Sportech transition progresses

Sportech PLC released a third quarter trading update Monday, detailing a 7.6 percent revenue increase year-on-year and a steady forecast on anticipated full year results.

Key performance indicators for the three-month period from July 1 2017 to September 30 2017 include:

· Revenue increase of 7.6 percent to reach GBP 18.3 million (Q3/2016: GBP 17.0 million)

· Year to date revenue increased by 5.8 percent to GBP 54.7 million (YTD/2016: GBP 51.7 million)

· Bump 50:50, the sports raffle product, increased revenues by 41.5 percent following further signings

· Other Racing and Digital revenues increased 8.1 percent y-o-y.

· Venues total revenue increased 6.0 percent y-o-y.

· Current assets, less current and longer-term liabilities, of GBP 62.6 million with no debt.

The Group intends making a further, “significant” distribution to shareholders later this year, the timing conditional on the approval of a reduction of the company’s share capital by the Scottish Court which would create a capital reserve of up to GBP 55.6 million.

Richard McGuire, Non-Executive Chairman of Sportech, said:

“The Group has continued to trade well in the first few weeks of the current quarter and the outcome for the full year remains in line with Board expectations.

On a prospective sale, Sportech revealed it had initiated a Formal Sale Process on 19 October 2017, utilizing the services of Canaccord Genuity, and has engaged with several interested parties.

Following the signing of non-disclosure agreements, selected parties will gain access to due diligence information and management in the coming weeks, the statement reveals.

This initial round of discussions is expected to conclude by the end of 2017, with a timetable for seeking offers by the end of January 2018.

Following the resignations of chief financial officer Mickey Kalifa and chief executive officer Ian Penrose (see previous reports), the Board does not intend filling either position rather opting to take advantage of a GBP 2 million per annum cost saving.

Richard McGuire will assume the role of Executive Chairman, effective 4 December 2017 and Sportech will look to appoint an additional independent non-executive director.

“Our financial position remains robust, and will benefit further from annualised cost savings of at least £2 million,” McGuire said.