Severe winter weather in the US state of Connecticut contributed to a perfect storm of headwinds for gambling company Sportech (SPO), which saw revenues in all of its divisions drop on a constant currency basis.
The venues business was held back by harsh weather in the US north-east and the temporary closure of a "popular and profitable" venue in Florida, which is being refurbished. Meanwhile, its racing and digital division had to contend with the overhaul of the systems that power its Betfred Totepool business. Tote sales still rose year on year, but the division was held back by the loss of two significant customers in its digital business-to-business unit. Finally, the beleaguered UK football pools business - Sportech's third division - showed signs of stabilisation, with its core subscription revenues flat.
The only really good news is that the group realised a pre-tax net gain of £8.1m from the sale of its share in the iGaming joint venture, SNG, to its partner, NYX, in May.
Yet Sportech may soon be taken over, following an approach earlier this month by Toronto-based rival Contagious Gaming. Management said any deal, of which there was "no certainty", would be at a premium to the Sportech share price of 62.63p on 13 August.
Prior to these results, broker Peel Hunt expected adjusted pre-tax profits of £12m for the full year, giving EPS of 4.4p (from £14.2m and 5.2p in 2014).
| SPORTECH (SPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 67p | MARKET VALUE: | £138m | |
| TOUCH: | 66-69p | 12-MONTH HIGH: | 87p | LOW: 47p |
| DIVIDEND YIELD: | nil | PE RATIO: | NA | |
| NET ASSET VALUE: | 60p* | NET DEBT: | 51% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 52.6 | 87.8 | 33.7 | nil |
| 2015 | 51.0 | 7.9 | 2.0 | nil |
| % change | -3 | -91 | -94 | |
Ex-div: na Payment: na *Includes intangible assets of £165m, or 80p a share | ||||
