VAT charge impacts Sportech H1 2015 performance

IanPenrose
Ian Penrose

Sportech Plc, the gambling operator at the centre of a takeover bid by Canadian gaming group Contagious Gaming has recorded a profit slump to £7.9 million for its H1 2015 performance, down 91% from the £87 million profits recorded in 2014.

The operator of the Football Pools’ results have been impacted by the VAT repayment on its ‘Spot the Ball’ claim. Sportech is set to re-appeal the £87 million charge on 3 November. Excluding exceptional income, its adjusted pre-tax profit declined to £5.4 million from £6.3 million.

Detailing further performance insights, Sportech recorded a slight decline in its US racing division which recorded total sales of £51 million (H1 2014 – £52.6 million). Sportech US would post a 10% decline in EBITDA earnings to £11 million for the period.

H1 positives, would see Sportech record EBITDA digital earnings of £4.1 million, as the integration of the new Quantum Tote system would come to effect on partner Betfred’s UK Totepool System.

Sportech who last week confirmed Contagious Gaming’s interest in takeover, stated that it would continue to focus on modernising its Football Pools business, reaffirming that its plans were on “on track”. The produce had seen a stability in its revenues with player subscriptions accounting for 85% of active customers.

Ian Penrose, Chief Executive of Sportech PLC, said:

“We have built a portfolio of highly regulated businesses in the US and UK, and have continued to invest in each to bring through innovation and technological improvements. We are now well positioned to build upon our unique position, based on our regulated racing and pools operations. Examples include the highly successful replacement of Betfred’s Totepool entire hardware and software betting systems, and the realisation of a significant profit on our early online initiatives in New Jersey.

Our industry is currently experiencing a period of considerable consolidation, and we continue to explore all options to deliver strategic value for our shareholders. We remain confident in the underlying strength of the business.”

Sportech Plc Performance Overview H1 2015

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