Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures
(Amendments to FRS 10 and IAS 28)*
*The effective date of these amendments was deferred indefinitely. Early adoption continues to
be permitted.
1 January 2025
Webis Holdings plc
36
Notes to the Financial Statements continued
2 Operating Segments
A. Basis for segmentation
The Group has two operating segments, which are its reportable segments. The segments offer different services in relation to
various forms of pari-mutuel racing, which are managed separately due to the nature of their activities.
Reportable segments and operations provided
Racetrack operations – hosting of races through the management and operation of a racetrack facility, enabling patrons to
attend and wager on horse racing, as well as utilise simulcast facilities.
ADW operations – provision of online ADW services to enable customers to wager into global racetrack betting pools.
The Group’s Board of Directors review the internal management reports of the operating segment on a monthly basis.
B. Information about reportable segments
Information relating to the reportable segments is set out below. Segment revenue along with segment profit / (loss) before tax
are used to measure performance as management considers this information to be a relevant indicator for evaluating the
performance of the segments.
Reportable segments
Racetrack
2024
US$000
ADW
2024
US$000
Corporate
operating
costs
2024
US$000
Total
2024
US$000
External revenues
48,017
2,014
–
50,031
Segment revenue
48,017
2,014
–
50,031
Segment loss before tax
(101)
(817)
(145)
(1,063)
Interest expense
(53)
(5)
(146)
(204)
Depreciation and amortisation
(100)
(50)
(1)
(151)
Other material non-cash items:
-
Impairment movement on trade receivables
–
3
–
3
Segment assets
2,213
2,728
1,273
6,214
Segment liabilities
1,886
2,451
2,367
6,704
Reportable segments
Racetrack
2023
US$000
ADW
2023
US$000
Corporate
operating
costs
2023
US$000
Total
2023
US$000
External revenues
47,865
2,155
–
50,020
Segment revenue
47,865
2,155
–
50,020
Segment profit / (loss) before tax
46
(674)
(117)
(745)
Interest expense
(58)
(3)
(99)
(160)
Depreciation and amortisation
(98)
(42)
(2)
(142)
Other material non-cash items:
-
Impairment movement on trade receivables
–
(2)
–
(2)
Segment assets
2,187
2,846
1,293
6,326
Segment liabilities
1,523
2,802
1,428
5,753
Webis Holdings plc
37
Notes to the Financial Statements continued
2 Operating Segments continued
C. Reconciliations of information on reportable segments to the amounts reported in the financial statements
2024
US$000
2023
US$000
i. Revenues
Total revenue for reportable segments
50,031
50,020
Consolidated revenue
50,031
50,020
ii. Loss before tax
Total loss before tax for reportable segments
(918)
(628)
Loss before tax for other segments
(145)
(117)
Consolidated loss before tax
(1,063)
(745)
iii. Assets
Total assets for reportable segments
4,941
5,033
Assets for other segments
1,273
1,293
Consolidated total assets
6,214
6,326
iv. Liabilities
Total liabilities for reportable segments
4,337
4,325
Liabilities for other segments
2,367
1,428
Consolidated total liabilities
6,704
5,753
v. Other material items
Interest expense
(204)
(160)
Depreciation and amortisation
(151)
(142)
Impairment movement on trade receivables
3
(2)
There were no reconciling items noted between Segment information and the Financial Statements.
D. Geographic information
i. Revenues
The below table analyses the geographic location of the customer base of the operating segments.
2024
US$000
2023
US$000
Revenue
Racetrack operations
North America
48,017
47,865
ADW operations
North America
1,479
1,701
ADW operations
British Isles
459
428
ADW operations
Caribbean
76
26
50,031
50,020
Webis Holdings plc
38
Notes to the Financial Statements continued
2 Operating Segments continued
D.
Geographic information continued
ii. Non-current assets
The geographical information below analyses the Group’s non-current assets by the Company’s Country of Domicile (Isle of
Man) and the United States of America. Information is based on geographical location of the Group’s assets.
2024
US$000
2023
US$000
United States of America
583
679
Isle of Man
–
2
583
681
Non-current assets exclude financial instruments. During the year, additions to non-current assets for the reportable segments
were Racetrack US$ Nil (2023: US$ 13,000) and ADW US$ 53,000 (2023: US$ 74,000).
E. Major customers
The Group does not earn revenue of 10% or more from any external customer.
3 Operating loss
Operating loss is stated after charging:
2024
US$000
2023
US$000
Auditors’ remuneration — audit
156
146
Depreciation of property, equipment, and motor vehicles
139
137
Amortisation of intangible assets
12
5
Exchange losses / (gains)
4
(9)
Directors’ fees
94
105
4 Finance costs
2024
US$000
2023
US$000
Bank interest receivable
11
7
Loan and lease interest payable
(204)
(160)
Net finance costs
(193)
(153)
5 Staff numbers and cost
2024
2023
Average number of employees – Pari-mutuel and Racetrack Operations
55
50
The aggregate payroll costs of these persons were as follows:
Pari-mutuel and Racetrack Operations
2024
US$000
2023
US$000
Wages and salaries
1,678
1,694
Social security costs
122
121
1,800
1,815
Webis Holdings plc
39
Notes to the Financial Statements continued
6 Income tax expense
(a) Current and Deferred Tax Expenses
The current and deferred tax expenses for the year were US$ Nil (2023: US$ Nil). Despite having made losses, no deferred tax
was recognised as there is no reasonable expectation that the Group will recover the resultant deferred tax assets.
(b) Tax Rate Reconciliation
2024
US$000
2023
US$000
Loss before tax
(1,063)
(745)
Tax charge at IOM standard rate (0%)
–
–
Adjusted for:
Tax credit for US tax losses (at 21%)
(219)
(153)
Add back tax losses not recognised
219
153
Tax charge for the year
–
–
The maximum deferred tax asset that could be recognised at year end is approximately US$ 1,380,000 (2023: US$ 1,161,000).
The Group has not recognised any asset as it might not be recoverable within the allowed period. The tax losses for tax years
beginning in January 2018 are currently permitted to be carried forward indefinitely. Tax losses incurred prior to that period
expire after 20 years.
7 Earnings per ordinary share
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year.
The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares,
on the assumed conversion of all dilutive share options.
An adjustment for the dilutive effect of share options in the current period has not been reflected in the calculation of the diluted
loss per share, as the effect would have been anti-dilutive.
2024
US$000
2023
US$000
Loss for the year
(1,063)
(745)
No.
No.
Weighted average number of ordinary shares in issue
393,338,310
393,338,310
Dilutive element of share options if exercised (note 16)
14,000,000
14,000,000
Diluted number of ordinary shares
407,338,310
407,338,310
Basic earnings per share (cents)
(0.27)
(0.19)
Diluted earnings per share (cents)
(0.27)
(0.19)
The earnings applied are the same for both basic and diluted earnings calculations per share as there are no dilutive effects to
be applied.
Webis Holdings plc
40
Notes to the Financial Statements continued
8 Intangible assets
Software & development costs
Total
Group
US$000
Company
US$000
Group
US$000
Company
US$000
Cost
Balance at 1 June 2022
612
15
612
15
Additions during the year
13
–
13
–
Disposals/decommissioned assets
(8)
(1)
(8)
(1)
Balance at 31 May 2023
617
14
617
14
Balance at 1 June 2023
617
14
617
14
Additions during the year
50
–
50
–
Balance at 31 May 2024
667
14
667
14
Amortisation and Impairment
Balance at 1 June 2022
601
15
601
15
Amortisation for the year
5
–
5
–
Disposals/decommissioned assets
(8)
(1)
(8)
(1)
Balance at 31 May 2023
598
14
598
14
Balance at 1 June 2023
598
14
598
14
Amortisation for the year
12
–
12
–
Balance at 31 May 2024
610
14
610
14
Carrying amounts
At 1 June 2022
11
–
11
–
At 31 May 2023
19
–
19
–
At 31 May 2024
57
–
57
–
The Group reviews intangible assets annually for impairment or more frequently if there are indications that the intangible
assets may be impaired (see note 1). The carrying amount of US$ 57,000 of software and development costs relates primarily
to development and integration costs of the US based wagering website. These assets will be fully amortised within the next 3
years.
.
Webis Holdings plc
41
Notes to the Financial Statements continued
9 Property, equipment, and motor vehicles
Group
Computer
Equipment
US$000
Fixtures,
Fittings &
Track
Equipment
US$000
Motor
Vehicles
US$000
Right-of-
use Assets
US$000
Total
US$000
Cost
Balance at 1 June 2022
166
321
50
945
1,482
Additions during the year
–
13
–
61
74
Disposals/decommissioned assets
(49)
–
–
(118)
(167)
Balance at 31 May 2023
117
334
50
888
1,389
Balance at 1 June 2023
117
334
50
888
1,389
Additions during the year
3
–
–
–
3
Balance at 31 May 2024
120
334
50
888
1,392
Depreciation
Balance at 1 June 2022
163
268
31
296
758
Charge for the year
2
20
7
108
137
Disposals/decommissioned assets
(49)
–
–
(118)
(167)
Balance at 31 May 2023
116
288
38
286
728
Balance at 1 June 2023
116
288
38
286
728
Charge for the year
1
23
7
108
139
Balance at 31 May 2024
117
311
45
394
867
Carrying amounts
At 1 June 2022
3
53
19
649
724
At 31 May 2023
1
46
12
602
661
At 31 May 2024
3
23
5
494
525
Company
Computer
Equipment
US$000
Fixtures &
Fittings
US$000
Total
US$000
Cost
Balance at 1 June 2022
37
80
117
Additions during the year
–
–
–
Balance at 31 May 2023
37
80
117
Balance at 1 June 2023
37
80
117
Additions during the year
–
–
–
Balance at 31 May 2024
37
80
117
Webis Holdings plc
42
Notes to the Financial Statements continued
9 Property, equipment and motor vehicles continued
Company
Computer
Equipment
US$000
Fixtures &
Fittings
US$000
Total
US$000
Depreciation
Balance at 1 June 2022
34
80
114
Charge for the year
2
–
2
Balance at 31 May 2023
36
80
116
Balance at 1 June 2023
36
80
116
Charge for the year
1
–
1
Balance at 31 May 2024
37
80
117
Carrying amounts
At 1 June 2022
3
–
3
At 31 May 2023
1
–
1
At 31 May 2024
–
–
–
10 Investments in Subsidiaries
Investments in subsidiaries are held at cost less impairment. Details of investments are as follows:
Subsidiaries
Country of
incorporation
Activity
2024
Holding (%)
2023
Holding (%)
WatchandWager.com Limited
Isle of Man
Operation of interactive wagering
totaliser hub
100
100
WatchandWager.com LLC
United States of
America
Operation of interactive wagering
totaliser hub and harness racetrack
100
100
betinternet.com (IOM) Limited
Isle of Man
Dormant
100
100
A wholly owned subsidiary, Technical Facilities & Services Limited, was dissolved during the 31 May 2023 financial year.
Impairment assessment is performed annually, and this involves assessment of the net asset value and profitability of the
subsidiaries.
11 Bonds and deposits
2024
US$000
2023
US$000
Bonds and deposits - expire within one year
883
883
Bonds and deposits - expire within one to two years
–
–
Bonds and deposits - expire within two to five years
–
–
Bonds and deposits - expire more than five years
100
100
983
983
Cash bonds of US$ 875,000 have been paid as security deposits in relation to various US State ADW licences (2023: US$
875,000). These cash bonds are held in trust accounts used exclusively for cash collateral, with financial institutions which
Webis Holdings plc
43
Notes to the Financial Statements continued
11 Bonds and deposits continued
have been screened for their financial strength and capitalization ratio. The financial institutions have a credit rating of A-
Excellent from AM Best credit rating agency. Therefore, these bonds are considered to be fully recoverable. A rent deposit of
US$ 100,000 is held by California Exposition & State Fair and is for a term ending in 2030 (2023: US$ 100,000). This is held
by an entity of the Californian state government and is therefore considered fully recoverable. Rent and other security
deposits total US$ 8,168 (2023: US$ 8,167). These deposits are repayable upon completion of the relevant lease term, under
the terms of legally binding agreements. The fair value of the bonds and deposits approximates to the carrying value.
12 Cash, cash equivalents and restricted cash
Group
Company
2024
US$000
2023
US$000
2024
US$000
2023
US$000
Cash and cash equivalents – Company and other
funds
2,410
2,148
218
116
Restricted cash – protected player funds
1,011
1,137
985
1,111
Total cash, cash equivalents and restricted
cash
3,421
3,285
1,203
1,227
The Group holds funds for operational requirements and for its non-Isle of Man customers, shown as ‘Company and other
funds’ and on behalf of its Isle of Man regulated customers and certain USA state customers, shown as ‘protected player funds’.
Protected player funds are held in fully protected client accounts within an Isle of Man regulated bank and in segregated
accounts within a USA regulated bank. These funds are segregated from operational funds of the Company and are held on
trust for the customers entitled to them.
13 Trade and other receivables
Group
Company
2024
US$000
2023
US$000
2024
US$000
2023
US$000
Trade receivables
325
612
–
–
Amounts due from Group undertakings
–
–
1,494
680
Other receivables and prepayments
903
766
70
65
1,228
1,378
1,564
745
Included within trade receivables are impairment provisions of US$ 65,566 (see note 20), (2023: US$ 68,837). Other
receivables include accrued and other income due to the Group, along with sundry other debtors. Amounts due from Group
undertakings are unsecured, interest free and repayable on demand.
14 Trade and other payables
Group
Company
2024
US$000
2023
US$000
2024
US$000
2023
US$000
Trade payables
597
436
9
8
Amounts due to customers
1,945
2,089
–
–
Taxes and national insurance
22
18
2
2
Accruals and other payables
1,284
1,169
73
68
3,848
3,712
84
78
Other payables include distributions and purses payable for the racetrack operations, along with sundry other payables.
Webis Holdings plc
44
Notes to the Financial Statements continued
15 Loans, borrowings, and lease liabilities
Current liabilities
Group
Company
2024
US$000
2023
US$000
2024
US$000
2023
US$000
Unsecured loans (current portion)
20
21
–
–
Lease liabilities (current portion)
100
91
–
–
Secured loans – Galloway Limited
850
350
850
350
970
462
850
350
Non-current liabilities
Group
Company
2024
US$000
2023
US$000
2024
US$000
2023
US$000
Unsecured loans (non-current portion)
–
26
–
–
Lease liabilities (non-current portion)
453
553
–
–
Secured loans – Galloway Limited
1,433
1,000
1,433
1,000
1,886
1,579
1,433
1,000
Terms and repayment schedule
Nominal
interest rate
Year of
maturity
2024
Total
US$000
2023
Total
US$000
Unsecured loans
1.00-8.90%
2025
20
47
Lease liabilities
6.00-9.50%
2023-30
553
644
Secured loan 2017 - Galloway Limited*
7.75%
2027
–
500
Secured loan 2019 - Galloway Limited*
7.00%
2024
350
350
Secured loan 2020 - Galloway Limited*
7.00%
2025
500
500
Secured loan 2023 - Galloway Limited*
11.00%
2028
1,433
–
Total loans and borrowings
2,856
2,041
During 2022, the Group received an unsecured Paycheck Protection Program (“PPP”) loan for US$ 48,427, which matures on 7
May 2025 and attracts interest at 1% per annum.
The secured loans from Galloway Limited are secured over the unencumbered assets of the Group, which includes the Cash
and cash equivalents – Company and other funds of US$ 2,410,000 (2023: US$ 2,148,000) and Cash bonds of US$ 875,000
(2023: US$ 875,000). In September 2023, the Group obtained additional financing from Galloway Limited, which included the
Secured loan 2017 of US$ 500,000, being rolled into this financing.
In November 2024, the Group has agreed additional funding from Galloway Limited of US$ 920,000, with the Secured loan
2019 of US$ 350,000, being rolled into the new financing (see note 22).
*The fair value of the Galloway Limited loans approximates to the carrying value.
Webis Holdings plc
45
Notes to the Financial Statements continued
15 Loans, borrowings and lease liabilities continued
Reconciliation of movements of liabilities to cash flows arising from financing activities
Other loans and
borrowings
US$000
Lease liabilities
US$000
Total
US$000
Balance at 1 June 2022
1,417
672
2,089
Changes from financing cash flows
Proceeds from loans, borrowings, and lease liabilities
–
59
59
Repayment of borrowings
(20)
–
(20)
Payment of lease liabilities
–
(148)
(148)
Rent concession received
–
18
18
Interest paid
(101)
(59)
(160)
Total changes from financing cash flows
(121)
(130)
(251)
Other changes
Liability-related
New leases
–
61
61
Rent concession received
–
(18)
(18)
Interest expense
101
59
160
Total liability-related other changes
101
102
203
Balance at 31 May 2023
1,397
644
2,041
Balance at 1 June 2023
1,397
644
2,041
Changes from financing cash flows
Proceeds from loans, borrowings, and lease liabilities
1,433
57
1,490
Repayment of borrowings
(527)
–
(527)
Payment of lease liabilities
–
(148)
(148)
Interest paid
(147)
(57)
(204)
Total changes from financing cash flows
759
(148)
611
Other changes
Liability-related
Interest expense
147
57
204
Total liability-related other changes
147
57
204
Balance at 31 May 2024
2,303
553
2,856
Webis Holdings plc
46
Notes to the Financial Statements continued
16 Share capital
No.
2024
US$000
2023
US$000
Allotted, issued, and fully paid
At beginning and close of year: ordinary shares of 1p each
393,338,310
6,334
6,334
At 31 May: ordinary shares of 1p each
393,338,310
6,334
6,334
The authorised share capital of the Company is US$ 9,619,000 divided into 600,000,000 ordinary shares of £0.01 each (2023:
US$ 9,619,000 divided into 600,000,000 ordinary shares of £0.01 each). This is the sole class of shares authorised and issued
by the Company and these shares convey the right for shareholders to vote at general meetings, to receive dividends and to
receive surplus assets on the liquidation of the Company. There are no preferences or restrictions attached to these shares.
Neither the Company, nor its subsidiaries, hold any shares in the Company. Share options are shown below.
Options
Movements in share options during the year were as follows:
2024
2023
At start of year – number of 1p ordinary shares
14,000,000
14,000,000
Options granted
–
–
Options lapsed
–
–
Options exercised
–
–
At end of year – number of 1p ordinary shares
14,000,000
14,000,000
The options were issued on 3 March 2016 to Ed Comins, Managing Director of the Group and vested on 3 March 2019. The
options expire on 2 March 2026. The weighted average exercise price of all options is £0.01.
17 Capital commitments
As at 31 May 2024, the Group had no capital commitments (2023: US$ Nil).
18 Leases
A. Leases as lessee
The Group leases office and racetrack facilities. The office facility is leased until May 2025, with an average length of renewal of
between two to three years. The racetrack facility is leased until May 2030, with extensions or renewals typically ranging
between three to five years. Extension/renewal is only available to lessor on terms and conditions to be agreed between both
parties. All currently available options to extend have been exercised.
The Group also leases additional office facilities with contract terms of no more than one year. These leases are short-term, and
the Group has elected not to recognise right-of-use assets and lease liabilities for these leases.
Information about leases for which the Group is a lessee is presented below.
i. Right-of-use assets
Right-of-use assets related to leased properties that do not meet the definition of investment property are presented within
property, equipment, and motor vehicles.
Webis Holdings plc
47
Notes to the Financial Statements continued
18 Leases continued
A. Leases as lessee continued
i. Right of use assets continued
Group
Property
US$000
Total
US$000
Cost
Balance at 1 June 2022
945
945
Additions during the year
61
61
Disposals during the year
(118)
(118)
Balance at 31 May 2023
888
888
Balance at 1 June 2023
888
888
Additions during the year
–
–
Balance at 31 May 2024
888
888
Depreciation
Balance at 1 June 2022
296
296
Charge for the year
108
108
Disposals during the year
(118)
(118)
Balance at 31 May 2023
286
286
Balance at 1 June 2023
286
286
Charge for the year
108
108
Balance at 31 May 2024
394
394
Carrying amounts
At 1 June 2022
649
649
At 31 May 2023
602
602
At 31 May 2024
494
494
ii.
Amounts recognised in profit or loss
2024
US$000
2023
US$000
Interest on lease liabilities
57
59
Depreciation expense
108
108
Rent concessions received
–
(18)
Expenses relating to short-term leases
68
59
iii. Amounts recognised in statement of cash flows
2024
US$000
2023
US$000
Payment of lease liabilities - principal
(91)
(89)
Payment of lease liabilities - interest
(57)
(59)
Rent concessions received
–
18
Webis Holdings plc
48
Notes to the Financial Statements continued
19 Related party transactions
Identity of related parties
The Parent Company has a related party relationship with its subsidiaries (see note 10), and with its Directors and executive
officers and with Burnbrae Ltd (significant shareholder).
Transactions and balances with and between subsidiaries
Transactions with and between the subsidiaries in the Group, which have been eliminated on consolidation, are considered to
be related party transactions. During the year, Webis Holdings plc recharged head office costs to WatchandWager.com Ltd of
US$ 259,962 (2023: US$ 238,104) and to WatchandWager.com LLC of US$ 389,944 (2023: US$ 357,156).
WatchandWager.com LLC recharged support costs of US$ 7,831 (2023: US$ 8,120) to WatchandWager.com Ltd. At the year
end, Webis Holdings plc had receivable balances with WatchandWager.com Ltd of US$ 971,639 (2023: US$ 168,575) and with
WatchandWager.com LLC of US$ 522,178 (2023: US$ 511,166). WatchandWager.com Ltd had a receivable balance of US$
8,485,256 (2023: US$ 7,656,283) with WatchandWager.com LLC. There were no impairments on these balances.
Transactions and balances with entities with significant influence over the Group
Rental and service charges of US$ 43,365 (2023: US$ 41,617) and Directors’ fees of US$ 43,987 (2023: US$ 38,681) were
charged in the year by Burnbrae Limited, of which Denham Eke is a common Director and Katie Errock an employee. Trade
payables at the year-end of US$ 3,582 (2023: US$ 3,580) related to rental and service charges. The Group also had loans of
US$ 2,282,555 (2023: US$ 1,350,000) from Galloway Limited, a company related to Burnbrae Limited by common ownership
and Directors (note 15). Interest expense of US$ 146,268 (2023: US$ 99,498) was paid on these loans.
Transactions with key management personnel
The total amounts for Directors’ remuneration during the year were as follows:
2024
US$000
2023
US$000
Emoluments — salaries, bonuses, and taxable benefits
373
368
— fees
94
105
467
473
Directors’ Emoluments
Basic
salary
US$000
Fees
US$000
Bonus
US$000
Termination
payments
US$000
Benefits
US$000
2024
Total
US$000
2023
Total
US$000
Executive
Ed Comins
341
—
—
—
32
373
368
Non-executive
Denham Eke*
—
25
—
—
—
25
24
Sir James Mellon
—
2
—
—
—
2
18
Richard Roberts
—
48
—
—
—
48
48
Katie Errock*
—
19
—
—
—
19
15
Aggregate emoluments
341
94
—
—
32
467
473
* Paid to Burnbrae Limited.
14,000,000 share options were issued to Ed Comins (see note 16) during 2016.
Webis Holdings plc
49
Notes to the Financial Statements continued
20 Financial risk management
Capital structure
The Group’s capital structure is as follows:
2024
US$000
2023
US$000
Cash and cash equivalents
2,410
2,148
Loans and similar liabilities
(2,303)
(1,397)
Net funds
107
751
Shareholders’ equity
490
(573)
Capital employed
597
178
The Group’s policy is to maintain as strong a capital base as possible, insofar as can be sustained due to the fluctuations in the
net results of the Group and the inherent effect this has on the capital structure. The Group monitors costs on an ongoing basis
and undertakes actions to grow revenue, with the aim of improving the Group’s capital base. The Group does not have any
external capital requirements imposed upon it.
The Group’s principal financial instruments comprise cash and cash equivalents, trade receivables and payables that arise
directly from its operations.
The main purpose of these financial instruments is to finance the Group’s operations. The existence of the financial instruments
exposes the Group to a number of financial risks, which are described in more detail below.
The principal risks which the Group is exposed to relate to liquidity risks, credit risks and foreign exchange risks.
Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet its financial obligations as they fall due.
The Group’s objective is to maintain continuity of funding through trading and share issues but to also retain flexibility through
the use of short-term loans if required.
Management controls and monitors the Group’s cash flow on a regular basis, including forecasting future cash flow. Banking
facilities are kept under review to ensure they meet the Group’s requirements. Funds equivalent to customer balances are held
in designated bank accounts where applicable to ensure that Isle of Man Gambling Supervision Commission player protection
principles are met. Other customer balances are covered by cash funds held within the Group and by receivables due from
ADW racetrack settlement partners. The Directors anticipate that the business will maintain sufficient cash flow in the
forthcoming period, to meet its immediate financial obligations.
The following are the contractual maturities of financial assets and financial liabilities:
2024
Financial assets
Carrying
amount
US$000
Contractual
cash flow
US$000
6 months
or less
US$000
Up to
1 year
US$000
1–5
years
US$000
5+
years
US$000
Cash, cash equivalents and restricted cash
3,421
3,421
3,421
–
–
–
Trade receivables
325
325
325
–
–
–
Other receivables
773
773
773
–
–
–
Bonds and deposits
983
983
680
203
–
100
5,502
5,502
5,199
203
–
100
Webis Holdings plc
50
Notes to the Financial Statements continued
20 Financial risk management continued
Liquidity risk continued
2023
Financial assets
Carrying
amount
US$000
Contractual
cash flow
US$000
6 months
or less
US$000
Up to
1 year
US$000
1–5
years
US$000
5+
years
US$000
Cash, cash equivalents and restricted cash
3,285
3,285
3,285
–
–
–
Trade receivables
612
612
612
–
–
–
Other receivables
645
645
645
–
–
–
Bonds and deposits
983
983
683
200
–
100
5,525
5,525
5,225
200
–
100
2024
Financial liabilities
Carrying
amount
US$000
Contractual
cash flow
US$000
6 months
or less
US$000
Up to
1 year
US$000
1–5
years
US$000
5+
years
US$000
Trade payables
(597)
(597)
(597)
–
–
–
Amounts due to customers
(1,945)
(1,945)
(1,945)
–
–
–
Other payables and loans
(3,111)
(3,873)
(1,281)
(623)
(1,969)
–
Lease liabilities
(553)
(724)
(27)
(123)
(460)
(114)
(6,206)
(7,139)
(3,850)
(746)
(2,429)
(114)
2023
Financial liabilities
Carrying
amount
US$000
Contractual
cash flow
US$000
6 months
or less
US$000
Up to
1 year
US$000
1–5
years
US$000
5+
years
US$000
Trade payables
(436)
(436)
(436)
–
–
–
Amounts due to customers
(2,089)
(2,089)
(2,089)
–
–
–
Other payables and loans
(2,153)
(2,372)
(815)
(406)
(1,151)
–
Lease liabilities
(644)
(872)
(27)
(122)
(493)
(230)
(5,322)
(5,769)
(3,367)
(528)
(1,644)
(230)
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge
an obligation.
Impairment losses on financial assets recognised in profit or loss were as follows:
2024
US$000
2023
US$000
Non-credit impaired trade receivables
4
7
Credit impaired trade receivables
62
62
Total impairment losses
66
69
Webis Holdings plc
51
Notes to the Financial Statements continued
20 Financial risk management continued
Credit risk continued
The Group’s exposure to credit risk is influenced by the characteristics of the individual racetracks and the settling agents
operating on behalf of these tracks. The racetracks themselves are influenced by many factors, including the product they offer,
supporting sources of revenue they might generate, such as offering simulcast, slots or sports wagering facilities, current
economic conditions, ownership structure, state laws and so on, all of which may affect their liquidity and ability to operate.
The Group limits its exposure to credit risk by regular settling and verification of balances due to and from settling agents, with
standard terms of one month. While there is on occasion debt that is slower to be settled, historical settlements for at least the
last six years show that of the current trade receivable balance, greater than 99% would be expected to be received.
In addition, the majority of the current Group customers have transacted with the Group for five years or more and none of
these customers balances have been specifically impaired in that period.
The Group has continued to take a conservative approach to the assessment of the Weighted Average Loss Rate and
maintained rates that are considered to reflect the risk that exists under current market conditions.
The following table provides information about exposure to credit risk and expected credit losses for trade receivables as at 31
May 2024:
2024
Weighted
Average
Loss Rate
(%)
Gross
Carrying
Amount
US$000
Loss
Allowance
US$000
Net
Carrying
Amount
US$000
Credit
Impaired
Current (not past due)
0.50%
245
(1)
244
No
1-30 days past due
1.00%
57
(1)
56
No
31-60 days past due
3.00%
10
—
10
No
61-90 days past due
5.00%
7
(1)
6
No
More than 90 days past due
7.00%
10
(1)
9
No
More than 90 days past due
100.00%
62
(62)
—
Yes
391
(66)
325
2023
Weighted
Average Loss
Rate (%)
Gross Carrying
Amount
US$000
Loss Allowance
US$000
Net Carrying
Amount
US$000
Credit Impaired
Current (not past due)
0.50%
421
(2)
419
No
1-30 days past due
1.00%
110
(1)
109
No
31-60 days past due
3.00%
70
(2)
68
No
61-90 days past due
5.00%
6
(1)
5
No
More than 90 days past due
7.00%
12
(1)
11
No
More than 90 days past due
100.00%
62
(62)
—
Yes
681
(69)
612
The Group uses an allowance matrix to measure the ECLs of trade receivables from racetracks and their settling agents, which
comprise a moderate number of balances, ranging from small to large. The Group has reviewed its historical losses over the
past four years as well as considering current economic conditions in estimating the loss rates and calculating the
corresponding loss allowance.
Webis Holdings plc
52
Notes to the Financial Statements continued
20 Financial risk management continued
Credit risk continued
Classes of financial assets — carrying amounts
2024
US$000
2023
US$000
Cash and cash equivalents
2,410
2,148
Bonds and deposits
983
983
Trade and other receivables
1,101
1,258
4,494
4,389
Generally, the maximum credit risk exposure of financial assets is the carrying amount of the financial assets as shown on the
face of the Statements of Financial Position (or in the notes to the financial statements). Credit risk, therefore, is only disclosed
in circumstances where the maximum potential loss differs significantly from the financial asset’s carrying amount.
The maximum exposure to credit risks for receivables in any business segment:
2024
US$000
2023
US$000
Pari-mutuel
1,101
1,258
Of the above receivables, US$ 325,000 (2023: US$ 612,000) relates to amounts owed from racing tracks. These receivables
are actively monitored to avoid significant concentration of credit risk, and the Directors consider there to be no significant
concentration of credit risk.
The Directors consider that all the above financial assets that are not impaired for each of the reporting dates under review are
of good credit quality. The banks have external credit ratings of at least Baa3 from Moody’s.
The credit risk for liquid funds and other short-term financial assets is considered negligible since the counterparties are
reputable banks with high-quality external credit ratings.
Interest rate risk
The Group finances its operations mainly through capital with limited levels of borrowings. Cash at bank and in hand earns
negligible interest at floating rates, based principally on short-term interbank rates.
Any movement in interest rates would not be considered to have any significant impact on net assets at the balance sheet date
as the Group and Parent Company do not have floating rate loans payable.
Foreign currency risks
The Group operates internationally and is subject to transactional foreign currency exposures, primarily with respect to Pounds
Sterling, Hong Kong Dollars, and Euros.
The Group does not actively manage the exposures but regularly monitors the Group’s currency position and exchange rate
movements and makes decisions as appropriate.
At the reporting date the Group had the following exposure:
2024
USD
US$000
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
Current assets
4,200
550
97
557
5,404
Current liabilities
(3,847)
(269)
(41)
(639)
(4,796)
Short-term exposure
353
281
56
(82)
608
Webis Holdings plc
53
Notes to the Financial Statements continued
20 Financial risk management continued
Foreign currency risks continued
2023
USD
US$000
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
Current assets
4,703
114
86
523
5,426
Current liabilities
(3,146)
(334)
(43)
(633)
(4,156)
Short-term exposure
1,557
(220)
43
(110)
1,270
The following table illustrates the sensitivity of the net result for the year and equity with regards to the Group’s financial assets
and financial liabilities and the US Dollar–Sterling exchange rate, US Dollar–Euro exchange rate and US Dollar–Hong Kong
Dollar exchange rate.
A 5% weakening of the US Dollar against the following currencies at 31 May 2024 would have increased / (decreased) equity
and profit and loss by the amounts shown below:
2024
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
Current assets
28
5
28
61
Current liabilities
(14)
(2)
(32)
(48)
Net assets
14
3
(4)
(13)
2023
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
Current assets
6
4
26
36
Current liabilities
(17)
(2)
(32)
(51)
Net assets
(11)
2
(6)
(15)
A 5% strengthening of the US Dollar against the above currencies would have had the equal but opposite effect on the above
currencies to the amounts shown above on the basis that all other variables remain constant.
21 Controlling party and ultimate controlling party
The Directors consider the ultimate controlling party to be Burnbrae Limited and its beneficial owner Jim Mellon by virtue of their
combined shareholding of 63.10%.
22 Subsequent events
In November 2024, the Group has agreed funding of US$ 920,000 from Galloway Limited (related entity), in the form of a 5 year
term loan, which will support the Group’s working capital requirements. The loan will accrue interest at the rate of 13% per
annum and is secured against the unencumbered assets of the Group. The loan comprises US$ 550,000 in respect of new
funding and an existing debt of US$ 350,000 (plus US$ 20,000 of accrued interest), due and outstanding by the Group to
Galloway Limited (see note 15).
In addition, in November 2024, the Company announced that it intends to seek shareholder approval for the cancellation of the
admission of its Ordinary Shares to trading on AIM, which if approved by shareholders, would be effective in January 2025.
Webis Holdings plc
54
Company Information
Directors
Denham Eke
Non-Executive Chair
Ed Comins
Managing Director
Richard Roberts
Independent Non-Executive Director
Katie Errock
Non-Executive Director
Jim Mellon
Non-Executive Director
Company Secretary
Katie Errock
Registered Office
Viking House
Nelson Street
Douglas, Isle of Man
IM1 2AH
Bankers
Standard Bank Isle of Man
Standard Bank House
One Circular Road
Douglas
Isle of Man
IM1 1SB
Auditor
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas, Isle of Man
IM1 1LA
Nominated Adviser and Broker
Beaumont Cornish Limited
Building 3, Chiswick Park
566 Chiswick High Road
London
W4 5YA
Legal Advisors
Long & Co Limited
Eyreton
Quarterbridge Road
Douglas
Isle of Man
IM2 3RF
UK Registrar
Link Asset Services
The Registry, 34 Beckenham Road
Beckenham
Kent
BR3 4TU
Corporate Website
www.webisholdingsplc.com
Twitter
@WebisHoldings
Webis Holdings plc
55
Webis Holdings plc
Viking House, Nelson Street
Douglas, Isle of Man
IM1 2AH, British Isles
Email: ir@webisholdingsplc.com
Website: www.webisholdingsplc.com