10 Nov 2016 07:00
10 November 2016
Trading Update
Sportech PLC ("Sportech" or "the Group")
Sportech PLC, one of the world's leading pool betting organisations, today issues the following trading update for the period from 24 August to 9 November 2016.
Sportech's strategy is to build a leading position in the developing US and global betting industry. The Group's extensive activities in international pool and tote betting services for horseracing and football provide a regulatory and legal platform to support future growth across a wider range of gaming and entertainment opportunities.
Outlook
The Group continues to make good progress and trading remains in line with management expectations.
Strategic Update
On Tuesday 1 November 2016, we announced that we had terminated discussions with Burlywood Capital for the £97.25m 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 £97m 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.
Trading
The Group has continued to make good operational progress since our interim statement on 24 August 2016 and financial performance is in line with our expectations.
The Group has a few equity and property assets that are non-earning, and we are progressing with our plans to realise value from these positions.
Football Pools
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.
Racing and Digital
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.
Venues
We have commenced the building of the flagship 20,000 sq ft betting venue, sports bar and restaurant in Stamford. 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.
Banking Position
The Group has net cash of £37m at 31 October 2016, an increase of £0.8m since 30 June 2016. Excluding the cash received from HMRC in respect of the VAT decision and customer cash balances, the Group has net debt of £60.0m at 31 October 2016.
- Ends -
For further information, please contact:
Sportech PLC 020 7268 2400
Ian Penrose, Chief Executive
Mickey Kalifa, Chief Financial Officer
Brunswick Group LLP 020 7404 5959
Mike Smith
Stuart Donnelly
sportech@brunswickgroup.com
Investec Bank Ltd 020 7597 5970
Patrick Robb
Henry Reast
Peel Hunt LLP 020 7418 8900
Dan Webster