AGM Trading Update

RNS Number : 1444R

Sportech PLC

26 June 2020

 

For immediate release

26 June 2020

Sportech PLC

('Sportech' or the 'Group')

AGM Trading Update

Notice of Interim Results

Sportech, an international betting technology business, announces a trading update ahead of its Annual General Meeting ('AGM') to be held at 10.00 a.m. today. Unfortunately, and as previously announced, shareholders will not be able to attend the AGM in person owing to Covid-19 safety measures.  The AGM results will be released following its conclusion.

Trading Update

As previously announced, trading was in line with the Board's expectations up until mid March 2020; however, as the Covid-19 pandemic became more widely spread the Group's trading was materially impacted and the Board took decisive early action to manage the Group's cost base, cutting costs and effectively managing cash where possible.

The Group's Covid-19 update issued on 18 March 2020 forecast a scenario based on the curtailing of sporting events through to the end of June 2020, resulting in the Group's net cash position easing to £7.5 million. Based on actions taken, the Board expects net cash to be £8.9 million at the end of June 2020.

Revenues were impacted in Q2-2020 across all business areas; however, the Group continues to work tirelessly with clients to innovate and manage our respective businesses. Despite the challenging global situation, Sportech is pleased to report that it has agreed new deals or extensions with numerous international clients including TVG (New Jersey), Emerald Downs, Monmouth Park, and Borgata Casino. The Group also extended its strong relationship with the UK Tote Group, confirming a significant multi-year international commingling agreement. Last week, Sportech supported the second successful Royal Ascot Tote Superpool for stakeholders UK Tote Group, Ascot Racecourse and the Hong Kong Jockey Club. The Group also entered into a significant new agreement with Macau Horse Racing Company to update to their Quantum™ System software and install Sportech's new responsive digital betting platform.

The lack of spectator attended sporting events, potentially for the remainder of 2020, will be an obvious challenge for Bump 50:50 this year. However, the Bump team secured an impressive 28% increase in client agreements since the beginning of 2020 and early results from the new online progressive jackpot initiatives and the targeted growth from within the 'not for profit' charitable sector are encouraging.

Consumer operations in Connecticut have now partially re-opened for food and beverage service with in-venue OTB operations cautiously expected to resume service in late July 2020, pending State confirmation. Our online, mobile and phone betting platform remained available throughout the crisis and demonstrated growth, albeit from a low base.

The Group delivered a significant reduction in operational costs in H1-2020 to partially offset severe revenue declines, due to the global Covid-19 challenge. Determined vigilance of the cost base will continue whilst operating efficiently and effectively during staggered reopening.

This remains a challenging environment for the Group and despite core divisions reopening, there  remains uncertainty to when all businesses will return to full operational capacity. Management will continue to focus on delivering a compelling international product to our clients, resulting in additional long term contracts, and ultimately providing core long term growth beyond the prevailing global situation.

Notice of Interim Results

The Group will release its interim results for the six months ended 30 June 2020 on 10 September 2020. An analyst briefing will be hosted on that date, with details to follow.

Richard McGuire, Chief Executive Officer of Sportech, said:  

"Despite the unprecedented challenges that have affected us all, I have been humbled and impressed by the universal willingness of Sportech colleagues to support our clients, support our business and support each other. The delivery of critical client projects and the securing of a significant number of new contracts in the midst of this global pandemic is testament to the resilience of the Sportech team and highlights the integrity of our people and the Group's digital strategy progression. Challenges obviously remain, especially as our business resumption timetable is governed by external factors. However, as a Group we have no debt, a stable balance sheet and we intend to emerge from this pandemic operationally and technologically stronger."

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Publication on website

A copy of this announcement is also available on the Group's website at www.sportechplc.com

Contacts:

Sportech PLC	Tel: [phone]
Richard McGuire, Chief Executive Officer
Peel Hunt	Tel: [phone]
(Corporate Broker to Sportech) George Sellar / Andrew Clark / Will Bell
Buchanan	Tel: [phone]
(Financial PR adviser to Sportech) Henry Harrison-Topham / Mark Court / Jamie Hooper	[e-mail]

Notes to Editors:

About Sportech

Sportech PLC, an international betting technology business, delivers solutions and services for some of the world's best-known gaming companies, sports teams, racetracks, casinos and lottery clients as well as owning and operating its own gaming venues in Connecticut under exclusive licences.

The Group focuses on highly regulated markets worldwide. It has more than 29,000 betting terminals deployed to over 400 clients in 38 countries. Its global systems process US$12.3 billion in betting handle annually. In the US, it operates across 36 states. The Group has invested over US$60 million in the last five years in the successful expansion of its US gaming Venues, the diversification into raffle and lottery gaming platforms, and in developing its technology services, resulting in its proprietary Quantum™ System being the most widely deployed pari-mutuel betting system globally.

 

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