International betting tech firm Sportech has published its interim results for the six months ended 30 June. The figures, which came in lower year-on-year, reflect an ongoing period of transition for the company as it moves towards a more digitized business, while removing cost to increase efficiencies. Revenue growth in Racing, Bump 50:50 and Lottery were all, it said, offset by “venues’ challenges”.
Total Group revenue for the half was £32.6m versus £33.2m in 2018, while EBITDA before sports betting investments of £4.3m and adjusted EBITDA of £3.4m were down from £4.4m and £3.9m in 2018. The adjusted EBITDA in 2019 includes £0.9m of costs related to sports betting, up from £0.5m in 2018.
The firm noted that corporate costs had further reduced by 22% in the period, with positive decisions taken to restructure the business resulting in exceptional cash outflows of £1.5m, down from £1.7m year-on-year. Group net cash was £11.8m as of June 30, 2019, against £14.7m on December 31, 2018. The Board’s current outlook for the full year remains in line with expectations.
In its executive summary, Playtech stated that the Tote, its core pool wagering business, has demonstrated growth, with Global Pool and World Pool initiatives now delivered. The challenges facing venues, specifically in terms of operational leverage, were being tackled via cost management, asset review and strategic initiatives it said.
Lottery, meanwhile, was cited as delivering stable growth with “opportunities emerging following acquisition”. The Bump 50:50 market position, noted the firm, has been strengthened with record client acquisitions. H1 investment is core to growth plans it added.
CEO Richard McGuire said: “2019 marks a year of transition for Sportech with a clear focus on challenging the predominantly ‘industrial’ culture, whilst driving efficiencies and delivering a range of products that enhance user experience.
“Sportech has made good progress in the period, with the group’s senior management team bolstered to help ensure accountability and increased effectiveness across every business line. Rigorous cost management remains a core focus for the group and the Board expects to see further benefits going forward from the measures already taken.
“Further digitisation across existing and new business lines, the elimination of certain expensive strategies, the implementation of a lower operational cost base, and an enhanced global suite of products form the roadmap for H2, positioning the group for 2020 and beyond. Management remain committed to delivering a superior product range to our global clients and remain confident about the group’s future potential.”
Sportech’s H1 performance has not been helped by lack of movement towards legalised sports betting in Connecticut where it has invested significant energy and focus. “The situation remains complex and despite diligent efforts from numerous stakeholders, legislation was not passed during the regular legislative session, which ended in early June 2019” it said.
“The group continues to work with state legislators and established state licensed gaming operators to seek a solution and deliver a comprehensive legal and regulatory framework for Sports Betting, either through a 2019 special session or in H1 2020.”