Sportech posts revenue growth despite challenging retail environment
Sportech Group continued to operate all business lines through most of the period before announcing the completion of the disposals of the Global Tote business to BetMakers Technology; the sale of Bump 50:50 to Canadian Banknote and the sale of a freehold property in New Haven, Connecticut in June 2021.
Those disposals supported a resulting stronger balance sheet, with shareholder equity increasing by £23.3 million to £48.5 million (31 December 2020: £25.2 million), including an impressive cash position excluding customer cash of £48.6 million at the end of the period (31 December 2020: £16.8 million, which included £6.12 million deposit on a corporate sale and cash in disposal entities, and excluded customer cash balances).
Post the period end the Group announced and completed a move to AIM, an Exchange which is more suited to the Company’s current size and strategy and, in August 2021, shareholders approved a proposed share capital reduction and a subsequent significant capital return to shareholders.
COVID related challenges persist within the group’s retail food and beverage operations in Connecticut, however wagering handle increased significantly versus the challenged 2020 period and in aggregate only declined 1.2% versus the 2019 comparable period. Online wagering handle which recorded solid gains through 2020 continued during the period +16% versus 2020 and +45% versus the 2019 comparable period.
The Lotteries unit delivered +75.1% revenue growth versus the challenged 2020 comparable period, unfortunately with domestic and international travel remaining difficult, this corresponded to 9% lower revenues than the H1 2019 period. However, in recent months revenues have returned to comparable 2019 levels. Post the period end, the group announced discussions had commenced relating to a potential sale of a terrestrial lottery contract and will update the market in due course.
Richard McGuire, Chief Executive Officer of Sportech, said: “The first half of 2021 marked a notably successful period of restructuring as Sportech completed business disposals, secured the move to the AIM market and built further on the online revenue gains from 2020. In recent weeks we also secured shareholder support for a proposed capital reduction and a significant capital return to shareholders and were delighted to announce a 10-year business relationship with the Connecticut Lottery Corporation to support their sports betting initiative.”
“Shareholder funds during H1 almost doubled to £48.5 million, we have no debt and significant cash to deliver on our shareholder and investment commitments.”
“In August, the Group also announced senior management changes and after several years of restructuring the business and pursuing a clear goal of realising shareholder value where possible, that objective now being mostly achieved, that our CFO Tom Hearne and I would hand over the leadership reins to the very experienced Andrew Lindley and Nicola Rowlands who know the business and its markets well. The business is in a strong position and it has been my privilege to work with so many dedicated professionals, business partners and supportive shareholders and I know the future of Sportech is in extremely capable hands.”