Sportech, the international betting technology business, has warned that adjusted earnings will come in lower than anticipated by as much as five to 10 per cent. The statement was issued by way of a trading update in respect of its performance in the current financial year ending 31 December 2018.
The group, which has cited a delay in securing certain sales contracts, told investors: “Following the reduction in group size as a result of the sale of assets and subsequent shareholder distributions in 2017, key sales contracts now have a more significant impact on group performance indicators.
“The group now anticipates that certain expected sales contracts are unlikely to be secured in 2018 and therefore forecast adjusted EBITDA, excluding sports betting investments, for 2018 will likely be 5% to 10% lower than the current market expectation of £8.5m. The latest forecast, however, would represent year-on-year adjusted EBITDA growth of between 14% to 20%.”
Highlighting US sports betting activities, Sportech stated: “The repeal of the Professional and Amateur Sports Protection Act of 1992, (PASPA), in the United States in May confirmed the group’s focus on expanding initiatives within the US. The group continues to work proactively with existing B2B clients across the US and with the state of Connecticut to extend the group’s existing pari-mutuel license to conduct sports betting as a licensed ‘direct to consumer’ operator. The decision by the State is anticipated to be in 2019, when the legislative session resumes.”
Andrew Gaughan, CEO, said: “Whilst we are disappointed not to have secured some international sales contracts by the year end, we continue to focus on signing these contracts. We are working proactively with Connecticut and other states in the US to secure the rights to conduct sports betting as a licensed operator and we expect that sports betting revenues will commence in the second half of 2019.”