Tuesday June 10, 09:05 AM
Betbrokers slumps as expectations reduced
LONDON (ShareCast) - Broker and clearing house for the sports betting industry Betbrokers (LSE: BETB.L - news) has reduced the market's
expectations for the year and said revenues for the full year will be lower.The group said despite significant demand for its product and services in the UK, a lack of available funds in the clearing house account has "severely" restricted the value of bets that it can take. "Accordingly, despite the positive impact of a reduced marketing spend and a reduction in headcount, current trading performance has declined and it has become necessary to reduce the market's expectations," said the group. It added that although it will be profitable and cash generative for the full year to December 2008, revenues are expected to be lower. The group raised £495,000 in March through the issue of secured loan notes but said today that these funds will be "insufficient" to meet the market's expectation in light of recent trading. The average deal size in May 2008 was £424.28 compared with £1,370 in the same month last year. The group said the reduction is due to the company having to turn down a majority of bets due to a lack of available funds in the clearing house. "I am disappointed that the lack of available funding within the clearing house has had a detrimental impact on the company's UK performance for the period," said chief executive and chairman Wayne Lochner. Betbrokers said it is looking to strengthen its board and is considering a share consolidation to reduce the volatility and spread associated with the current share price.
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