SPO.L Share News (SPO)

LONDON (Alliance News) - Sportech PLC on Wednesday confirmed it has closed the formal sale process that it had started back in October, ending all discussions with potential bidders, and has appointed a new chief executive to take the betting firm forward as an independent company.

Sportech also said the first weeks of the current year have been "fairly challenging". However, it has secured new long-term contracts, thus "there is no reason currently to change its expectations for 2018," the company said.

Sportech said adjusted earnings before interest, tax, depreciation and amortisation for 2017 are anticipated to be below prior expectations at around GBP6.5 million. This is due to a series of accounting corrections including write-downs of old stocks and "doubtful" debtors.

Also, there are additional costs of around GBP8 million that are "highly material". This includes the departure of former board members and other senior management, restructuring costs, and provisions.

"The board and senior management invested considerable time in diligently managing the formal sale process. Whilst a sale of the company might have delivered an immediate further return to shareholders, in addition to the GBP75 million returned last year, I am confident that the company has the potential to deliver significant long-term value to shareholders, especially if the US sports betting market is liberalised and also from further diversification strategies," Non-Executive Chairman Richard McGuire said.

"We are focused on ensuring Sportech benefits fully from any changes in the US sports betting market and we anticipate announcing exciting new initiatives in due course," McGuire added.

In addition, the company has appointed Andrew Gaughan as chief executive officer with immediate effect. Gaughan joined Sportech in 2010 following the acquisition of Scientific Games Racing, and was appointed to the board in January 2017.

"I welcome Andrew Gaughan to the role of chief executive officer as part of a new leadership team to ensure we execute on our commitment to deliver tangible returns to shareholders," McGuire said.

Gaughan is based in Toronto, and Sportech said it looking for a chief financial officer, who also will be based in North America. In the meantime, Non-Executive Director Richard Cooper will continue to oversee the company's finances.

Sportech shares were down more than half at 34.00 pence on Wednesday following the annoucement.