CEO Address to AGM
Firstly, I would like to take the opportunity to thank you for your continued support over the last year.
During my address, I will be explaining our ongoing strategy, outlining why we're so excited about this market opportunity, explaining how we intend to execute our plans and what we expect in terms of financials in the short to medium term.
RECENT BUSINESS DEVELOPMENTS
As you're all likely to be aware, we have made a strategic decision to focus the business on products developed for the B2B wagering market. It was with this strategy in mind that we acquired both the GBS and Dynamic Odds businesses. Our vision is to become the leading data, analytics, and service provider for wagering operators globally, specialising in racing (in the first instance).
We see a growing market for data, product and informatics for wagering operators not only in Australia but internationally.
Further, the Australian wagering market has changed with regulators and government increases in taxes, which has created a need for operators to look at alternative solutions that can increase products, and increase margin while reducing overheads.
We believe that our product suite (that has already been successful in the highly competitive and innovative Australian racing environment) can also be exported into international markets. In fact, this is already underway, with some of the world's leading bookmakers taking our racing solution to power their racing offering globally.
We will continue to leverage our existing domestic relationships with these operators, capitalise on our established distribution network and systematically introduce the extensive product roadmap that we have developed and are continuing to develop.
We are packaging and distributing products to Australian-based operators and international operators, matching their core data with our pricing solutions allowing them to expand their offering, aiming to ensure that their margins are maintained or increased, while allowing for resources to be kept as minimal as possible.
The core of our business is not only the technology platforms that aim to provide consistent and reliable delivery of data and information at speed, but also the accuracy and integrity of our information, which is compiled in partnership with the various racing bodies in Australia.
This is supported by a suite of products such as Price Manager, Futures Manager and The Global Tote, which have been developed in consultation with our key client base of wagering operators. These are products designed to make their businesses more efficient, profitable and scalable.
The BetMakers business has three key areas of focus with each having multiple revenue streams:
1. Data and Analytics Division (or BetMakers - DnA as we call it)
This the most established part of the business and is predominately recurring revenue via subscriptions from bookmakers and punters/traders
- DnA division has more than 20 bookmakers across Australia and UK for Data and Pricing solutions
- DnA division has more than 1,000 subscriptions for odds comparison by punters and traders
Our DnA division has been delivering strong results post The BetMakers' recent acquisitions of Dynamic Odds and Global Betting Services, with a number of our core clients upgrading and extending their agreements while we have also on-boarded some other key clients across Australia and the UK.
We now have more than 20 operators across Australia and UK that utilise The BetMakers' DnA products and more than 1,000 paying subscribers to our pricing solutions.
The BetMakers offering has the ability to cross jurisdictions and deliver a racing solution, which we view as being second to none for international racing.
Global wagering operators that are looking to expand their offering outside of their current domestic offering are excited by what the BetMakers DnA division can deliver.
2. Integrity and Distribution division
The Integrity and Distribution division is a more recent addition to the business that has been developed through the recent acquisitions and has seen strong growth already with the signing of several racing bodies from Australia and the US, with plans to expand into other markets throughout 2019
- Currently the Integrity division has more than 12 racing bodies that utilise The BetMakers services, including creating and distribution of the "Official Price"
The newest product that we would like to introduce you to is our Global Racing Solution where we package up the content from the racing bodies with our pricing solution and distribute this to our existing network of bookmakers from around the world.
The initial launch will include more than 2,000 races per month and is expected to go live in January 2019.
These events are packaged with fixed odds pricing, Global Tote pricing and will also include rolling jackpots across the races, which we expect will deliver the most engaging products available for international wagering.
3. The Global Tote:
The last revenue division is Global Tote, operated by The Global Tote Limited, the Company's wholly owned subsidiary, which is licensed in Alderney in the UK. The Global Tote is also licensed through the UK Gaming Commission to operate a tote throughout the UK, holds a licence in the US through the North Dakota Racing Commission, and is currently the only International Tote licensed in the United States.
- The Global Tote received positive news from NTRC in October, determining that its licensed bookmaker, NEDS, can utilise the Global Tote.
- The Global Tote is in the final testing phase for its integration to the UK Tote, which will allow UK Tote customers the ability to access the international pools of the Global Tote, expected from December 2018
- We expect to be increasing the events on The Global Tote in December and through the first quarter of 2019.
- The Company also expects to conduct betting on more than 6,000 races throughout the March quarter.
Both the Board and I are very happy with the recent developments and the re-focus of the business on wagering data and analytics.
In respect to the GBS and Dynamic Odds acquisitions we had previously outlined expectations of annualised revenues of $4.8Million and EBIT of $3Million. After two months of ownership, I am pleased to report that these acquisitions are on track to deliver to our expectations.
With the current opportunities, the Company expects to be profitable from a P&L perspective in the March Quarter 2019, and, assuming no material changes in market conditions is on target to generate more than $10M in revenues for FY20 with an EBIT of more than $4M for that year.
Current deals within The BetMakers DnA division will drive more than $6M in revenues.
It is expected the Integrity and Distribution deals to generate in excess of $2M through the current distribution agreements with racing bodies internationally.
The Company also expects The Global Tote to generate in excess of $2Mil in net revenues for the FY20 period
The Company would like to point out that 'Net revenues' from The Global Tote will be viewed as the margin remaining after all expenses including rebates, race field fees and taxes.
- The Company forecasts it will be profitable in March quarter FY19.
- The Company provides profit guidance for FY20 of $4.0M - $5.0M.
- The BetMakers group assumptions based on 10 months of integrated revenues from DynamicOdds and Global Betting Services.
- Current Services agreements.
- Costs synergies savings across the group.
- Cost rationalisation as a result of exiting the retail business.
- Revenue forecasts include - $4.8M generated by the two acquisitions producing EBIT of $3M.
- $400k in revenue generated by Global Tote assumptions for H2 FY19
o Increase from 2,000 to 4,000 races covered per month from January to June 19
o More than 4 bookmakers coming on board across Q3 and Q4
- $2.0M in revenue generated by Global Tote assumptions for FY20
o Over 30,000 races covered by Global Tote in FY20
o More than 5 bookmakers on board by July 19 and staying active for FY20
- $400k in revenue generated by Global Data Distribution assumptions for H2 FY19
o Up to 2,000 races per month through H2 FY19
o More than 4 bookmakers taking product in H2 FY19
- $2.0M in revenue generated by Global Data Distribution assumptions for FY20
o Over 30,000 races covered by Global Data Distribution in FY20
o More than 5 bookmakers on board by July 19 and staying active for FY20
About The Betmakers Holdings Limited
The Betmakers Holdings Limited (ASX:TBH), (OTCMKTS:TPBTF) (FRA:T07) formerly TopBetta Holdings Limited, is an ASX-listed holding company and a global provider of online wagering products and services to both wholesale and retail markets through its various wholly owned subsidiaries. The Company operates a retail wagering business, offering consumers wagering, fantasy tournament and content products and services. Global Tote Australia Pty Ltd conducts TBH's Wholesale Business, which includes operating and licensing its wholesale tote product which enables licensed wagering operators, including corporate bookmakers and tote operators from all over the world, to participate in global pools. The Wholesale Business is conducted under a B2B licence granted by the UK Gambling Commission to Global Tote Limited, a company incorporated in Alderney, UK.
The Betmakers Holdings Limited