LIVERPOOL football pools and tote betting group Sportech will turn a year of transformation into one of pre-tax profit, chief executive Ian Penrose said today.
Last September the Walton group completed the £51.4m acquisition of US-based Scientific Games Racing (SGR), now named Sportech Racing, after a nine month regulatory process to make it one of the industry leaders, processing more than £8.5bn of bets a year with customers in over 30 countries.
The business is now highly cash generative, but costs associated with the lengthy acquisition process meant Sportech reported a £5.9m pre-tax loss for the year to December 31.
However, that compares with a £17m loss previously and Mr Penrose said pre-tax profits will flow this year.
On an earnings before interest, depreciation and amortisation (Ebitda) basis, the group made £19.7m and Mr Penrose said analysts have already pencilled in £26m for the current year.
Revenues rose by £6.6m to £71.2m.
Mr Penrose said today: “We’re very pleased with the results. It’s been a tough year, a transformational year for the organisation.”
Referring to the US acquisition he added: “To go through a very significant regulatory approval was a lengthy and detailed process of about nine months.
“But having got that done we are very pleased to be sat here today as one of the world’s leading pools and tote businesses.
“It brings us a business which is significant in terms of scale, with customers in over 30 countries. We have customers everywhere and licences now to carry out gaming activities in many countries.
“We want to improve our business by offering more gaming products to that market place while working closer with our customers.”
Regulatory approval following the SGR acquisition opens up markets in the US and the Netherlands and Sportech aims to capitalise on its role there as a licensed gaming provider.
And a joint venture with the Essel Group, one of India’s largest conglomerates and the owner of India’s leading lottery business, Playwin, will open up more opportunities, Mr Penrose revealed.
He said: “In India we want to have football and cricket pools games in place ahead of the England Cricket Test there this summer and the new football season.”
Its football pools game, the former Littlewoods business, paid out two record jackpots last year with a £3m win for a 14-strong syndicate in March and another £3m payout to a single winner in October, the highest winner in football pools’ history.
Unveiling the results today Mr Penrose said: “The business is strongly cash generative which will allow us to continue making improvements to our customer offering and as a result have the capability for strong profitable growth by taking advantage of the rapidly growing gaming markets worldwide.”
He added: “Our current trading is in line with market expectations and we look forward to the future with confidence.”
Liverpool stockbroker Panmure Gordon said Sportech’s results were in line with its expectations: “We strongly reiterate our ‘buy’ recommendation and 67p (share) price target, implying 71% upside potential.”
