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NEWS 22 August 2018

Sportech “well positioned in US” as profits stagnate

By Harrison Sayers

Sportech has seen its profits stagnate as the company looks to expand in the US.

The London-based online gambling company’s revenue totalled £31.6m ($40.7m) during H1 2018, compared to £33.5m generated in the same period a year prior.

However, this disparity was mainly down to the negative impact of currency fluctuations. When evaluating constant currency, revenues increased, albeit by just £400,000.

Both gross profit and EBITDA were similarly affected by currency evaluations.

EBITDA before sports betting stands at £3.3m for H1 2018, compared to £3.4m in constant currency and £3.6m in reported currency during 2017

Gross profit reached £21.9m in H1 2018, a slight increase from £21.8m in constant currency year-over-year and a decrease £23.2m in reported currency.

It must be noted that all of these figures do not include the £2.5m that the company received from the sale of its Sportech Racing BV brand, as its sale came after the H1 period ended.

Andrew Gaughan, CEO of Sportech believes that the US will present many opportunities for future growth, following the US Supreme Court’s decision to repeal of PASPA.

The company proved its intent in the US sports betting market through an agreement with sports data specialists Sportradar soon after the decision.

Gaughan said: “In Connecticut, we believe that we will have a strong direct-to-consumer sports betting offering for our brick-and-mortar and web/mobile betting services.  We also believe that we are very well positioned to offer a competitive integrated sports and race betting solution in other US states.”

Currently, the company’s Stamford, Connecticut Bobby V's Restaurant & Sports Bar has been growing “slower than originally forecast”. Although two new “highly-experienced” managers are expected to positively impact next year’s results.

The report also drew attention to the company’s racing and digital business, which managed to maintain “consistent” revenues for H1 2018, as it adjusts to markets outside of North America switching to service-based contracts.

RELATED TAGS: Online | Financial | Sports Betting
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