GAMING group Sportech will have to wait longer for the outcome of its VAT claim which could result in an £80m repayment from HM Revenue & Customs.
The Walton-based horse racing and football pools giant lodged its appeal relating to VAT paid on its ‘Spot the Ball’ game for the period from 1979 to 1996 which could involve repayment of tax worth £40m, rising to around £80m with simple interest applied.
Sportech said today it has now been informed by the First Tier Tax Tribunal that it is likely to be notified of the tribunal’s decision next month, rather than the end of January as previously expected.
In the meantime, the company published a trading update for the year to December 31 today which revealed good performances from its US venues and racing operations and its football pools business.
It said this counteracted a “slightly disappointing” performance in its e-Gaming division, due to brand changes and system migrations which are being addressed.
Sportech said its balance sheet remains robust and “continues to benefit from strong cash flow generation”.
The results for the full year will be published on March 6.
Liverpool stockbroker Panmure Gordon reiterated its ‘buy’ stance on Sportech’s stock after today’s update.
Analysts Simon French and Lindsey Kerrigan said: “We leave our group forecasts unchanged at £26.4m EBITDA (earnings before interest, tax, depreciation and amortisation) for 2012 estimates.
“However, with a significant and growing proportion of Sportech’s earnings originating from the United States, we believe it should trade at least in line with the sector. We reiterate our Buy recommendation.”