SPORTECH PRE-CLOSE TRADING UPDATE

Posted 1/23/11: Group's 2010 EBITDA expected to be GBP 19.7 million
 
Tote gaming and pool supplier, Sportech PLC announced its pre-close trading statement to the year ended 31 December 2010.
 
Financial Summary:
 
–     Trading across the Football Gaming, Sportech Racing and e-Gaming divisions in the second half of 2010 performed as anticipated, and the Group expects to report adjusted pre-tax profits for the year in line with market expectations.
 
–     The Group's Earnings Before Interest and Taxes is expected to be GBP 19.7 million for 2010.
 
–     The Group continues to generate strong trading cash flows enabling a near 10 percent reduction in net bank debt during the year to approximately GBP 72.3 million at the year end, which is better than market forecasts.
 
 
Operational Highlights Include:
 
–     The integration of Scientific Games Racing ("SGR"), now renamed Sportech Racing, is at an advanced stage.  The company reports that it is approaching the end of the extraction of Sportech Racing from Scientific Games Corporation, which has included new physical locations for staff, the adoption of standard financial reporting systems and alignment of the senior management teams across the enlarged Sportech Group. Since completion we have also extended our direct to customer operations, opening two additional Off Track Betting ("OTB") locations in Connecticut, as well as a new partnership location in California.
 
–     New agreement for Sportech Racing to provide pari-mutuel wagering systems, terminals, interactive wagering platforms and services at the Hipodromo Chile and Club Hipico de Santiago. The agreement includes racetracks, phone betting, Teletracks centres and 201 OTB locations. Delivery is expected in the latter part of 2011.
 
–     The Group's investment to modernise its Football Pools business, including an increased product range and enhanced technological capabilities, has enabled its launch on Ladbrokes.com. The Group expects to announce further distribution deals during 2011.
 
–     2010 has been a year of transition for the groups e-Gaming division as it has embarked on the migration of its bingo offering and subsequently casino and poker activities to Playtech by Q4 2011.
 
–     The Group's joint venture in India with PlayWin, the Indian lottery and gaming business, continues to gain momentum, with the Group monitoring opportunities regarding the regulatory position in India with keen interest.
 
–     The Group continues to pursue HM Revenues & Custom (HMRC) for a claim of GBP 40 million for the repayment of VAT overpaid in respect of the "Spot the Ball" game from 1979 to 1996. Interest may also be added, which if applicable, would see the principal sum doubled. The claim has recently been rejected by HMRC. The Company has lodged an appeal to the independent First Tier Tax Tribunal.
 
Ian Penrose, Chief Executive of Sportech PLC said: "2010 has been a transformational year for Sportech. We completed a major acquisition of Scientific Games Racing, positioning Sportech as one of the world's leading suppliers and operators of pools and tote gaming. We have also continued to modernise our existing operations. In a tough trading environment the Group continued to generate strong cash flows enabling material debt reduction."