International betting technology business Sportech, has issued a trading update in respect of the current financial year ending December 31, 2019, citing continued operational efficiencies across all its business lines.
The firm, which operates under 35 licences across 37 US states and offers the BUMP 50:50 raffle in conjunction with the NHL, MLB, NFL,NBA and NCAA, anticipates that FY 2019 group adjusted EBITDA, excluding sports betting investments, will be ahead of expectations. Group revenue will be in line with the board’s expectations.
In the update, the firm said that positive decisions have been taken to restructure the business, exit certain non-profitable activities and streamline costs. This will impact the exceptional items cost line in FY 2019, as stated in the HY 2019 results, but deliver long term returns, it noted. In addition, the group has “determinedly focused” on reducing low-return capex projects, and as such FY 2019 capex is expected to reduce significantly versus FY 2018.
The Board added that a continued emphasis on challenging every aspect of the business to deliver a more appropriate operational cost base has helped offset the high fixed costs of its Venues business, which is being addressed with a variety of initiatives. Meanwhile, the group’s other business units, including Racing and Digital, Bump 50:50 and Lottery, are anticipated to demonstrate net contribution growth in FY 2019.
CEO Richard McGuire stated: “Sportech now has a management team in place to transform the business to drive growth and efficiencies. We have extricated the group from a number of historically expensive strategies, delivered an efficient and lower operational cost base, and we are now much more confident in the group’s ability to deliver significant value to our clients and shareholders.”
Sportech will be announcing its FY 2019 Final Results on March 19, 2020.
