24 Jan 2011 07:00
Sportech PLC ("Sportech" or "the Group")
Pre-close Trading Update
Sportech PLC, one of the world's leading operators and suppliers of pools and tote gaming, today announces a pre-close trading statement ahead of its Preliminary Results for the year ended 31 December 2010, which will be announced on 24 March 2011.
Financial Summary
Trading across the Football Gaming, Sportech Racing and e-Gaming divisions in the second half of 2010 performed as anticipated, and the Group expects to report adjusted pre-tax profits* for the year in line with market expectations. The Group's EBITDA** is expected to be in the region of £19.7 million for the year.
The Group continues to generate strong trading cash flows enabling a near 10 per cent reduction in net bank debt during the year to approximately £72.3 million at the year end, which is better than market forecasts.
Operational Highlights
Good progress has been made across the business. Importantly, the integration of Scientific Games Racing ("SGR"), now renamed Sportech Racing, is at an advanced stage. We are approaching the end of the extraction of Sportech Racing from Scientific Games Corporation, which has included new physical locations for staff, the adoption of standard financial reporting systems and alignment of the senior management teams across the enlarged Sportech Group. Since completion we have also extended our direct to customer operations, opening two additional Off Track Betting ("OTB") locations in Connecticut, as well as a new partnership location in California.
Sportech Racing has also extended its B2B distribution with a new agreement signed in Chile for the provision of pari-mutuel wagering systems, terminals, interactive wagering platforms and services at the Hipodromo Chile and Club Hipico de Santiago. The agreement spans racetracks, phone betting, Teletracks centres and 201 OTB locations. Delivery is expected in the latter part of 2011.
The Group's investment to modernise its Football Pools business, including an increased product range and enhanced technological capabilities, have enabled our launch on Ladbrokes.com, the website of one of the UK's leading betting companies. The Group expects to announce further distribution deals during 2011.
2010 has been a year of transition for our e-Gaming as we have been planning for, and embarking upon, a migration of our bingo, and subsequently casino and poker activities to Playtech, a major shareholder and commercial partner, by Q4 2011.
The Group's joint venture in India with PlayWin, the leading Indian lottery and gaming business, continues to gain momentum, with the Group monitoring opportunities regarding the regulatory position in India with keen interest.
The Group continues to pursue HM Revenues & Custom (HMRC) for a claim of £40 million for the repayment of VAT overpaid in respect of the "Spot the Ball" game from 1979 to 1996. Interest may also be added, which if applicable, would see the principal sum doubled. The claim has, as anticipated, recently been rejected by HMRC. The Company has lodged an appeal to the independent First Tier Tax Tribunal.
Ian Penrose, Chief Executive of Sportech PLC commented:
"2010 has been a transformational year for Sportech. We completed a major acquisition of Scientific Games Racing, positioning Sportech as one of the world's leading suppliers and operators of pools and tote gaming. We have also continued to modernise our existing operations. In a tough trading environment the Group continued to generate strong cash flows enabling material debt reduction.".
* adjusted pre-tax profit stated before amortisation of acquired intangibles, exceptional costs, share of joint venture losses and other finance charges
** pre share option charges
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Contacts:
For further information, please contact:
Sportech PLC 0207 268 2400
Ian R Penrose, Chief Executive
Steve Cunliffe, Finance Director
Pelham Bell Pottinger 0207 861 3232
David Rydell / Emma Kent / Rosanne Perry
About Sportech PLC
Sportech is one of the world's leading pools and tote gaming companies. Every year we process over $13 billion in bets and we have a presence in 30 countries. Our businesses include:
The Football Pools:
The world's oldest football gaming company, founded in 1923. The Football Pools has paid out over £10 billion in prize money and donated over £1.1 billion to good causes in Sport and the arts. The Football Pools is an official licensee of The English Premier League and Football Leagues, and official partner of the Scottish Premier League and Football Leagues. Over 500,000 customers play The Football Pools every week and we operate across a number of channels including postal, telephone, collectors, retail and online.
Sportech Racing:
Comprising the former Scientific Games Racing and Autotote Enterprises, Sportech Racing is recognised within the industry as the leading provider of pools/tote wagering services to the horseracing industry. We provide a wide range of wagering technology solutions to racetracks, off-track betting networks , internet wagering operators and casinos. Our customers are some of the biggest racing organisations in North America, Europe, Latin America, the Caribbean and Asia.
As part of our Sportech Venues business, formerly Autotote Enterprises, we operate 14 off track betting (OTB) venues (licenses allows 18) and a telebet business, under an exclusive license in perpetuity to operate pari-mutuel wagering on horseracing in the state of Connecticut U.S.A. We also operate OTB venues, Point of Sale facilities and online wagering, under an exclusive license to operate pari-mutuel wagering on horseracing in the Netherlands.
Sportech e-Gaming:
As the trusted name in online gaming, Sportech operates some of the most established brands in the industry including Littlewoods, Vernons and Game On. We have a wide product range which includes online bingo, casino, poker, instant win games and lotteries.
Joint Venture in India:
In January 2010 the Group announced its entry into a Joint Venture with Playwin, to launch a multi-platform sports prediction business in the Indian market, offering customers a range of sports and fantasy games both online and via mobile phone.
For more information on Sportech PLC, please visit www.sportechplc.com