LONDON (Alliance News) - Sportech PLC Thursday reported an increase in profit for the first half, after winning its case against UK tax authorities, but lamented the damage caused by foreign exchange to group revenue.
The company, which through its subsidiaries is engaged in football pools and associated games, posted pretax profit of GBP87.8 million up from GBP2.6 million a year earlier, following a receipt of GBP93.0 million from UK tax authority HMRC. The company won a case against HMRC after it was incorrectly charged VAT for its popular Spot the Ball game.
Revenue, however, dipped to GBP52.6 million from GBP54.4 million a year earlier, with a significant foreign exchange impact, while earnings before interest, taxation, depreciation and amortisation reduced to GBP12.0 million from GBP12.5 million.
At an operating level, the company said it experienced continued growth in its racing and digital business following heavy investment in technology and products over the last couple of years. Nonetheless, revenue for the division fell to GBP16.9 million from GBP17.5 million a year earlier, significantly impacted by foreign exchange.
Sportech Venues revenue also fell to GBP16.9 million from GBP17.5 million. In the US state of Connecticut, Sportech Venues operates all betting on horseracing under an exclusive and in-perpetuity licence for retail, telephone and internet.
The company said the division was impacted by severe weather at the start of the year which closed many of its venues on certain days and impacted the racing programme in the US northeast. During the period there were 280 race cancellations compared with 81 a year earlier.
Football Pools revenue dipped to GBP19.3 million from GBP20.0 million a year earlier, reflecting a stabilisation of Direct revenues at GBP13.4 million - unchanged from the previous period.
Financially, Sportech said its refinanced its debt facility in May and now has an GBP80 million revolving credit facility until August 2018, representing an increased facility on improved terms.
Sportech shares were quoted down 7.1% at 79.00 pence Thursday morning.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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