Sportech emerges leaner, fitter and poised for growth according to latest interims

Image source: Sportech

Betting technology and retail gaming operator Sportech has announced its interim results for the six months ended June 30 2021. 

The firm recorded total H1 revenue of $18.527m versus $11.543m year-on-year during a trading period that saw it confirm the disposals of the Global Tote business to BetMakers Technology; the sale of Bump 50:50 to Canadian Banknote and the sale of a freehold property in New Haven, Connecticut. 

Those disposals, it said, supported a resulting stronger balance sheet, with shareholder equity increasing by $32.1m to $66.8m, including a cash position excluding customer cash of $66.7m at the end of the period. 

COVID related challenges persist within the group’s retail food and beverage operations in Connecticut, however wagering handle increased significantly versus the challenged 2020 period and in aggregate only declined 1.2% versus the 2019 comparable period. 

Online wagering handle which recorded solid gains through 2020 continued during the period +16% versus 2020 and +45% versus the 2019 comparable period. 

Outgoing CEO Richard McGuire told investors: “The first half of 2021 marked a notably successful period of restructuring as Sportech completed business disposals, secured the move to the AIM market and built further on the online revenue gains from 2020. 

“In recent weeks we also secured shareholder support for a proposed capital reduction and a significant capital return to shareholders and were delighted to announce a 10-year business relationship with the Connecticut Lottery Corporation to support their sports betting initiative.” 

On the handover to new CEO and CFO Andrew Lindley and Nicola Rowlands, McGuire stated that they know the business and its markets well, adding: “The business is in a strong position and it has been my privilege to work with so many dedicated professionals, business partners and supportive shareholders and I know the future of Sportech is in extremely capable hands.” 

In Sportech’s Venues business, COVID related travel and hospitality restrictions within retail outlets continue to challenge food and beverage contribution. However, wagering handle increased significantly in H1 2021, up by 87.2% to $15.854m versus $9.350m year-on-year, whilst a more appropriate comparison against 2019 showed a modest decline of 1.2%. 

Online handle, meanwhile, continued to build on the growth of last year with H1 2021 ahead by 15.6% versus H1 2020 and +44.8% versus the comparable period in 2019. The group continues to develop its online pari-mutuel betting presence with a rebranded to support new customer acquisition campaigns in Connecticut, delivering growth opportunities. 

Sportech confirmed in August 2021 that it had agreed a 10-year commercial arrangement with the Connecticut Lottery Corporation, in conjunction with CLC’s sports book provider Rush Street Interactive, to deliver sports betting across its retail estate and promote CLC’s online and mobile channels.

Talking more about the partnership, new CEO Lindley stated: “That’s hopefully going to be a great deal, and we have got a very good relationship with the Connecticut Lottery. We hope that there’s going to be some additional venues – potentially – which the Lottery brings to the party. We’ve got 10 of our own and the Lottery has got 15 licenses, and there’s potential for more in that.

“It’s not guaranteed that we’ll be included in that, but I like to think that our relationship with the Lottery will make that so. And there’s also the opportunity for us to keep growing the online for parimutuel and take some benefits out of the extra footfall in shops from the sports betting fans and them playing the parimutuel products.”

He added: “We have quite a big chain, albeit only 10, of sports bars and shops. Which gives us quite a nice platform – an unusual platform in America – in terms of experience and ongoing operations, in as much as if there’s terrestrial business to be done our door is a natural one to knock on.”