The betting technology group, Sportech, has announced proposals to delist and re-register as a private limited company following a review of its listing on the London Alternative Investment Market (AIM). The review revealed the significant financial and non-financial burdens associated with maintaining its public listing, given the scale of the group’s business. Sportech’s revenue for 2022 was just £26.0m, following a downsizing program that included the sale of Global Tote. The board has concluded that cancellation and re-registration would be in the best interests of the company and its shareholders.
The shareholders will have to vote on the plan, with a minimum approval of 75% of the votes cast required. Currently, Sportech’s share price stands at 52.00p, a drop of over 45% compared to Friday.
Executive Chairman Richard McGuire explained the decision to delist in the group’s trading update for H1 2023. While Sportech saw a 7.2% increase in gross profit and an improved adjusted EBITDA performance during this period, the substantial financial costs associated with maintaining a public listing and market volatility have negatively impacted net returns and future prospects.
In the six months to June 30, 2023, Sportech reported revenue of £13.5m, remaining flat compared to H1 2022 on a constant currency basis. However, it showed positive momentum with a 7.2% increase in gross profit and an improved adjusted EBITDA performance, reaching £900,000 compared to £400,000 in H1 2022. The company posted a loss before tax from continuing operations of £300,000, an improvement compared to the previous year’s reported loss of £800,000. Sportech undertook a share capital restructuring and provided smaller shareholders with a cost-effective exit. It also distributed a total of £3.5m in shareholder repayments in August 2023, bringing the cumulative repayments to approximately £46m over the past two years. Group cash stood at £7.8m at the end of H1 2023 and £3.6m at the end of August 2023.
