Sportech Profits Fall Despite US Boost

Sportech operators of betting pools and horse racing have seen a dip in operational performance with regards to revenue generation and profits from its range of gaming services. Sportech published its six month interim report for 2013, publishing that adjusted profits fell from £7.4m to £5.9m on  revenue flat at £57m.

The Liverpool based company noted that first half loss in its e-gaming division and movement in the timing of the one-off Tote system sales from H1 2013 to H2 2013, were the key factors behind the falls in revenues and earnings.

Sportech reported positive activity from its US based horse racing operations with revenues for group’s pools operations confirmed at £20.0m in the period (2012: £21.7m), generating £8.2m of EBITDA (2012: £8.7m). Average weekly customer spend increased to £2.61 (2012: £2.55).

Chief executive Ian Penrose Commented on company performance:

• “We have delivered a solid set of results and continue to make strategic and operational progress and build on our unique market position.
• “The United States is a strategically important market for Sportech and I am delighted that our efforts have led to a 22% growth in EBITDA in our Sportech Racing business, which now accounts for over 40% of Sportech’s operational EBITDA.
• “With several significant new contracts in place, new products coming into the market soon, a flagship betting and sports bar opening later this year in Connecticut and full launch of Connecticut’s only legal online horseracing betting platform by the year end, we are pleased with the momentum in our US business for 2014 and beyond.
• “The strong performance of this business and its importance to the Group’s future success has helped mitigate the challenges faced in e-Gaming during the period.”
• Referring to the VAT case, Mr Penrose said: “We were delighted when, in March 2013, our VAT rebate claim anticipated at approximately £95m was determined in our favour by the First-tier Tax Tribunal, although HMRC was subsequently given leave to appeal to the Upper Tribunal.
• “Whilst this is proving a lengthy process, with the claim first lodged in March 2009, we are pleased with our success to date and look forward to the appeal hearing in April 2014.”