|London-based independent brokerage and clearing house Betbrokers has stated that the value of bets it can take has been severely restricted by a lack of available funds despite ‘significant demand’ for its products and services in the UK.|
Betbrokers was Great Britain's first retail and wholesale brokerage and clearing house for the sportsbetting industry and the revelation came in the form of a trading update issued to London’s Alternative Investment Market (AIM) earlier this week.
“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,” read the announcement.
“Whilst revenues are expected to be lower, the company remains confident that it will be profitable and cash-flow generative for the full year to December 31, 2008.”
Betbrokers raised over $969,000 in March by issuing ten percent secured loan notes due in 2013 and stated that these funds had made a significant difference to trading.
“However, the size and profile of recent trading activity has shown these funds to be insufficient to enable the company's performance to meet the market's expectations,” read the statement.
The firm revealed that the average size of deals last month was $831 compared with $2,684 for the same period in 2007. It stated that this was due to it turning down a majority of bets due to a lack of available funds in its clearing house. However, the number of transactions for May rose to 5,352 compared with 3,967 for the same period last year but trading volumes stood at $4,448,000 compared with $8,753,000.
“The lack of funding in the clearing house and our inability to transact several large bets has resulted in a decrease in the average deal size,” said Wayne Lochner, Chief Executive Officer and Chairman for Betbrokers.