Board reports good progress and trading in line with management's expectations
UK pool betting specialist Sportech plc has posted a trading update, noting that the company continues to make good progress, with trading in line with management expectations.
Giving a strategic update, management reported:
"On Tuesday , we announced that we had terminated discussions with Burlywood Capital for the GBP 97.25 million sale of The Football Pools. Burlywood were unable to complete the financing to conclude the terms of their proposals.
"In relation to the Group's GBP 97 million VAT reclaim, we are waiting to hear whether the Supreme Court will hear HMRC's appeal following the unanimous judgment at the Court of Appeal of three judges in favour of Sportech in May 2016. We are advised that this decision should be expected shortly.
"The Group has continued to make good operational progress since our interim statement on and financial performance is in line with our expectations."
The update goes on to reveal that the group's "non-earning" equity and property assets are being studied with a view to realising value.
Referencing The Football Pools subsidiary, the update advises:
"The Football Pools continues to trade in line with management expectations, and is demonstrating the move to stability that we have been striving for in 2016. Core revenues remain broadly in line with prior year, driven by an increase in spend per head, whilst both revenues and player numbers continue to grow in the digital channel."
The update also reports on Sportech's Racing and Digital interests, commenting:
"The important strategic diversification of our gaming technology division ("Racing and Digital") into Europe and Asia continued with the successful implementation of our betting systems into the Macau Jockey Club in September. Bump 50:50, which extends our wagering activities to include the provision of electronic lottery/raffle systems to professional sports teams in North America, continued its strong growth. It deployed systems with market leading brands including the Dallas Cowboys, San Francisco 49ers, LA Clippers, amongst others and has an encouraging pipeline of potential sales."
The company's venues division reports that construction has commenced on a flagship 20,000 sq ft betting venue, sports bar and restaurant in Stamford, USA. Construction is expected to be completed within budget and the venue is scheduled to open in April 2017.
"This venue, the only one in the city, is adjacent to the New York border and will be a valuable addition to our exclusive, in-perpetuity licence to operate all retail and digital wagering operations in the state of Connecticut," management observes.
The Group has net cash of GBP 37 million at , an increase of GBP 800,000 since . Excluding the cash received from HMRC in respect of the VAT decision and customer cash balances, the Group had net debt of GBP 60 million at .
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