Sportech To Return At Least 20 Million
Sportech PLC shares were trading higher on Thursday as the company trebled its annual profit in 2016, struck a deal to sell its Football Pools business, and unveiled that GBP20.0 million will be returned to shareholders this year.
The company said a conditional agreement has been signed to sell off its Football Pools business for GBP83.0 million in cash on a debt free, cash free basis. The company said the deal offers an attractive opportunity and will leave it as a focused gaming business primarily based in the US based around the Racing & Digital and Venues divisions.
The unit will be sold to a newly formed company controlled by funds advised by OpCapita LLP
“The sale of The Football Pools business represents an important strategic development for Sportech, having established a strong platform for growth, following completion of an extensive and successful modernisation programme. We have delivered our objective of stabilising earnings, and are delighted to have concluded this deal for Sportech’s shareholders, The Football Pools Business and its employees,” said Chief Executive Ian Penrose.
Sportech said it plans to return GBP20.0 million to shareholders through a tender offer this year, and said a further return may be made to shareholders after the sale of the Football Pools business is completed.
In further good news for shareholders, Sportech also reported its annual results for 2016, showing that pretax profit trebled to GBP30.7 million from GBP9.7 million a year earlier despite a dip in revenue to GBP98.6 million from GBP100.2 million.
The significant jump in profit was the result of “exceptional income” of GBP91.0 million – related to a VAT refund – versus income of GBP8.1 million the year before, partly countered by a rise in impairments to GBP63.7 million from GBP6.1 million.
Adjusted pretax profit for the year was GBP13.8 million compared to GBP11.8 million the year before, excluding the exceptional gains.