Sportech, the London-listed technology firm that partners with the Connecticut Lottery to provide retail sports betting, has announced its intentions to delist and return to being a private company.
The firm’s management acknowledged that, owing to the reduced size of the company following the sale of major lottery contracts and the increasing costs of operating as a listed entity, it is “in the best interest of the company and its shareholders” to pursue a delisting process.
A statement explained that being listed on the AIM is putting a “significant financial burden” on the company and that to proceed with the best possible outlook for future activities, Sportech will seek shareholder approval for the motion.
To proceed with delisting, Sportech requires at least 75% shareholder approval and the firm expects to send out a proposal in the second half of this month.
Richard McGuire, Executive Chairman of Sportech, said: “Despite delivering improving operational results announced today, the substantial financial cost associated with maintaining a public listing, given our current scale, and the increasing volatility in the market valuation is adversely impacting net returns and future prospects.
“Regrettably, in light of these circumstances, we find it necessary to take the difficult but pragmatic step of proposing delisting from the AIM market today.”
Sportech made this announcement as it published its results for H1 of 2023, in which it declared total revenues of £13.5m, up from £12.6m reported in H1 of 2022.
The group also reported a rise in profits, with gross profit increasing up around 8% to £7.4m. Meanwhile, EBITDA trebled in value to £0.9m in H1 2023, compared to £0.3m in H12022.
In Connecticut, Sportech handled $101.8m during the period, marking a 2.2% uptick year-over-year. Despite the opening of the Massachusetts market, Sportech still posted increases in revenue and gross profit in the Constitution State, jumping 10.6% and 39.5% respectively.
The group reported: “Sportech Venues’ performance in H1 2023 demonstrates resilience and growth potential. The company’s focus on sports betting, despite its inherent risks, has yielded support to date, offsetting the higher cost of operating a physical retail business.
“As the gaming landscape in Connecticut evolves with changes in sportsbook providers and competitive pressures, the Group remains committed to managing relationships and optimizing its operational and financial performance.”
Moving forward, Sportech will look to delist from the AIM and has already canceled the admission of its 10p ordinary shares in preparation for this move. Shareholders will vote on the issue at the next General Meeting.