Sportech PLC has revealed that its football pools business is performing to expectations, despite the uncertainty caused by the recent failed takeover bid by Burlywood Capital.
In a trading update, Sportech said that The Football Pools continues to trade in line with management expectations, and is demonstrating the move to stability that we have been striving for in 2016. It added: “Core revenues remain broadly in line with prior year, driven by an increase in spend per head, whilst both revenues and player numbers continue to grow in the digital channel.”
Earlier on this month, Sportech revealed that the £97.25 million sale of The Football Pools was dead in the water after problems raising capital in an uncertain economic situation post-Brexit.
The Group is also still waiting to hear back on whether the epic seven-year tax battle with HMRC is finally over. The dispute is in relation to money paid by Sportech on its Spot the Ball winnings between 1979 and 1996. In May 2016, Sportech was cleared of the £97 million VAT repayment, but HMRC has taken the issue to the Supreme Court which is to make an announcement shortly on whether an appeal will be granted.
Sportech continued a strategic diversification of its gaming technology division into Europe and Asia, with the successful implementation of betting systems into the Macau Jockey Club in September.
Bump 50:50, which extends Sportech’s activities to include the provision of electronic lottery/raffle systems to professional sports teams in North America, also continued its strong growth by deploying systems with market leading brands including the Dallas Cowboys, San Francisco 49ers, LA Clippers.
Sportech’s strategy is to build a leading position in the developing US and global betting industry. This includes the building of a flagship 20,000 square feet betting venue, sports bar and restaurant in Stamford. Construction remains on-budget, and is scheduled to be completed by April 2017.
The Group has net cash of £37 million as of October 31, which represents an increase of £0.8 million since June 30. Excluding the cash received from HMRC in respect of the VAT decision and customer cash balances, the Group now has net debt of £60.0 million as of the same date.
