Sportech Eyes Acquisition as 2009 Growth Slows19th November 2009 10:04 am GMT
As the company pursues a significant acquisition which it believes will generate long-term value for its shareholders, Sportech plc said Thursday that it expects trading to be ahead of last year, although at a lower than expected growth rate, despite the impact of challenging economic trading conditions on the company.
Sportech said it continues to build upon the strategic initiatives put in place to develop the New Football Pools business, maintaining its commitment to invest in new products, improve its technological capabilities and expand distribution.
As the integration of Vernons nears completion, the company said that trading in the New Football Pools for the period July 1st to November 18th had been resilient in the traditional direct to home customer market, which now accounts for more than 70% of its weekly classic pools customer base.
Gross win for the company's core classic pools business is at similar levels to last year, generating significant cash enabling debt levels to be further reduced.
The online segment has registered its best performance to date in terms of new customer sign-ups, with current active players since the start of the football season more than 40% ahead of the same period last year, reflecting the company's continued investment in its Footballpools.com platform.
Despite the increase in active customers, trading has been slower than anticipated. Sportech said however that it was confident this was only a "temporary scenario", with increased customer numbers and revenue generation expected as the company broadens distribution channels for its products.
Sportech said that progress in securing new distribution routes, both via new retail and online markets, has been slower than expected, although the company has recently concluded arrangements with the state-owned Tote Tasmania, with a number of its products to be made available to customers in 2010.
The financial performance of Sportech's online gaming division is expected to be ahead of last year, with investments in the partnerships with both 888 and GTECH G2 essential to the company's medium-term objectives and potential of the business.
Seeking growth opportunities in overseas markets, Sportech confirmed that it is currently pursuing a significant acquisition, which if successful, would generate significant long-term value for its shareholders.
As at November 18th the company had banking facilities of £99.75 million and net debt of £81.5 million.
Shares in Sportech plc (Co. Profile) (LSE:SPO) have gained 6.95% to 60.25 pence per share in London this morning following the announcement.