Supplier of betting technology Sportech PLC released today a pre-close update for the financial year ended December 31, 2020, to update investors ahead of the final FY 2020 results set to be announced April 8, 2021.
Adjusted EBITDA In Line With Board’s Expectations
The Board of Directors at Sportech emphasized that the company continued to achieve operational efficiencies across the board, confirming that the group’s FY 2020 adjusted earnings before interest, tax, depreciation and amortization (EBITDA) should be in line with expectations.
“The Group was historically dependent on live spectator attendance at sporting events which were obviously heavily impacted by the global pandemic and we therefore took the necessary actions over the period to safeguard the Group.”
Richard McGuire, CEO, Sportech
The two metrics which became crucial during the course of 2020, capital preservation and net cash position, Sportech is expecting to end FY 2020 with net cash ahead of expectations, around £10.2 million.
“Sportech has delivered on key 2020 performance metrics – namely cash generation from operational activities, capex reductions and delivery of a lower operational cost base going forward – resulting in only a modest cash outflow since the outbreak of COVID-19.”
Richard McGuire, CEO, Sportech
In 2020, Sportech divested businesses and assets to generate investor returns, while at the same time continued to evaluate other investment opportunities within the Connecticut Venues business, with regards to sports betting.
“…We remain focused on our US headquarters in Connecticut where management and personnel remain fully motivated to be part of the States’ expanded gaming solution alongside our Connecticut gaming neighbours. We look forward to providing a further update when we report our results in April.”
Richard McGuire, CEO, Sportech
Ongoing Divestment
Early in December, Australian BetMakers Technology Group (BET) announced it reached conditional agreement for the acquisition of Sportech’s racing and digital assets, including the company’s flagship Quantum Tote betting engine, in a £34 million deal, and by the end of the month shareholders at BetMakers gave the green light for the deal to go ahead.
Sportech is also progressing with the transition of the Bump 50:50 business to Canadian Bank Limited, the group noted in the pre-close update, and the transaction is expected to close in the first half of 2021.
The group announced it had to renegotiate the conditional $6.75 million sale of the New Haven property in Connecticut, after a due diligence finding it required environmental enhancements. As a result, Sportech agreed to a revised $6 million sale price and an 18-month leaseback, starting to look for a replacement property in the New Haven area immediately.
The company projects aggregate net cash from all transactions to the amount of £36.1 million and the Board, in consultation with shareholders, will decide upon the optimal use of the generated funds.