Sportech prepares for US expansion as H1 revenues hold steady
Operator is “well placed to deliver potentially transformational growth from US sports betting”, according to Regulus Partners
Sportech has reported a 1.3%cc rise in like-for-like revenues to £31.6m in H1, with the firm overseeing a quieter period as it prepares for US sports betting.
Adjusted EBITDA dipped 2.9% to £3.3m, with the business split into three segments; sports bar venues in Connecticut, a B2B racing pools service, and B2B US sports charity raffle.
“Our Racing and Digital business maintained consistent levels of service revenues for H1 2018 versus the prior year,” said group CEO Andrew Gaughan.
“We continue to assess further operational efficiencies to maintain profit levels in the business. We also believe the market outside of North America is moving to more service-based contracts versus one-time sales contracts and are positioning our teams accordingly.
During the period, Sportech signed a sports betting provision deal with Sportradar.
“In Connecticut, we believe that we will have strong direct-to-consumer sports betting offering for our brick-and-mortar and web/mobile betting services,” said Sportech.
“We also believe that we are very well positioned to offer a competitive integrated sports and race betting solution in other US states.”
Regulus Partners described the results as “solid if unexciting” but said the Connecticut opportunity could be significant should it develop, although recent chatter suggests it may not.
The analyst said Sportech’s racing and lottery networks also gave the firms “wagering infrastructure access to key stakeholders in the evolving landscape”.
“We see Sportech as one of the few businesses that is small enough, bespoke enough and sufficiently well placed to deliver potentially transformational growth from US sports betting at a group level (where even a c. £30m opportunity would add c. 50% to revenue and likely c. double EBITDA),” Regulus added.