Sportech up for sale despite year-on-year growth

Sportech up for sale despite year-on-year growth

Friday, October 20, 2017 Posted by Michael Lawson
The move comes after the resignations of Ian Penrose and Mickey Kalifa

Betting systems provider Sportech Plc has announced its entire corporate enterprise is up for sale with immediate effect.

The decision was publicised through yesterday’s governance statement, with the London-listed company citing its desire to “optimise value for the benefit of shareholders” as the primary reason for the measure.

The statement read: “Having completed the initial stages of the Strategic Review, the Board of Sportech has decided to seek offers for the Company, and has appointed Canaccord Genuity Limited ("Canaccord Genuity") as its financial adviser for this process. 

“The Company will continue to consider all options to maximise value for shareholders as part of its Strategic Review of the business and the capital structure.”

The news comes in the aftermath of September’s double resignation of Ian Penrose and Mickey Kalifa, Sportech’s Chief Executive and Chief Finance Officer.

The duo were praised for their contributions to the firm’s turnaround, having been key stakeholders in pursuing a £97 million tax rebate against UK HMRC and instrumental in the sale of legacy asset the Football Pools for £83 million back in May.

Despite it being put up for sale, Sportech is a company that has enjoyed considerable growth over the past couple of years, most notably with its “Sportech Racing & Digital” services that have aimed to penetrate US markets.  

2017’s H1 interim statement showed a company with a 5% revenue increase from the previous year (£36.4 million up from £34.7 million), and an increased pre-tax profit.

Richard McGuire, Non-Executive Chairman of Sportech, commented: “We announced last month a comprehensive strategic review to assess options to enhance shareholder value.

“Further to this investigation, we have today launched this formal sales process. 

“Whilst we note there is no certainty that an offer, or suitable offer, will be forthcoming, our confidence in our businesses, in our growth opportunities and in our dedicated professional colleagues means that a potential sale is only one of the strategic options open to the Company.”

Totally Gaming says: The decision by Sportech’s executives to put the entire corporate enterprise up for sale may have come as a shock for some. The company has witnessed notable growth over the past few years, and the latest H1 interim statement further illustrates this. September’s double resignation of Ian Penrose and Mickey Kalifa has undoubtedly influenced the decision, but it’s clear that any potential suitors mulling over a takeover will be inheriting a company in a remarkably strong position.

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