Sportech reveals revenue spike as sale process continues
Sportech has reported a year-on-year increase in revenue for the three months to September 30, and also issued an update to ongoing takeover talks and its position regarding the appointment of a replacement chief executive.
Revenue in the third quarter amounted to £18.3m (€20.8m/$24.1m), which is up 7.6% on the £17m posted in the corresponding period last year.
Sportech’s Bump 50:50 sports raffle product experienced the most growth in the quarter, with revenue up 41.5%, while the company’s Racing and Digital division recorded an 8.1% year-on-year increase in revenue.
Revenue from venues also climbed 6% year-on-year during the third quarter.
The quarterly performance means year-to-date, to the end of September, totalled £54.7m, which is 5.8% ahead of the same point in 2016.
Richard McGuire, non-executive chairman of Sportech, said: “The group has continued to trade well in the first few weeks of the current quarter and the outcome for the full year remains in line with board expectations.”
Sportech has also issued an update on a potential takeover, after the company last month confirmed it was seeking offers for the business.
Although Sportech said there can be “no certainty that an offer will be made”, the firm has held talks with interested parties and will provide a number of these with access to due diligence information and management in the coming weeks.
Sportech expects this initial round of discussions to close by the end of the year, with a timetable for seeking offers to conclude the end of January 2018.
McGuire added: “During the coming weeks, we expect to provide a further update on the proposed distribution to shareholders and, at the appropriate time, provide further comments relating to the ongoing formal sale process.”
Meanwhile, Sportech has said it does not intend to replace two senior members of staff that it recently confirmed are to leave the company.
In September, chief executive Ian Penrose and chief financial officer Mickey Kalifa informed the company’s board of their intention to resign.
Sportech’s board has identified annualised cost savings, including compensation of executive directors, totalling no less than £2m per year and, as such, the board does not currently intend to replace the pair, in order to help with ongoing cost-saving plans across the company.
McGuire concluded: “Our financial position remains robust, and will benefit further from annualised cost savings of at least £2 million.”
In addition, Sportech intends to appoint an additional independent non-executive director, as current independent board members have become more involved in executive matters, as well as managing the formal sales process.