Fundraising firm has revealed that ‘subsidiary is not perceived as core’ to its future operations after chalking up initial losses of almost £267,000.
Tuesday 21st June 2011
Fundraising firm The Weather Lottery has released a trading update revealing that it intends not to concentrate on its FCBetz.com online gambling brand in the future while terminating the sponsorship contracts it signed with several football league clubs.
The Weather Lottery raises funds for non-profit organisations such as sports clubs, schools and universities with the previous 18 months having seen it sign sponsorship deals for the FCBetz.com domain with leading British soccer teams including Sheffield Wednesday, Derby County and Coventry City.
However, the Doncaster-based firm stated that it ‘became apparent that FCBetz.com did not have full access to all the clubs’ databases’ after an initial increase of in-stadia advertising, which it declared had severely restricted the ability of the brand to ‘build its database of active members’. It announced that sponsorship costs for the online gambling domain had grown to approximately £177,000 in addition to operating losses of almost £90,000 with its current database of over 3,000 active members ‘not considered likely to grow significantly in the near term’.
“Negotiations are in progress to terminate the relevant contracts, which it is anticipated should be completed before the company's year-end,” read a statement from The Weather Lottery.
“The directors believe that these negotiations should result in sponsorship costs in the second half being considerably reduced and possibly eliminated although this might necessitate the institution of legal proceedings.
“However, given the competitive online betting marketplace, the future of FCBetz.com subsidiary is not perceived as core to the group’s operations. No value has been attributed to the current database in the group balance sheet.
“The board believes that the measures underway in relation to the FCBetz.com subsidiary and the improved performance from the core lottery division and the online poker and gambling sites, when taken with the acquisition of Soccerdome with its cross marketing opportunities to the lottery, provide The Weather Lottery with a sound basis for a return to profitability. With minimal bank debt, The Weather Lottery is well positioned to seek further complimentary acquisitions to improve shareholder value.”
The Weather Lottery also declared that it had made an application to the London Stock Exchange to submit 78 million new ordinary shares for trading from today on its Alternative Investment Market (AIM).