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Sportech Plc has delivered a better-than-expected financial result in 2020, counteracting the COVID-19 headwinds that have had a major impact on global horseracing competitions and fixtures.
The LSE-listed wagering and racing systems supplier announced a 41 percentage decrease in company sales to £20 million in its full-year 2020 results, compared to £34 million in the previous year.
In its performance break-down, Sportech revealed: “COVID-19 severely impacted the business resulting in a 28 percent decline in total retail betting handle versus 2019, mitigated to an extent by a 72 percent growth in online handle.”
Group-wide efficiency campaign
To combat COVID-19 threats in 2020, Sportech implemented a group-wide efficiency campaign, concentrating the organisation on expanding its cash efficient divisions, resulting in a cash balance of £17 million (FY2019: £13 million).
Sportech also stated that it met its strategic objectives, such as selling its Global Tote Business to BetMakers and the Canadian Banknote Company’s Bump 50:50 in-stadium wagering schemes.
Sportech expects to receive a £36 million cash contribution from its sales, which include the sale of its freehold land in New Haven (Connecticut).
Sportech posted a better-than-expected adjusted EBITDA loss of £2.3 million (FY2019: +£1.9 million) in its FY2020 accounts.
Sportech announced a statutory loss of £12.8 million for the year (2019: £14.5 million) despite absorbing losses from its suspended activities.
Evaluating further investment prospects
Sportech CEO Richard McGuire said: “Despite the challenging global environment, our performance in 2020 was better than initially forecast in March 2020, with Sportech delivering on key 2020 performance metrics, namely cash generation from operational activities, effective capex management, and delivery of a more efficient lower operational cost base going forward, resulting in only a modest cash outflow since the outbreak of COVID-19.
“We continue to evaluate further investment prospects within the Connecticut Venues business to support potential expanded gaming opportunities. Management and personnel in our US headquarters in Connecticut remain fully motivated to be part of that state’s expanded gaming solution.”