Strong 2016 reported by Sportech

UK betting technology provider Sportech plc has posted a strong set of FY-2016 results, flagging the following highlights:

* Profit before tax up 216 percent at GBP 30.7 million (2015: £9.7m);

* Results in line with expectations with overall EBITDA up 3 percent to GBP 23.8 million (2015: GBP 23.1 million);

* Victory in the eight-year VAT judicial struggle with HM Revenue and Customs, resulting in a GBP 97 million refund;

* Plans to return capital to shareholders by way of a tender offer for approximately GBP 20 million of Sportech ordinary shares, representing a buyback of around 10 percent of the issued share capital;

* Transformation in group financing with adjusted net cash balances at 31 December 2016 of GBP 36.5 million compared to adjusted net debt of GBP 57.7 million in 2015. The latter reduces by GBP 21.5 million once the Spot the Ball tax and fees are paid, and following receipt of the remaining GBP 3 million;

* Balance sheet strengthened by GBP 22.6 million despite a detailed review of assets leading to a non-cash impairment of GBP 63.7 million;

* Adjusted profit before tax is up by 17 percent to GBP 13.8 million (2015: GBP 11.8 million)

” On a constant currency basis, EBITDA, excluding the closed collector channel, remained level with 2015 at GBP 23.8 million, made up of:

Sportech Racing and Digital – GBP 9.4 million – down GBP 300,000 compared with the same period a year ago.
Sportech Venues – GBP 2.7 million, GBPO 500,000 down y-o-y.
Football Pools – up 5 percent at GBP 15 million.

Post the reporting period, the company announced the sale of its The Football Pools subsidiary for GBP 83 million in a deal with a private equity fund.

Group chief executive Ian Penrose said in his report Thursday:

“This has been a transformational year. We have moved into a strong net cash position and have today announced details of a return of capital to shareholders. We have also announced the sale of our Football Pools business for GBP 83 million, following a highly successful modernisation programme.

“The Group is now in a strong position and more focused to take advantage of the strategic positioning of its predominantly US based businesses.”