Sportech, a betting technology company, has released its financial statements for the 12-month period ending December 31, 2020, a year marked by the effects of Covid and difficult innovations in Connecticut.
Investors were updated on the company’s earnings, which plummeted 41 percent to $27.6 million due to COVID-19 trade limits, although adjusted EBITDA reported a loss of $3.2 million (2019: $2.2 million profit). Sportech posted an adjusted loss before tax of $7.2 million (2019: $2.8 million), despite management’s efforts to reduce COVID-19’s effect. For the year, the statutory deficit was $17.7 million (2019: $20 million).
Global Tote company
Sportech has completed negotiations to sell its Global Tote company in a planned deal to BetMakers Technology Group Ltd, to shed Bump 50:50, and to sell a freehold property in New Haven, Connecticut, both of which have been affected by Covid. These sales are expected to collect $49.8 million in net cash until completed.
Concerning the case in Connecticut, where the firm seems to have been left out in the cold when it comes to potential sports betting legalisation, the company said it is in touch with the governor’s office. Statements that seek to deny Sportech equal access to a Connecticut State Sports Betting licence have sparked the debate. According to the firm, legal advice have been requested and given to the Connecticut Administration.
‘Unprecedented challenging conditions’
Sportech’s CEO, Richard McGuire, stated: “COVID-19 created unprecedented challenging conditions for our businesses and the industries we serve. We continue to take the necessary actions to safeguard the group and to progress our strategic agenda.
“In line with this, the group took steps to generate tangible investor returns by exiting certain businesses and assets, advancing the sale of the Racing and Digital division’s Global Tote business to BetMakers, the sale of the Bump 50:50 raffle business to Canadian Bank Note, and the disposal of a freehold property in Connecticut.
“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.
“I am encouraged by the resilience shown by the business in facing the challenges of 2020. My gratitude goes to those dedicated professionals who will be transferring to new owners in 2021 and my thoughts remain with the families of those colleagues we lost to this pandemic.”