Sportech Share Discussion Threads

[nod] 13/11/2015 02:42

Cash windfalls could shape the future of gaming group Sportech06:06, 12 NOV 2015Despite fending off a bid from Canada's Contagious Gaming last week, the future shape of Walton-based Sportech remains uncertain.That's because the betting business has received more than one approach from other businesses about acquiring its traditional football pools operations.Formed over recent decades by the merger of old brands like Littlewoods Pools, Vernons and Zetters, and now trading as The Football Pools, this division has been in long-term decline, a process that accelerated with the introduction of the National Lottery in 1994. At its peak, 10m customers a week bet on the pools but that figure has dwindled to 360,000. The potential of The Football Pools division to improve its contribution to Sportech's overall profitability appears limited. It is possible Sportech would be happy to dispose of its pools business, allowing it to concentrate capital and management efforts on developing its technology for trackside and other betting operations in the US, where it employs in excess of 800 staff. In contrast, Sportech has 150 members of staff at Walton.Earlier this year, Sportech sold its 50% stake in a recently formed joint venture, known as NYX, in the American state of New Jersey that provided gaming services to casinos for £12m, a move that produced an £8m profit.One City investment analyst predicts the sale of the pools business could be worth up to £100m. Another chunky cash windfall could result from a successful outcome to the firm's dispute with HM Customs & Excise. Sportech is claiming £97m rebate for what it says is overpaid VAT. The case is set to be heard in the Court of Appeal at a yet to be confirmed date. The receipt of either of these sums would more than wipe out Sportech's £60m of debt.Nick Batram, an investment analyst with Peel Hunt, forecasts that Sportech's pre-tax profit for the current year will be £11.3m, down from £12m last year.In a note published this week, Mr Hunt writes: "Although the Contagious talks have ended, we believe that the group is moving closer to the event or events that will realise some of the inherent value within the business."Both the VAT and Football Pools scenarios would see the group balance sheet transformed. A disposal of the Football Pools would also see Sportech become a focused and predominantly regulated US business. Net debt has reduced by c£3m since H1 (with the receipt of the NYX proceeds) meaning the group is not a forced seller of the pools business. We have trimmed our fair value to reflect developments in Connecticut, but the potential to benefit from an expansion in regulated gaming still remains a real prospect. A recovery in the share price is unlikely to occur until either one of the catalysts is achieved or management can demonstrate the business has stabilised. However, given the scale of the potential upside and the low rating we believe the shares remain a long-term Buy."Sportech makes two-thirds of its revenue in the US. Chief executive Ian Penrose told the Liverpool ECHO: "Despite the interest from Contagious we continue to run our business and develop it going forward. We have to carry on with business as normal until something happens that changes that direction."Sportech has developed technology that processes half of all trackside horse racing and greyhound betting in the US and the group offers similar services to BetFred's tote in Britain and similar trackside betting services in other countries.Sportech also owns a string of bars and restaurants in Connecticut, known as Winners, which offer betting facilities to diners. A similar chain of betting and dining venues is being rolled out in California under a new brand name, Striders

[trentendboy] 08/11/2015 09:59

Indeed, bidder for part of the business. Would be a good fit for someone like Bet365 or betting company that takes a lot of football bets

[nod] 07/11/2015 05:06

Maybe it did flush out other bidders"The Board has recently received more than one preliminary proposal in respect of The Football Pools and will be reviewing the terms of these proposals in due course. A further announcement will be made if appropriate."

[trentendboy] 06/11/2015 22:08

Not surprising but a shame it did not flush out another bidder.

Something is clearing going off though

[finkie] 06/11/2015 20:44

Today's news expected might be opportunity to get in at an attractive level need clarity on appeal court hearing delay is unfortunate

[pugugly] 03/11/2015 11:04

First time I have ever come across this reason for a delay !!

"Sportech has been advised that the hearing of its appeal to the Court of Appeal, in relation to the GBP97m VAT repayment claim on the "Spot the Ball" game, due to be heard this week, has been delayed due to a lack of judicial availability.

The Court of Appeal will now schedule a new hearing date and the Group will provide shareholders with an update accordingly. "

[nod] 02/11/2015 19:25

Contagious Gaming offer deadline is 5pm Friday. They obviously don't have the funds to pay 65p. The Contagious offer is possibly an opportunist attempt to pick up SPO on the cheap after the Court of Appeal decision. A 'loss' could see the share price fall to 45p again. The decision may be in 2016 now.

[utterly pointless] 02/11/2015 10:29

The Court of Appeal are usually pretty quick - a month from the hearing date might be a good guess - but the hearing date has been delayed (see new RNS)...

[dontrader] 02/11/2015 10:26

VAT Appeal is due to be heard this week. Company estimate hearing will take 1 to 1 1/2 days. Anyone with knowledge care to speculate when the result will be known?

[gail rowbotham] 27/10/2015 14:33

Penrose and Hemmings are, "losers". They will also lose out on the VAT payment of £70m.

[utterly pointless] 23/10/2015 08:39

Interesting thought. But unlikely to be right. The share price was ~70p for a number of months before the Contagious bid.

[brownie69] 23/10/2015 07:49

I think the Contagious deal will fall over next week. after all they are a tiddler and must be struggling to raise the cash.
So what happens to SPO then? I reckon any bid premium will drop out of the share price so could be heading to 40p?

[finkie] 20/10/2015 10:20

fund with over 6% today announced they have purchased another 65000 shares. small trade but at least they are adding ahead of announcement.....I think trades will increase now as we get closer to d day.

[finkie] 14/10/2015 11:09

I would like to have seen a few trades appearing though soon as people take their positions ahead of d day maybe the traders feel there is no need until closer to the end of the month.....

[finkie] 14/10/2015 11:08

Trent I would think 30% downside if they lose to 42p and 30% upside if they win 78p.

Its a punt but if they lose they aren't bust and finished its a setback, so overall I have topped up at 57-59p in the last couple of weeks.

[trentendboy] 14/10/2015 10:30

Makes sense to have it post-date. Glad they have done that as the price will be very different with or without the "win".

Cannot see much downside from losing (but there will be some) and plenty of upside.

Be brave to take a position on this now

[somerset lad] 14/10/2015 08:42

I still think the Contagious interest will come to nothing, but if it does, the twice extended PUSU deadline of 6 November is now after the date for the Court of Appeal hearing of 3 November.

I trust the SPO board will not allow Contagious to see how the Court hearing goes and, if it goes well, make an offer involving payment of half the proceeds from the appeal to shareholders: if SPO looks like it's probably won, we should get much more than half.

[finkie] 14/10/2015 07:33

Utterly pointless thanks for clarifying been a while since I have looked at which court but we agree that litigation 'should' go sportechs way they have to be favourties as they won the case only for HMRC to appeal and to win an appeal you only have to say we have new evidence that says the blackboard is grey....!

Then the judge grants a third hearing but for HMRC its a shot to nothing as they had lost already; so any judge has to go against his colleagues initial view which I find highly unlikely. This should rise nicely on the back of the win and cash back in the bank......remember they have been paid it once already!! What a waste of our money for HMRC to continue fighting this.

[utterly pointless] 13/10/2015 10:05

Finkie, actually it is the court of appeal. And for what it's worth I have bought in solely because I think the litigation will go sportech's way.

[stephan1946] 13/10/2015 09:12

I sincerely hope you get rewarded Finkie.

[finkie] 13/10/2015 09:10

not the court of appeal but you understand my view!

[finkie] 13/10/2015 09:10

All spo are doing is ensuring the court decision is known prior to entering into any negotiations the sums involved are too big not to.

I have bought more today as the decision is imminent and I am banking on the court of appeal doing the right thing and overturning the appeal.

[stephan1946] 10/10/2015 09:16

I said it years ago, smoke and mirrors, that Sportech is just, smoke and mirrors.

SELL, and quickly.

Any investor doubting me should, for their own sake, research Arena Leisure.

[stephan1946] 10/10/2015 09:12

Finkie, I know penrose and hemmings personally, a doom monger? Time will tell and this latest announcement must fill you with GLEE?