Thursday August 21,2014 : SPORTECH ON TRACK IN H1-2014
US operations buoy otherwise mediocre interim results for the six months ended 30 June 2014.
Operator and supplier of pools and tote betting services, Sportech plc, has posted its interim results for the six months ended 30 June 2014, highlighting the success and growing momentum of its activities in the United States.
The report claims:
* Good strategic progress in securing new contracts and acquisitions
* Progress made in rolling out strategy across the group venue estate, online, mobile and i-gaming
* Group now generates 64 percent of its revenues from US-based business interests
* Football Pools performing in line with operational targets
* Revenue up 1.7 percent to GBP 52.6 million on a constant currency basis
* EBITDA of GBP 12 million, in line with prior year:
* Sportech Racing and Digital up GBP 600,000 to GBP 3.7 million
* Sportech Venues down GBP 600,000 to GBP 2 million
* Football Pools in line with prior year at GBP 8.2 million
* Exceptional pre-tax gain of GBP 87.1 million following receipt of GBP 93 million from Her Majesty's Revenue and Customs, but an HMRC appeal in respect oif this amount pending.
* Net cash of GBP 26.3 million, and adjusted net debt of GBP 66.7 million – up GBP 3.3 million.
Strategic and operational highlights included:
Sportech Racing and Digital
* Agreement with BetFred to provide new systems and digital technology to Totepool (UK Tote) signed in July
* Entered the US online gaming market through agreement with Atlantic City-based Resorts Casino Hotel to supply online gaming services through an NYX joint venture
* Acquired Bump Worldwide, a provider of electronic charity raffles, to extend customer base into professional sports teams
* Trading impacted due to extreme winter weather conditions, loss of VIP revenues, new development start-up costs and increased pressure on operating margins
* Estate development continues, with the opening of a sports bar, restaurant and betting venue in Bradley, Connecticut; the launch of Connecticut's only legal online betting site; and th award of regulatory approval to open a pipeline of three similar venues over the next year in Stamford, Connecticut and in San Diego and Norco in California
* Acquired record new customers to the subscription business
* Increased spend per customer has offset the anticipated customer number decline, primarily in Collector Channel
* Developing new online site which will go-live in H2-2014 and is expected to drive customer acquisition
CEO Ian Penrose, said Thursday:
"We are pleased with the progress we have made in the first half, and in particular with the strategic momentum we have continued to build in our US business. We are expanding our retail betting estate, developing an online betting offer on horseracing and rolling out iGaming products as regulation allows.
"This series of initiatives complements our existing Racing and Digital business that currently processes $13 billion of bets annually, and following significant investment in new technology and products over the last couple of years, the division has secured new contracts, most notably to replace the entire betting system for the UK Tote.
"It is disappointing that the extreme US winter weather together with margin pressures in Connecticut have taken the shine off our financial performance. Like all companies with interests in the US, the reported results have been negatively impacted by the strength of Sterling. On a constant currency basis the Group remains in line to meet its expectations, although at current exchange rates the reported result will be adversely impacted for the full year."