Sportech reveals egaming performance slide
Operator expects result of tax repayment claim of more than £80m in February.
Sportech’s egaming performance has been “slightly disappointing”, while its US business has impressed, the operator announced in a pre-close trading update this morning.
Noting that trading for the year ended 31 December 2012 has been in line with company expectations, with good performances from its US venues and racing operations, as well as its football pools business, Sportech however said its less impressive online gaming numbers were due to brand changes and systems migrations currently that were still being addressed.
The operator said it expects a February tax tribunal to reveal whether or not it has successful in its claim for a VAT repayment of more than £40m, which could rise to more than £80m after interest, for its Spot the Ball game between 1979 and 1996.
Leaving its forecasts unchanged at £26.4m EBITDA for the financial year 2012, brokerage Panmure Gordon reiterated its ‘Buy’ recommendation in a note this morning, with analyst Simon French explaining that “with a significant and growing proportion of Sportech’s earnings originating from the United States, we believe it should trade at least in line with the sector”.
“We expect a stronger performance in egaming in 2013 as the brand and migration issues are successfully resolved,” French added.
French also cited December’s acquisition of eBet as a potential cause for growth in earnings in 2013, while the launch of online betting on horseracing in Connecticut, set for the second quarter, could lead to a forecast upgrade.