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Interim results for the six months ended 30 June 2015

  • 20 Aug 2015
  • Rob
  • 0

Sportech, one of the world’s leading pool betting operators and technology suppliers, focused on highly regulated markets worldwide, is pleased to announce its interim results for the six months ended 30 June 2015.

 Strategic developments

  • US – Strategic investments delivered value with disposal of online interests in New Jersey for a pre-tax gain of ¬£8.1m
  • US – Investment in technology securing new B2B customers, growing online betting in Connecticut and expanding position in professional sports raffles via Bump 50:50
  • UK – Football Pools modernisation plan on track, with stabilisation of subscription revenues in H1
  • Group – On 14 August we announced that we had received an indicative offer to acquire the Group from Contagious Gaming Inc.
  • Group – ¬£97m VAT refund appeal to be held in the Court of Appeal on 3 November 2015¬†

Financial and operational highlights 

 

Reported

H1 2015

£m

Constant currency

H1 2014

£m

Constant currency change

%

 

Reported

H1 2014

£m

Revenue

51.0

54.3

(6.1)%

52.6

EBITDA1

11.0

12.3

(10.6)%

12.0

Adjusted profit before tax 2

5.4

6.5

(16.9)%

6.3

Statutory profit before tax 3

7.9

0.8

887.5%

87.8

Adjusted net debt 4

63.3

66.4

(4.7)%

66.7

 

Group

  • EBITDA down ¬£1.3m to ¬£11.0m
  • ¬£8.1m pre-tax profit from disposal¬†of SNG, our iGaming joint venture in New Jersey
  • Statutory profit before tax up by ¬£7.1m to ¬£7.9m (excluding the 2014 gain from Spot the Ball VAT claim which was subsequently reversed)
  • Net debt reduced by ¬£3.1m from prior year to ¬£63.3m. Cash of ¬£5.1m received in H2 in relation to the above mentioned SNG disposal

Sportech Racing and Digital 

  • EBITDA up ¬£0.3m to ¬£4.1m¬†driven by successful implementation of¬†Quantum Tote¬†to overhaul¬†Betfred’s UK Totepool¬†systems¬†
  • Diversification into¬†in-stadia¬†50:50 raffle technology for North American professional sports teams is gathering momentum¬†via Bump

Sportech Venues 

  • EBITDA down ¬£0.8m to ¬£1.4m, due to extreme winter weather causing race cancellations and the closure for refurbishment of a major Jai Alai venue
  • San Diego¬†sports bar, restaurant and betting¬†venue¬†projected to open¬†November 2015. In Connecticut, online revenues are up 59% and we remain in ongoing dialogue in relation to expanded gaming initiatives (slots)

Football Pools 

  • Business modernisation plan on track; revenue stability achieved in core subscription business (which now accounts for more than 85% of customers)
  • EBITDA down ¬£0.8m to ¬£7.4m, due to expected decline in revenues in the Collector channel

Ian Penrose, Chief Executive of Sportech PLC, said:

“We have built a portfolio of highly regulated businesses in the US and UK, and have continued to invest in each to bring through innovation and technological improvements. We are now well positioned to build upon our unique position, based on our regulated racing and pools operations. Examples include the highly successful replacement of Betfred’s Totepool entire hardware and software betting systems, and the realisation of a significant profit on our early online initiatives in New Jersey.

Our industry is currently experiencing a period of considerable consolidation, and we continue to explore all options to deliver strategic value for our shareholders. We remain confident in the underlying strength of the business.”

Notes:

1     EBITDA is stated before exceptional costs and income and share option expense.

2     Adjusted profit figures are stated before amortisation of acquired intangibles, impairment of goodwill, exceptional costs and income, share of loss after tax of joint ventures and other finance (charges)/income.

3     Statutory profit before tax H1 2014 at constant currency is also stated excluding the net exceptional income in relation to the Spot the Ball VAT refund received in June 2014 of £87.1m.

4     Adjusted net debt is cash balances excluding monies received from HMRC in relation to the Spot the Ball VAT refund, net of borrowings.

 

Note: To aid understanding of the performance of the Group, the results have been presented on a constant currency basis due to the significant movement in the US Dollar and Euro against Sterling in the period versus the same period of the prior year.

 


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