Bad news for Webis
News on 19 Oct 2018
News on 19 Oct 2018
Betting company WatchandWager in the Webis group had bad news for investors Friday, reporting that it has lost a US client and has had to refund $10 million.
The news sent the Webis share price into a downward 25 percent spiral Friday morning after the company issued a statement explaining that following the loss of a major US b2b client (which cannot be identified for reasons of confidentiality), WatchandWager has refunded the client’s player balances amounting to $10 million and has ended the business relationship.
The large refund leaves Webis with just $3.1 million in cash assets, and according to Webis the loss of the business will result in a reduction in margin for the fiscal year ended May 2019 of $800,000.
Webis reported gross profit of $5.3 million in its most recent annual report for the year to May 2017.
WatchandWager has been making good b2b progress in the States, and holds pari-mutuel licences for its ADW business in eight US states, including California and New York. Another Webis division, WatchandWager.com LLC, operates Cal Expo Harness Racetrack in Sacramento, California.
Taking a positive note. Webis notes that measures to improve business efficiency are in train, and that in addition to new clients WatchandWager has a healthy potential pipeline of companies with which it is in discussions.
“While these initiatives alone are unlikely to replace gross margin in the short-term, the early indications are that the current client base is both wagering successfully and growing in scale,” Webis advises. “This strategy does have the benefit of removing the primary business risk, being that of concentration and over reliance on one single entity.”
News on 19 Oct 2018
Betting company WatchandWager in the Webis group had bad news for investors Friday, reporting that it has lost a US client and has had to refund $10 million.
The news sent the Webis share price into a downward 25 percent spiral Friday morning after the company issued a statement explaining that following the loss of a major US b2b client (which cannot be identified for reasons of confidentiality), WatchandWager has refunded the client’s player balances amounting to $10 million and has ended the business relationship.
The large refund leaves Webis with just $3.1 million in cash assets, and according to Webis the loss of the business will result in a reduction in margin for the fiscal year ended May 2019 of $800,000.
Webis reported gross profit of $5.3 million in its most recent annual report for the year to May 2017.
WatchandWager has been making good b2b progress in the States, and holds pari-mutuel licences for its ADW business in eight US states, including California and New York. Another Webis division, WatchandWager.com LLC, operates Cal Expo Harness Racetrack in Sacramento, California.
Taking a positive note. Webis notes that measures to improve business efficiency are in train, and that in addition to new clients WatchandWager has a healthy potential pipeline of companies with which it is in discussions.
“While these initiatives alone are unlikely to replace gross margin in the short-term, the early indications are that the current client base is both wagering successfully and growing in scale,” Webis advises. “This strategy does have the benefit of removing the primary business risk, being that of concentration and over reliance on one single entity.”
