Internet wagering group Sportech plc has announced that it has released its first half 2013 financial results, noting somewhat stable results.
Key financial indicators for the period were:
Revenue broadly stable at £57 million (H1-2012: £57.7 million)
EBITDA down at £11.8 million (H1-2012: £12.6 million)
Sportech Racing up 22%
Football Pools down 6%
e-Gaming losses despite an increase in marketing spend
Adjusted profit before tax down at £5.9 million (H1-2012: £7.4 million)
Profit before tax down at £1.9 million (H1-2012: £3.2 million)
Net bank debt of £56.7 million
VAT claim now anticipated at approximately £95 million
Operational highlights for the period were:
Sportech Racing - continued momentum across the business
New tote betting contracts signed with major gaming businesses in the USA, Denmark and UK
eBet Online acquisition performing well, with integration on track. Full range of e-Gaming products from a single wallet soon to be available
Launched exclusive online horserace betting platform for Connecticut customers
VAT - First-tier Tax Tribunal found in favour of Sportech - HMRC given leave to appeal, with the next hearing at Upper Tribunal to be held on 29 and 30 April 2014. Sportech's VAT claim increased from previous estimates and now anticipated at approximately £95 million.
Commenting on the results Sportech CEO Ian Penrose said, "The United States is a strategically important market for Sportech and I am delighted that our efforts have led to a 22% growth in EBITDA in our Sportech Racing business, which now accounts for over 40% of Sportech's operational EBITDA."
"With several significant new contracts in place, new products coming into the market soon, a flagship betting and sports bar opening later this year in Connecticut and full launch of Connecticut's only legal online horseracing betting platform by the year end, we are pleased with the momentum in our US business for 2014 and beyond.
"The strong performance of this business and its importance to the Group's future success has helped mitigate the challenges faced in e-Gaming during the period."
"We were delighted when, in March 2013, our VAT rebate claim anticipated at approximately £95 million was determined in our favour by the First-tier Tax Tribunal, although HMRC was subsequently given leave to appeal to the Upper Tribunal. Whilst this is proving a lengthy process, with the claim first lodged in March 2009, we are pleased with our success to date and look forward to the appeal hearing in April 2014."