Sportech year-end: profits dip after egaming fall off, investment
Sportech's operating profit fell 14% in 2009 due to investment in its online pools and under performance in its online bingo, casino and poker division, the company's year-end results reveal...
SPORTECH’s operating profit fell 14% in 2009 due to investment in its online pools and underperformance in its online bingo, casino and poker division, the company’s year-end results reveal.
The pools betting company’s operating profit fell £3.1m year-on-year to £19.5m, from £22.6m the year before; while adjusted profit before tax before exceptional costs, amortisation and other non-cash finance charges fell by 12% (£2.1m) to £14.7m, from £16.8m.
Chief executive Ian Penrose said: “That the decline in profitability is due primarily to our continued investment in establishing our online football pools business and the underperformance of our egaming business is testament to the resilience of the business in these tough times. Strong action has been taken to address the underperformance in these areas.”
Action taken included Sportech’s post year-end acquisition of Scientific Games Racing (SGR), the pari-mutuel technology provider and venue management business division of US giant Scientific Games, Penrose said. In addition Sportech signed a joint venture in India with Playwin, the Indian lottery and gaming brand owned by Essel Group.
“The strategic acquisition of SGR, together with our entry into the Indian market in partnership with one of India’s leading organisations, offers a unique opportunity to build a profit focused, global gaming business from strong pari-mutuel sporting and technology foundations,” he said.
The acquisition of SGR for a total consideration of up to $83m (£51.4m) was funded by a £29.2m placing and open offer that included Playtech taking a £10m stake in Sportech, ahead of a further deal in which Scientific will take a 20% stake in Sportech.
On 31 December 2009, Sportech secured £90.8m revised banking facilities, which are in place until 2013 and which offer the group the flexibility to grow organically and make acquisitions.
Other highlights included the completion of integration of the Vernons business Sportech acquired in 2007 and strengthening Sportech’s New Football Pools brand ties with newspapers including The Daily Telegraph, The Daily Mail, Metro and, most recently, the The Trinity Mirror Group, publisher of newspapers such as The Daily Mirror since January.