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Betbrokers

• BY: Andrew Hore |
• POSTED: 13/03/2008 |
• COMMENTS: Add yours

Betbrokers has raised £495,000 through a five-year loan note with an annual interest charge of 10%.

The sports betting broker and clearing house also raised £58,000 from a placing at 1p a share – compared with a market price of 1.75p (bid/offer spread is 1.5p-2p). Betbrokers recently changed its broker and nominated adviser from Hanson Westhouse to Daniel Stewart.

The cash will provide working capital for the business. The loan notes are repayable in 2013 and will cost £9,500 a year in interest.

The company is expected to report a loss of £2.6m in 2007 and it had around £800,000 of cash at the end of the year. It is forecast to move into profit this year but the cash outflow will continue and all the cash is likely to be used up. In 2009, Betbrokers is forecast to generate cash and double profits to £1.2m.

The additional interest charge dilutes earnings per share. Even so, the shares are trading on 10 times 2008 forecast earnings, falling to five times for 2009.

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