Completing the football pools now seems as quaint as morris dancing. Yet Sportech (SPO) - which operates in that end of the gambling market - still kept full-year underlying operating profit largely flat at £19.8m, even though group sales fell overall during the year. However, there's a real prospect that its luck may be about to change for the better if a tax tribunal looking at VAT payments on the group's spot-the-ball competition between 1979 and 1996 decides in Sportech's favour and refunds it up to £80m in accumulated back-taxes.
The pools business, despite its long-term decline, remains an important source of income. The business generated cash profit during the year of £18.5m - the first year in two decades that cash profits didn't decline. Although Sportech racing, the company's horse-racing division, saw sales decline 2.8 per cent to £65.4m, with operating profits there down 4 per cent to £6.6m. Efforts to diversify its revenues continued with the acquisition of Californian gaming company eBet. The company also has a presence in the New Jersey betting market - that US state recently liberalised its online gaming regime. Sportech signed a post-period agreement to supply 1,000 new machines to the Tote in the UK.
Peel Hunt forecasts adjusted pre-tax profits of £15m for 2013, giving EPS of 5.4p (2012: £15.5m/5.3p).
SPORTECH (SPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 87.5p | MARKET VALUE: | £174m | |
| TOUCH: | 87.2-87.5p | 12-MONTH HIGH: | 93.3p | LOW: 47.5p |
| DIVIDEND YIELD: | nil | PE RATIO: | 125 | |
| NET ASSET VALUE: | 68p* | NET DEBT: | 42% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 71.8 | 7.10 | 5.10 | nil |
| 2009 | 64.6 | -17.0 | -12.2 | nil |
| 2010 | 71.2 | -5.90 | -3.90 | nil |
| 2011 | 118 | 8.00 | 2.60 | nil |
| 2012 | 112 | 2.10 | 0.70 | nil |
| % change | -5 | -74 | -73 | - |
Ex-div:- Payment:- *Includes intangible assets of £201m, or 101p a share | ||||
