Sportech PLC
01 February 2007
Trading Update
Sportech PLC (the 'Company'), the UK's leading football gaming business,
announces its trading update for the year ended 5 January 2007.
Following a period of sustained progress, the Board is pleased to announce that
the financial results will be in line with market expectations. For the year
ended 5 January 2007, the Company expects operating profit from continuing
operations before interest, tax and exceptional items to be approximately
£18.4m.
Significant progress has been made in reducing the overall level of debt, and as
at 5 January 2007, net debt is expected to have fallen to approximately £90
million, a decrease of 17 per cent against the comparative period (2006:
£108.1m).
The Board's strategic review is in its closing stages and the Company has
already implemented a number of key findings. The Company is now a far more
focused and cash generative business with its principal operations now
profitable and growth orientated.
The Football Pools business is trading in line with expectations. Annual
customer attrition has slowed significantly, to an overall single digit
percentage level, the smallest rate of decline since 1994.
Encouragingly, the direct channel Football Pools business has seen an absolute
halt in customer number decline for the first time since launch in the 1990s.
Growth is being pursued through the dual strategy of enhancing and refining
existing products to make them more engaging and accessible and the Board
expects this will reduce attrition rates still further as well as increasing
revenue. In addition, new products are being created that will be attractive to
a wider audience.
Enhanced distribution is a key driver for the future development of the Football
Pools. It is enjoying a more prominent web presence and the Company is in
discussions with a number of retail-led third parties to significantly increase
distribution of this popular gaming product. Importantly, the Board believes
that there are significant opportunities for international expansion and it is
currently in discussions with a number of selected partners for distribution in
large overseas territories.
The creation of a new and enhanced brand for the football gaming business,
including the Football Pools and Spot the Ball, is underway and is expected to
be launched in late 2007.
Online bingo has performed well, with over 5,500 active players since the
business was launched in February 2006 and the online casino and poker
businesses have seen the recovery which was reported in the first half of 2006
continue into the second half with increased turnover and profitability. The
performance of online poker and casino reverses a period of 18 months of
underperformance as a direct result of the management and business changes
introduced.
Following disposals and termination of a number of contracts in 2006, the
Company is now concentrating on a streamlined and stronger product model
incorporating the core business of football-related gaming with the online
activities of casino, poker, bingo and fixed odds games.
The overhaul of the Company's IT structure is on target and on budget and when
completed will provide important customer-facing benefits and reduced costs.
Ian Penrose, Chief Executive, said:
'We are making good progress on the goals set out in our strategic review and
continue to transform the Sportech business.'
The Company expects to announce its preliminary results for the year ended 5
January 2007 on 29 March 2007.
- ends -
For further information:
Sportech PLC
Ian Penrose, Chief Executive 0151 288 3376
Bell Pottinger Corporate & Financial
David Rydell/Emma Kent 020 7861 3232
This information is provided by RNS
The company news service from the London Stock Exchange
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