News that Sportech (SPO) finally agreed to sell its iconic football pools business to private equity firm OpCapita for £83m - just months after shelving plans to flog it for £97m to Burlywood Capital - stole the headlines on the gambling specialist's results day. While accepting £14m less probably didn't impress investors, Sportech's pledge to return £20m of the proceeds to shareholders more than compensated.
That welcome update was enough to overshadow an otherwise underwhelming set of results, which on a statutory level (see table) were flattered by the £97m won late last year from a long-running VAT battle.
The loss of Sportech's lucrative California Tote betting contract offset promising new wins in its racing and digital business, causing divisional cash profit to fall by £0.3m at constant currencies. And in its Connecticut operations, revenue and cash profit fell by £1.5m and £0.5m, respectively, after the US Triple Crown horseracing season attracted less interest and the reopening of its refurbished jai alai venue failed to draw in the same level of big spending punters as before.
Analysts at Peel Hunt expect adjusted pre-tax profit of £5.5m this year, setting aside the pools business, compared with the £13.8m generated in 2016 (EPS: 5p).
| SPORTECH (SPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 99.8p | MARKET VALUE: | £206m | |
| TOUCH: | 99.8-101.5p | 12-MONTH HIGH: | 106p | LOW: 50p |
| DIVIDEND YIELD: | nil | PE RATIO: | 16 | |
| NET ASSET VALUE: | 72p* | NET CASH: | £36.5m | |
| Year to Dec 31 | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 108 | 1.3 | 2.6 | nil |
| 2013 | 110 | 5.3 | 1.7 | nil |
| 2014 | 104 | -20.0 | -10.4 | nil |
| 2015 | 100 | 9.7 | 3.3 | nil |
| 2016 | 98.6 | 30.7 | 6.4 | nil |
| % change | -2 | +216 | +94 | - |
*Includes intangible assets of £110m, or 53p a share | ||||
