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Press Release

Interim Results

01 February 2007

INTERIM RESULTS FOR THE 26 WEEKS ENDED 26 NOVEMBER 2006

betinternet.com plc, the global on-line gaming group, today announces its interim results for the 26 weeks ended 26 November 2006.

Highlights of the results are:

Group turnover has increased by 53% to £43.6m (2005: £28.5m)
European Wagering Services (EWS) pari-mutuel business has continued to grow with turnover increasing by 247%
EBItdA profit of £182k (2005: loss of £599k)
Sportsbook turnover has increased by 27% to £31.8m (2005: £25.1m)
Sportsbook margin has increased by 19% to 2.5% (2005: 2.1%)
Group overheads have reduced by 17% to £1.39m (2005: £1.67m)

Commenting on the results, Denham Eke, chairman ofbetinternet, said:

“These results show that the business has moved to profitability at EBItdA level, with a particularly strong performance from European Wagering Services (“EWS”), the group’s pari-mutuel operation, and growing revenues from the sportsbook business. This is a significant improvement on the same period last year and shows that the strategies put in place by the new management team are working well.”

ENDS

For further information: betinternet.com plc	Tel: 01624 698141
Garry Knowle, Managing Director
EvolutionSecurities	Tel: 0113 243 1619
Joanne Lake

Britton Financial PR	Tel: 0207 251 2544
Tim Blackstone

Notes to editors:

The following are attached:

Chairman’s statement
Consolidated Profit & Loss Accounts
Consolidated Balance Sheets
Consolidated Cash Flow Statements
Notes to the Accounts

N.B. Pari-mutuel (or “tote” wagering) refers to wagering into a ‘pool’ where dividends are paid to winners and the operator retains a percentage of the ‘pool’.

Chairman’s Statement

Introduction

The first half of the Company’s financial year, which ended on 26^th November 2006, has seen the business move to profitability at EBItdA level, with a particularly strong performance from European Wagering Services (“EWS”), the group’s pari-mutuel operation, and growing revenues from the sportsbook business.

This is a significant improvement on the same period last year and shows that the strategies put in place by the new management team are working well.

Unlike many internet gaming companies, betinternet.com has little exposure to the US and the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 has had no impact on our revenues. As a result, the board believes betinternet.com to be uniquely placed to actively pursue opportunities to acquire non-US business from those companies adversely affected by this legislation. We believe that we are well positioned to take full advantage of such opportunities.

Overview of Results

During the period under review, group turnover was £43.6m (2005: £28.5m) and gross profit was £1.52m (2005: £1.07m).

EWS has performed particularly well, with turnover for the 26 week period at £11.8m (2005:£3.4m). The operation has a good balance of income from its website, link2bet.com, as well as through its telephone call centre.

Revenues from the sportsbook business have also improved, with the introduction of additional income streams from 24 fixed odds games and download and instant casino games being added during the period. As a result, the sportsbook has moved further towards our stated aim of providing a one-stop gaming and entertainment portal. The gross margin from the games and casino channels continues to outstrip that made from sports betting where increased competition in the Far East has a continued impact. However, the directors understand that it is betting on sports events that drives customers to the portal and for this reason it is the board’s intention to continue to add a variety of new content to this portal.

Overheads have been reduced by 17% to £1.39m (2005: £1.67m) for the period. This reduction has been achieved by better controls and by increasing the use of technology to replace manual processes throughout the whole business. It is expected that this process will continue into the second half of the year.

Board and executive changes

In September 2006, we appointed Damon Waddington as Finance Director. Damon joined the Company as Financial Controller in February 2006.

We have also recently announced the appointment of Ed Comins to the position of chief operating officer of EWS with effect from 6^th February 2007. Ed has considerable commercial experience within the gaming sector, having previously been the business development director of Totepool, the UK Tote’s horseracing pool betting brand.

Future Prospects

EWS’ growth has been achieved by offering the excellent levels of service, connectivity and technical solutions that our customers require. We have created bespoke wagering solutions for individual customers as well as for other gaming businesses and anticipate that this is an area that will continue to be in demand. We plan to enhance the link2bet.com website to improve navigation and make placing wagers more efficient.

We believe that Ed Comins’ industry-experience will enable him to assist considerably with the continued growth of our pari-mutuel business. There remain many opportunities in this market, especially given the restrictions to fixed-odds wagering brought about by the UIGEA. In addition, the US Thoroughbred Protective Bureau has published its report on our business. We have now sent this report to many of the racetracks in the US as a reference tool and as a result of this, are optimistic that we will be able to gain access to additional content for our customers.

Enhancements to the sportsbook portal are ongoing, with additional gaming content and improved customer functionality being worked on constantly. We also continue to look at additional payment solutions specific to the regions in which we operate. Having a dedicated development and design team is a considerable advantage to us in making these enhancements to our website in a timely manner.

Approximately two-thirds of our sportsbook’s customers are resident in the Far East where the market continues to grow as payment solutions improve and internet connectivity increases. European football, especially the English Premiership, remains the preferred wagering product for these customers, where live pictures are readily available by satellite and now increasingly, through internet streaming.

The board expects that the Company will start to see revenue from the provision of a white-label sportsbook service to third parties in the current financial year. We expect to launch our first white-label website shortly and are keen to attract other companies to take up this service.

The directors are confident that betinternet.com can build on the substantial improvements made over the last six months and that both our pari-mutuel and sportsbook businesses are now well positioned for further growth.

Denham Eke

Chairman

Consolidated Profit and Loss Account

for the 26 weeks ending 26 November 2006

	Note	Unaudited 26 weeks to 26 November 2006 £000	Unaudited 26 weeks to 27 November 2005 £000	Audited 52 weeks to 28 May 2006 £000
Turnover
betting stakes received
Sportsbook		31,791	25,092	57,496
Pari-mutuel		11,812	3,407	10,073
		----------	----------	----------
Total group turnover	1	43,603	28,499	67,569
Cost of sales
Winnings paid and bets laid off	1	(42,084)	(27,411)	(65,246)
Net betting duty paid	1	(1) ----------	(15) ----------	(58) ----------
Gross profit	1	1,518	1,073	2,265
Administration expenses Other operating income	2	(1,386) 50 ----------	(1,672) - ----------	(3,320) - ----------
Earnings before interest,tax,depreciation and amortisation Depreciation		182 (89)	(599) (146)	(1,055) (268)
Share based costs		(16)	-	-
Amortisation of goodwill		(43) ----------	(250) ----------	(498) ----------

Total operating profit / (loss)		34	(995)	(1,821)
Interest		16 ----------	2 ----------	(83) ----------
Profit / (loss) on ordinary activities before and after taxation and retained profit / (loss) for the year		50 ----------	(993) ----------	(1,904) ----------

Basic profit / (loss) per share (pence)	4	0.02	(0.66)	(1.18)
Diluted profit / (loss) per share (pence)	4	0.02	(0.66)	(1.18)

Consolidated Balance Sheet

for the 26 weeks ending 26 November 2006

	Note	Unaudited 26 November 2006 £000	Unaudited 27 November 2005 £000	Audited 28 May 2006 £000
Fixed assets
Intangible assets		-	291	43
Tangible assets		269	400	224
Investments		271 ----------	145 ----------	271 ----------
		540 ----------	836 ----------	538 ----------
Current assets
Debtors		688	443	549
Cash at bank and in hand	6	409 ----------	849 ----------	458 ----------
		1,097	1,292	1,007
Creditors
Amounts falling due within one year		(1,516) ----------	(2,864) ----------	(1,490) ----------
Net current liabilities		(419) ----------	(1,572) ----------	(483) ----------
Total assets less current liabilities		121	(736)	55
Creditors
Amounts falling due after more than one year		-	(99)	-
		----------	----------	----------
Net assets / (liabilities)		121 ----------	(835) ----------	55 ----------
Capital and reserves
Called up share capital		1,969	1,505	1,969
Share premium		9,550	8,213	9,550
Profit and loss account		(11,398) ----------	(10,553) ----------	(11,464) ----------
Equity shareholders’ funds		121 ----------	(835) ----------	55 ----------

Consolidated Cash Flow Statement

for the 26 weeks ending 26 November 2006

	Note	Unaudited 26 weeks to 26 November 2006 £000	Unaudited 26 weeks to 27 November 2005 £000	Audited 52 weeks to 28 May 2006 £000
Net cash inflow / (outflow) from operating activities	5	38	93	(1,467)
Returns on investments and servicing of finance		16	2	(83)
Acquisition of tangible fixed assets		(134)	(195)	(141)
Acquisition of investments		-	(63)	(188)
		----------	----------	----------
Cash outflow before use of liquid resources and financing		(80) ----------	(163) ----------	(1,879) ---------
Financing
Issue of convertible loan		-	36	-
Share issue		- ----------	- ----------	1,738 ----------
Decrease in cash during the period	6	(80)	(127)	(141)
		----------	----------	----------
Reconciliation of net cash flow to movement in net funds		26 November 2006 £000	27 November 2005 £000	28 May 2006 £000
Operating net funds		338	479	479
Decrease in cash during the period		(80)	(127)	(141)
		----------	----------	---------
Closing net funds	6	258 ----------	352 ----------	338 ----------

Notes to the Accounts

for the 26 weeks ending 26 November 2006

1	Segmental Analysis
	26 weeks to 26 November 2006	Sportsbook £000	Pari-mutuel £000	Total £000
	Betting stakes received	31,791	11,812	43,603
	Winnings paid and bets laid off Net Betting duty paid	(31,021) 10	(11,063) (11)	(42,084) (1)
		----------	----------	----------
	Gross profit	780 ----------	738 ----------	1,518 ----------
	Margin	2.5%	6.2%	3.5%
	26 weeks to 27 November 2005	Sportsbook £000	Pari-Mutuel £000	Total £000
	Betting stakes received	25,092	3,407	28,499
	Winning paid and bets laid off	(24,546)	(2,865)	(27,411)
	Betting duty paid	(14)	(1)	(15)
		----------	----------	----------
	Gross profit	532 ----------	541 ----------	1,073 ----------
	Margin	2.1%	15.9%	3.8%
2	Other operating income Other operating income has arisen on the disposal of a 25% interest in Isle of Man Tote Limited, a pari-mutuel operation and consists of a dividend of £25k prior to the sale and £25k on the disposal of shares.
3	Taxation No provision for taxation is required as the company is subject to a 0% Isle of Man income tax charge on its gaming activities.
4	Profit per share The basic and diluted earnings per share calculation is based on the profit for the period after taxation of £50,157 (2005 loss of £992,529) and the weighted average number of shares in issue throughout the period of 196,944,179 (2005: 150,461,402) ordinary 1p shares and fully diluted average number of shares of 200,866,238 (2005 : 150,461,402) ordinary 1p shares.
5	Reconciliation of operating profit to net cash inflow / (outflow) from operating activities	Unaudited 26 weeks to 26 November 2006 £000	Unaudited 26 weeks to 27 November 2005 £000	Audited 52 weeks to 28 May 2006 £000
	Operating profit / (loss)	34	(995)	(1,821)
	Share based costs Depreciation and amortisation charges Increase in debtors (Decrease) / increase in creditors	16 132 (139) (5) ----------	- 396 (236) 928 ----------	- 766 (342) (70) ----------
	Net cash inflow from operating activities	38 ----------	93 ----------	(1,467) ----------
6	Analysis of net funds	Audited At 28 May 2006 £000	Cash Flow £000	Unaudited At 26 November 2006 £000
	Cash in hand and at bank	458	(49)	409
	Bank overdraft	(120) ----------	(31) ----------	(151) ----------
		338 ----------	(80) ----------	258 ----------
7	Basis of preparation of the financial statements The results for the period ended 26 November 2006 are prepared in accordance with applicable accounting standards, using the same accounting policies as set out in the group accounts for the year ended 28 May 2006 with the exception of FRS 20 – share based payments, which has been adopted in the period under review. The fair value of share options granted is recognised as an employee expense with corresponding increase in equity. Fair value has been determined using the Black Scholes model. There is no charge to the prior year. The interim statements are unaudited, but have been reviewed in accordance with Auditing Practices Board guidance by the Auditors, KPMG Audit LLC. The directors have considered the adequacy of the cash resources and working capital available to the group for the next twelve months and are satisfied that the group has adequate resources to meet its obligations as they fall due. On this basis the directors have concluded that it is appropriate to prepare the financial statements on a going concern basis.
8	Other information
(i)	The comparatives for the 52 weeks ended 28 May 2006 are not the Company’s statutory accounts for that financial period. Those accounts have been reported on by the Company’s auditors and delivered to the Companies Registry. The report of the auditors was unqualified.
(ii)	All profits derive from continuing activities.
(iii)	The interim statement was approved by the board on 1^st February 2007.
(iv)	The interim report is expected to be posted to shareholders on 16 February 2007 and will be available from that date, free of charge, for one month at the Company’s Registered Office; Viking House, Nelson Street, Douglas, Isle of Man IM1 2AH.
(v)	The Company’s nominated advisor and broker is Evolution Securities, Kings House, 1 King Street, Leeds LS1 2HH

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