Group performance up to expectations, claims management
Pool betting operator and technology supplier Sportech plc has posted its interim results for the six months ended , noting the following highlights:
* Total Group EBITDA of GBP 11.1 million, marginal improvement over H1-2015's GBP 11 million;
* EBITDA from continuing channels increased by 5 percent to GBP 11.1 million from GBP 10.6 million in the comparative period last year;
* Sportech Racing and Digital – previous investment in technologies and opening of Singapore office continues to deliver new international customers;
* Sportech Venues – construction of flagship Stamford venue has commenced; sports bar opened in San Diego, California;
* Football Pools – completed key modernisation milestones and demonstrating earnings stability;
* VAT claim – The Court of Appeal unanimously ruled in favour of the Group in the GBP 97 million Spot the Ball VAT refund case, and the outcome of HMRC's direct appeal to the Supreme Court is expected in Autumn 2016
* Discussions continue regarding a possible sale of the Football Pools
Financial highlights include:
* Adjusted profit before tax has grown by 4 percent to GBP 5.6 million;
* Reduction in statutory profit (GBP 2.7 million vs. GBP 7.9 million) before tax attributed largely to the GBP 8.1 million profit generated last year on the one off disposal of online gaming interests in New Jersey in 2015 to NYX;
* Following the receipt of the GBP 93.3 million VAT repayment from HMRC, the group holds net cash of GBP 36.2 million, improved from a net debt position of GBP 61.1 million at June 2015 – adjusted net debt has reduced by 6 percent from June 2015;
* On a constant currency basis, EBITDA from continuing channels increased by 1 percent (2015: GBP 11 million);
* Revenue declined by 3 percent at GBP 48.7 million (2015: GBP 50.1 million);
* Sportech Racing and Digital – recovered from loss of contracts in California and Germany, with redeployment of capital and new contract wins delivering margin growth and preserving EBITDA at GBP 4.3 million;
* Sportech Venues – online handle growth delivered overall earnings in line with prior year, largely offsetting the anticipated industry handle decline to deliver EBITDA of GBP 1.5 million;
* Football Pools – EBITDA from continuing core channels of GBP 7 million in line with prior year.
CEO Ian Penrose reported that the group mhas enjoyed a good first half and is trading in line with management's expectations.
"We have reached a key stage in our development, as our US business makes progress in both existing and new markets around the world, and our Football Pools business has reached expected stability after a number of years of modernisation.
"Overall, the Board is pleased with the strategic position that each of its divisions has secured, whilst recognising that each division will require further investment, ahead of anticipated revenue and profit benefits, to enable them to deliver their full potential."
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