Sportech’s CEO Richard McGuire has stated the betting firm performed ‘better than initially forecast’ in its 2020 financial report and that he’s ‘encouraged by the resilience shown’ by the company.
Sportech has published its financial results for the 12-month trading period ended December 31, 2020, a year marked by the impacts of Covid and challenging developments in the state of Connecticut.
Updating investors, the company stated that revenues fell 41% to £20.0m due to COVID-19 restrictions on trading, while adjusted EBITDA showed a loss of £2.3m (2019: profit of £1.6m). While management has taken action to mitigate the COVID-19 impact, it reported that adjusted loss before tax had increased to £5.2m (2019: £2.0m). Statutory loss for the year was £12.8m (2019: £14.5m).
McGuire said: “COVID-19 created unprecedented challenging conditions for our businesses and the industries we serve. We continue to take the necessary actions to safeguard the group and to progress our strategic agenda.
“In line with this, the group took steps to generate tangible investor returns by exiting certain businesses and assets, advancing the sale of the Racing and Digital division’s Global Tote business to BetMakers, the sale of the Bump 50:50 raffle business to Canadian Bank Note, and the disposal of a freehold property in Connecticut.
“Despite the challenging global environment, our performance in 2020 was better than initially forecast in March 2020, with Sportech delivering on key 2020 performance metrics, namely cash generation from operational activities, effective capex management, and delivery of a more efficient lower operational cost base going forward, resulting in only a modest cash outflow since the outbreak of COVID-19.”
The Covid-impacted figures come in a year that has seen Sportech execute agreements to sell its Global Tote business with the proposed transaction to BetMakers Technology Group Ltd; shed Bump 50:50; and dispose of a freehold property in New Haven, Connecticut. Once completed, those transactions are estimated to raise net cash of £36.1m.
As for Connecticut, where the company looks to have been left out in the cold concerning the proposed legalisation of sports betting, it said it is engaging with the Governor’s office. The discussions follow statements that appear to deny Sportech equal rights to a Connecticut State Sports Betting license. Legal opinions have been sought, said the company, and provided to the Connecticut Administration.
McGuire continued: “We continue to evaluate further investment prospects within the Connecticut Venues business to support potential expanded gaming opportunities. Management and personnel in our US headquarters in Connecticut remain fully motivated to be part of that state’s expanded gaming solution.
“I am encouraged by the resilience shown by the business in facing the challenges of 2020. My gratitude goes to those dedicated professionals who will be transferring to new owners in 2021 and my thoughts remain with the families of those colleagues we lost to this pandemic.”