Thursday August 22,2013 : SPORTECH POSTS H1-2013 RESULTS
Continued momentum in the United States, but weak performance in e-gaming
Sportech plc has posted its H1-2013 result to end June 2013, reporting progress on strategic goals and continued momentum in its United States endeavours, but e-gaming losses despite increased market spend.
Financial highlights of the report include:
* Revenue broadly stable at GBP 57 million (H1-2012: GBP 57.7 million)
* EBITDA down at GBP 11.8 million (H1-2012: GBP 12.6 million)
* Sportech Racing up 22 percent
* Football Pools down 6 percent
* e-Gaming losses despite an increase in marketing spend
* Adjusted profit before tax down at GBP 5.9 million (H1-2012: GBP 7.4 million)
* Profit before tax down at GBP 1.9 million (H1-2012: GBP 3.2 million)
* Net bank debt of GBP 56.7 million
* VAT claim now anticipated at approximately GBP 95 million
Strategic and operational highlights:
* Sportech Racing – continued momentum across the business
* New tote betting contracts signed with major gaming businesses in the USA, Denmark and UK
* eBet Online acquisition performing well, with integration on track. Full range of e-Gaming products from a single wallet soon to be available
* Launched exclusive online horserace betting platform for Connecticut customers
* VAT – First-tier Tax Tribunal found in favour of Sportech – HMRC given leave to appeal, with the next hearing at Upper Tribunal to be held on 29 and 30 April 2014. Sportech's VAT claim increased from previous estimates and now anticipated at approximately GBP 95 million.
CEO Ian Penrose reported that the company continues to make strategic and operational progress and build its "unique" market position.
"The United States is a strategically important market for Sportech and I am delighted that our efforts have led to a 22 percent growth in EBITDA in our Sportech Racing business, which now accounts for over 40 percent of Sportech's operational EBITDA," Penrose said.
"With several significant new contracts in place, new products coming into the market soon, a flagship betting and sports bar opening later this year in Connecticut and full launch of Connecticut's only legal online horseracing betting platform by the year end, we are pleased with the momentum in our US business for 2014 and beyond.
"The strong performance of this business and its importance to the Group's future success has helped mitigate the challenges faced in e-Gaming during the period.
"We were delighted when, in March 2013, our VAT rebate claim anticipated at approximately GBP 95 million was determined in our favour by the First-tier Tax Tribunal, although HMRC was subsequently given leave to appeal to the Upper Tribunal. Whilst this is proving a lengthy process, with the claim first lodged in March 2009, we are pleased with our success to date and look forward to the appeal hearing in April 2014."