According to the stated results from 2020, the revenue in the finance sector experienced a significant increase of 59.5%. The majority of this revenue, amounting to £11.5m, was generated through venues, representing a notable increase of 69.5% compared to the first half of 2020. Lotteries contributed the remaining £1.9m, reflecting a substantial rise of 75.0%. Unfortunately, figures were not provided for corporate costs, sports betting investment, or exchange rate impact.
When analyzing the financial performance of Sportech, it is important to note that their cost of sales reached £6.3m, resulting in a gross profit of £7.0m. This demonstrates a significant year-on-year increase of 77.3%. However, marketing and distribution costs totaling £227,000, reduced the total to £6.8m. On a positive note, the business also earned £2.5m in other income. After deducting operating costs of £8.2m, the operating profit amounted to £1.1m. This represents a remarkable improvement compared to the £8.3m loss incurred in the first half of 2020.
The operating costs mainly consisted of staff expenses which reached £3.3m. Professional fees and licenses amounted to £1.4m, while property costs were the third highest at £1.4m. The remaining costs comprised IT, travel and entertainment expenses, bank transactions, and other miscellaneous expenses.
Finance income of £230,000 offset the finance costs of £154,000, resulting in a total profit before taxation of £1.2m. After taxation of £608,000, the profit from continuing operations for the first half of the year was £632,000. This represents a significant increase of £9.5m compared to the £8.9m loss in 2020.
In addition to the profit from continuing operations, Sportech also highlighted a profit after tax for discontinued operations of £23.3m. This brings the total net profit for the period to £23.9m, marking a substantial year-on-year increase of £34.6m.
The discontinued operations refer to the sale of Sportech’s Global Tote business to BetMakers for £30.9m, which was approved by the majority of Sportech stakeholders. Additionally, the acquisition of Bump 50:50 by Canadian Banknote for £5.7m also falls under discontinued operations. The Global Tote acquisition generated £18.6m in net cash disposed of and disposal costs, while Bump 50:50 contributed £4.7m.
It is worth mentioning that these results come after Sportech rejected a proposed general takeover by Standard General, which valued the business at £53.8m. As part of a planned reduction in scale following the disposal of the Global Tote business and Bump 50:50, Sportech’s chief executive Richard McGuire and chief financial officer Tom Hearne announced their departure from the company.
