Betbull plc ('Betbull') announces the release of group consolidated unaudited financial statements for the half year to 30 June 2008

1. Financial highlights for the period

Betting stakes of EUR 50.9m for the half year up 28% compared to EUR 39.9m in HYI 2007.
Net gaming revenue of EUR 8.4m for the half year up by 25% compared to EUR 6.7m in HYI 2007.
EBITDA (including the joint venture in Madrid) of EUR 0.8m for the half year up EUR 0.5m compared to EUR 0.3m in HY1 2007.
Cash position as at 30 June 2008 (including the joint venture in Madrid) of EUR 9.5m compared to EUR 8.8m as at 30 June 2007.
EBITDA excluding the joint venture in Madrid of EUR 1.3m for the half year and cash position as at 30 June 2008 also excluding the joint venture in Madrid of EUR 7.4m.

2. Business highlights for the period

Germany

Betbull has again achieved growth in turnover and profits from its core activities in Germany. Betting stakes were up 28% on the same period last year and 30% up on the previous quarter. Gross hold rose by 30% against the same period last year and 18% against the previous quarter.

These gains have been realised despite a still unclear legislative position and therefore difficult trading environment, giving testament to the strong product offer and management skills Betbull employs.

Management remains optimistic about the long term value and potential of retail betting in Germany and continues a policy of cautious expansion, whilst maintaining a strong presence ready to take advantage of any favourable legislative changes in the future.

Spain

The joint venture company BBE (Betbull Bwin Espana) is now fully established, with offices in Madrid’s Grand Via and employing 11 central office staff and management. The process of technology homologation has been successfully completed and all other required documentation including the provision of a EUR 12m bank guarantee to the Community of Madrid, has been submitted to relevant authorities. It is therefore expected that final approval and delivery of the licence will take place in September, when government offices return to work after summer recess.

BBE has identified a number of key locations for its first shops and will close property deals on those locations as soon as the licence is awarded. BBE has a well defined and focused strategy for roll out of retail units throughout the Province and it is hoped that the first bets will be accepted before the end of the year.

Other autonomous communities within Spain have indicated that they will follow Madrid in awarding betting licences and Betbull intends to pursue development in those regions as soon as the legislation is announced.

Spain continues to be the main focus of development for the company and will offer a clear and stable licensed environment in which Betbull can apply already proven retail techniques.

Italy

Betbull took the decision to sell its 4 licences, which were awarded under a tender process in 2007, sale proceeds amounted to EUR 0.6m delivering a small profit after costs. The decision to sell was taken primarily as a result of the company’s policy to focus on core areas, but also because opportunities for future development would have been restricted due to legislative and operational barriers. At the time of purchase of the Italian licences, the company expressed its intention to cautiously monitor the opportunities available before committing to a full development program.

Online

Planned upgrades to the online platform are in progress, although the company does not intend to widely market it online offer outside of the retail units from which it trades. The online platform provides a valuable complimentary offer to retail clients and absorbs very little in resources.

Other

In areas other than Spain and Germany, Betbull’s policy is to provide a betting and bookmaking service to agents as opportunity and legislation permits. This strategy allows the company to acquire additional turnover and share revenues with agents whilst not absorbing the associated capital cost of opening shops and acquiring licences, more importantly not diverting the focus of development away from the core projects of Spain and Germany. Betbull would evaluate each opportunity on its merits as and when it might occur, however this is seen as a minor part of the company’s activities.

Commenting on today’s press release, Simon Bold director of Betbull plc said:

'I am pleased to announce a positive net result for the half year, with earnings before tax amounting to EUR 0.5m, a turnaround on the same period last year of EUR 0.7m, in view of the investment Betbull has made in the Madrid JV with bwin, this is a pleasing result and demonstrates that we are operating a policy of strong financial control.

Betbull is continuing to cautiously fulfil its targets in a solid and steady manner, maintaining position as a leading player in Germany at the same time maximising revenues from those operations. We are investing in the most exciting, fully licensed retail opportunity in central Europe, together with our partner bwin, we are building a valuable company, poised to become a leading brand in Spanish retail betting.

We have managed our funds wisely, maintaining a healthy overall cash position of EUR 9.5m at the end of HY1. We will continue to review costs and strive for greater efficiency as the company grows, ensuring that we build a solid foundation which will support long term development.'

Betbull plc

Consolidated Profit and Loss account

For the half year ended 30 June 2008 2008
(6 months)
EUR 2007
(6 months)
EUR

Betting stakes 50,927,656 39,935,746
Customer winnings (40,883,812) (32,264,528)
Gross hold 10,043,844 7,671,218
Other gaming income 504,069 547,857
Commissions to third party agents and bonuses (2,159,331) (1,531,584)
Net gaming revenue 8,388,582 6,687,491
Other operating income 262,330 -
Total income 8,650,912 6,687,491
Direct costs and betting taxes (1,474,134) (1,216,482)
Gross profit 7,176,778 5,471,009
Personnel costs (3,019,983) (2,833,347)
Cost of premises (1,968,306) (1,296,114)
Mobility and distribution costs (480,008) (442,650)
Other operating costs (766,080) (662,748)
Valuation adjustments 7,328 106,202
EBITDA and before share benefit charge 949,729 342,352
Share benefit charge (97,630) (31,000)
EBITDA 852,099 311,352
Depreciation (433,051) (582.873)
EBIT 419,048 (271,521)
Financial result 47,666 59,693
Profit before tax 466,714 (211,828)
Taxation (438,053) (348,963)
Profit/(loss) after tax for the half year 28,661 (560,791)
Attributable to
- Equity holders of the parent 300,698 (560,791)
- Minority interest (272,037) -
28,661 (560,791)

Certain figures have been restated to conform with the current more detailed presentation. Due to the new presentation the following line items have been added or restated:

1. Betting stakes.
2. Customer winnings.
3. Other gaming revenue which include income from slot machines, betting fees income, and rentals fees.
4. Commissions to third party agents and bonuses.
5. Personnel costs.
6. Cost of premises which include rental of premises, maintenance and running costs.
7. Mobility and distribution costs which include travel costs, printing postage and stationery costs, motor vehicle running costs and communication costs.
8. Other operating costs which include insurance costs, legal and professional costs, accountancy and audit costs and bank charges.
9. Valuation adjustments which include differences on exchange and differences in valuation of investments.
10. EBITDA is now shown before share benefit charge and after share benefit charge.
11. EBIT.

The above changes are merely changes in presentation. The annual accounts format has not been changed.

Betbull plc

Consolidated balance sheet
As at 30 June 2008

                                                   2008           2007 
                                                    EUR            EUR 

Goodwill, intangible assets and investments     18,908,195     18,462,700 
Fixed assets                                     2,133,554      2,783,742 
Non-current assets                                 195,878        206,133 
Current assets                                   4,551,128      4,794,878 
Cash and cash equivalents                        9,524,887      8,841,503 
Total assets                                    35,313,642     35,088,956 
Equity                                          34,356,519     34,299,994 
Losses                                        (11,406,073)   (10,325,617) 
Reserves                                         5,498,605      5,044,278 
Current liabilities                              5,913,756      5,368,390 
Minority interest                                (299,165)              - 
Long tern liabilities                            1,250,000        701,911 
Total equity and liabilities                    35,313,642     35,088,956