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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Sportech Plc | LSE:SPO | London | Ordinary Share | GB00BRV2F192 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 84.00 | 82.00 | 86.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2021 to Apr 2024
TIDMSPO
RNS Number : 1837L
Sportech PLC
09 September 2021
9 September 2021
Sportech PLC
("Sportech" or the "Group" or the "Company")
Interim Results
Sportech (AIM:SPO), an international betting technology business and retail gaming operator, announces its interim results for the six months ended 30 June 2021 ("H1 2021" or the "period").
Summary
The Group continued to operate all business lines through most of the period before announcing the completion of the disposals of the Global Tote business to BetMakers Technology; the sale of Bump 50:50 to Canadian Banknote and the sale of a freehold property in New Haven, Connecticut in June 2021. Those disposals supported a resulting stronger balance sheet, with shareholder equity increasing by GBP23.3 million to GBP48.5 million (31 December 2020: GBP25.2 million), including an impressive cash position excluding customer cash of GBP48.6 million at the end of the period (31 December 2020: GBP16.8 million, which included GBP6.12 million deposit on a corporate sale and cash in disposal entities, and excluded customer cash balances).
Post the period end the Group announced and completed a move to AIM, an Exchange which is more suited to the Company's current size and strategy and, in August 2021, shareholders approved a proposed share capital reduction and a subsequent significant capital return to shareholders.
COVID related challenges persist within the Group's retail food and beverage operations in Connecticut, however wagering handle increased significantly versus the challenged 2020 period and in aggregate only declined 1.2% versus the 2019 comparable period. Online wagering handle which recorded solid gains through 2020 continued during the period +16% versus 2020 and +45% versus the 2019 comparable period.
The Lotteries unit delivered +75.1% revenue growth versus the challenged 2020 comparable period, unfortunately with domestic and international travel remaining difficult, this corresponded to 9% lower revenues than the H1 2019 period. However, in recent months revenues have returned to comparable 2019 levels. Post the period end, the Group announced discussions had commenced relating to a potential sale of a terrestrial lottery contract and will update the market in due course.
Hot Features
Premium
Versus
H1 2020 Constant Reported
constant Currency Currency(5)
GBPm's currency H1 2021 H1 2020 H1 2020
--------------------------------------- ---------- -------- ----------- --------------
Revenue +70.3% 13.4 7.9 8.4
Gross Profit +59.4% 7.1 4.4 4.0
Contribution(1) +62.6% 6.9 4.2 3.7
Adjusted EBITDA pre-Sports Betting
Investment(2) 0.5 (2.3) (2.4)
Adjusted EBITDA(3) 0.3 (2.4) (2.5)
Profit/(loss) pre-tax from continuing
operations 1.2 (9.2) (9.0)
Adjusted loss before tax(4) (0.7) (4.3) (4.1)
1. Contribution is defined as gross profit, less marketing and distribution costs.
2. Excludes Sports Betting Investment during the period, amounting to GBP0.2 million (2020: GBP0.1 million), see note 4.
3. Adjusted EBITDA is earnings from continuing operations before interest, taxation, depreciation and amortisation, share option charges, impairments and separately disclosed items as reported in note 1 of the Interim Financial Statements.
4. Adjusted loss is the aggregate of Adjusted EBITDA, share option charges, depreciation, amortisation (excluding amortisation of acquired intangibles) and certain finance charges.
5. Prior year comparatives have been adjusted for discontinued operations.
As the Group moves through the rest of the financial year, the corporate focus will be on completing the proposed share capital reduction and shareholder capital return; operationally executing the delivery of sports betting across Connecticut, as announced in August 2021, and escalating the Group's digital lottery opportunities.
In spite of current encouraging trading, the uncertainty on the timing of when Connecticut Sports Betting will commence plus the potential impact of any further lockdowns means the Board cannot give meaningful guidance on H2 2021 outlook, at this precise time. The Board remain confident in the quality of the Group's innovative products, management strategy and in the stability of the significantly stronger balance sheet to support future investment and growth.
During the period the Group delivered the following notable strategic achievements:
-- Completed key corporate transactions. -- Successfully managed discontinued operations to conclusion. -- Aligned business to focus on substantial growth opportunities. -- Significantly enhanced Group cash position and balance sheet. -- Initiated substantial capital return plan. -- Set out move to AIM market, completed in July. -- Progressed role in Connecticut expanded gaming.
-- Built on recent developments to deliver a less capital-intensive business going forward.
The business transformation continues with the following objectives:
-- Deliver significant capital return to investors.
-- Deliver a less capital-intensive business and significantly reduce future corporate cost base.
-- Develop and deliver meaningful returns from expanded opportunities in Connecticut. -- Execute further licensing opportunities within digital lottery. -- Evaluate and execute material corporate opportunities, delivering tangible investor returns .
Richard McGuire, Chief Executive Officer of Sportech, said : "The first half of 2021 marked a notably successful period of restructuring as Sportech completed business disposals, secured the move to the AIM market and built further on the online revenue gains from 2020. In recent weeks we also secured shareholder support for a proposed capital reduction and a significant capital return to shareholders and were delighted to announce a 10-year business relationship with the Connecticut Lottery Corporation to support their sports betting initiative."
"Shareholder funds during H1 almost doubled to GBP48.5 million, we have no debt and significant cash to deliver on our shareholder and investment commitments."
"In August, the Group also announced senior management changes and after several years of restructuring the business and pursuing a clear goal of realising shareholder value where possible, that objective now being mostly achieved, that our CFO Tom Hearne and I would hand over the leadership reins to the very experienced Andrew Lindley and Nicola Rowlands who know the business and its markets well. The business is in a strong position and it has been my privilege to work with so many dedicated professionals, business partners and supportive shareholders and I know the future of Sportech is in extremely capable hands."
For further information, please contact:
Sportech PLC enquiries@sportechplc.com
Giles Vardey, Chairman
Richard McGuire, Chief Executive Officer
Thomas Hearne, Chief Financial Officer
Peel Hunt Tel: +44 (0) 20 7418 8900
(Corporate Broker to Sportech)
George Sellar / Andrew Clark
Buchanan Tel: +44 (0) 20 7466 5000
(Financial PR adviser to Sportech)
Henry Harrison-Topham / Jamie Hooper / George Beale
Group Overview
The Group underwent significant restructuring during the period, completed the sale of operational divisions, strengthened its balance sheet and increased net cash for a potential combination of growth investment and investor returns. Recently the Group has moved its market listing to AIM, a market more appropriate for its scale and potential corporate transactions. In recent weeks shareholders approved a reduction of share capital and following certain required consents, a share buyback of approximately 47% of the outstanding shares in issue.
Group Overview
Revenue EBITDA
GBP'000 H1 2021 H1 2020(1) H1 2021 H1 2020(1)
Continuing operations
-------- ----------- -------- -----------
Venues 11,505 6,785 1,192 (1,135)
Lotteries 1,940 1,108 781 63
Corporate costs - - (1,516) (1,173)
-------- ----------- -------- -----------
13,445 7,893 457 (2,245)
Sports Betting Investment - - (191) (146)
-------- ----------- -------- -----------
Total at constant currency 13,445 7,893 266 (2,391)
Exchange rate impact - 484 - (146)
Total reported 13,445 8,377 266 (2,537)
-------- ----------- -------- -----------
1. 2020 numbers are at constant currency.
Discontinued Operations
The Group concluded the disposals of Global Tote, Bump 50:50 and a freehold property in Connecticut during the period and announced the completions on 18 June 2021.
Management continued to operate and oversee the operational business during the period as buyers sought the extensive regulatory gaming consents to complete. Although discontinued operations do not feature in certain financial metrics these business lines required continued management resource ensuring operational progress through the transition period.
These included key Global Tote business contract renewals and extensions preceding the completion of the sale to BetMakers Technology Group, including long-term extensions with Monmouth Park and Kentucky Downs.
Sustained momentum in the Bump 50:50 raffle business included new client acquisitions preceding the completion of the sale to Canadian Bank Note, including new contracts with the Miami Marlins and Arizona Diamondbacks, both Major League Baseball, MLB(R).
Sportech maintains a strong supportive business relationship with the acquirers of each business unit and wishes them continued success under their respective banners and our thanks to the hundreds of employees for their dedication and professionalism.
Sportech Lotteries
Sportech is a member of the World Lottery Association (WLA) and the North American Association of State and Provincial Lotteries (NASPL). The acquisition of the technology platforms and talent of Lot.to Systems and the integration of these assets into Sportech's organisation was completed in 2019, resulting in further expansion of the Group's B2B lottery capabilities with a key mobile component and robust administrative, CRM and marketing tools.
Continued COVID challenges impacted sales for several months in 2021, however sales have recovered in recent months against 2019 comparisons. Revenues increased 75.1% versus H1 2020 and reported EBITDA was GBP0.8 million (H1 2020: GBP0.1 million).
The team advanced digital lottery capabilities further and post the period engaged in discussions which may lead to a potential sale of a terrestrial lottery contract.
Core focus for the lottery team remains pursuing licensing opportunities drawing on the Sportech brand, legacy and digital expertise to deliver an enhanced consumer experience.
Constant Reported
Lotteries Currency Currency
GBP'000 H1 2021 H1 2020 H1 2020
-------- ---------- ----------
Service revenue 1,940 1,108 1,146
Contribution 1,342 441 451
Contribution margin 69.2% 39.8% 39.4%
Adjusted operating expenses(1) (561) (378) (371)
-------- ---------- ----------
Adjusted EBITDA 781 63 80
-------- ---------- ----------
Intangible assets capex 95 - -
Tangible assets capex 2 - -
-------- ---------- ----------
Total capex 97 - -
-------- ---------- ----------
1. Adjusted operating expenses exclude depreciation and amortisation, impairments and separately disclosed items as reported in note 1 of the Interim Financial Statements.
Sportech Venues
Sportech Venues operates eleven gaming venues, providing betting on horse racing, greyhound racing and jai alai in the State of Connecticut under an exclusive and in-perpetuity licence for retail, online, and telephone betting.
COVID related travel and hospitality restrictions within retail outlets continue to challenge food and beverage contribution, however wagering handle increased significantly versus 2020 (87.2%); whilst comparison against a more appropriate 2019 was a decline of 1.2%. Yet, online handle continued to build on the growth of last year, H1 2021 +15.6% versus H1 2020 and +44.8% versus comparable period in 2019. The Group continues to develop its online pari-mutuel betting presence with a rebranded MyWinners.com to support new customer acquisition campaigns in Connecticut, delivering growth opportunities.
Management addressed the global hospitality challenge, advancing the execution of estate planning, and a variety of strategic initiatives. The number of leased outlets were reduced from 12 to 10 including the sale and leaseback of one freehold asset completed during the period, realising net cash proceeds of GBP4.2 million. At the end of the period, the division operated 10 leasehold premises and one freehold premises in Connecticut, USA.
In May 2018, the US Supreme Court struck down the Professional and Amateur Sports Protection Act ("PASPA"), subsequently providing each US State with the option to introduce Sports Betting legislation. Since that time Sportech has been engaged in pursuing various opportunities and specifically a Sports Betting licence in Connecticut, where Sportech Venues Inc. has an exclusive pari-mutuel (tote) betting licence. In May 2021, the Connecticut General Assembly passed legislation to authorise sports betting in Connecticut. Governor Ned Lamont signed the Bill on 27 May 2021.
As previously announced, unfortunately Sportech was not awarded a Sports Betting licence. The Group considered two options: to legally challenge the decision or construct a mutually beneficial relationship with one of the three parties awarded a Sports Betting licence.
Sportech was delighted to announce in August 2021 a 10-year commercial arrangement with the Connecticut Lottery Corporation ("CLC") which, subject to required regulatory consents, provides Sportech Venues Inc., in conjunction with CLC's sports book provider Rush Street Interactive ("RSI"), an ability to deliver Sports Betting across its retail estate and promote CLC's online and mobile channels.
H1 2020 H1 2020
Venues Constant Reported
GBP'000 H1 2021 Currency Currency
-------- ---------- ----------
F&B 824 765 807
Wagering revenue 10,681 6,020 6,424
Total revenue 11,505 6,785 7,231
Contribution 5,506 3,347 3,244
Contribution margin 47.9% 49.3% 44.9%
Adjusted operating expenses(1) (4,314) (4,482) (4,510)
-------- ---------- ----------
Adjusted EBITDA 1,192 (1,135) (1,266)
-------- ---------- ----------
Total capex - 29 29
-------- ---------- ----------
1. Adjusted operating expenses exclude depreciation and amortisation and separately disclosed items as reported in note 1 of the Interim Financial Statements.
Corporate Costs
Corporate costs and Sports Betting Investment expenditure, together, increased by GBP0.4 million due to staff costs savings in 2020 during the peak of the COVID-19 pandemic when staff were furloughed/took voluntary reductions, which then reverted back to normal cost levels from H2 2020, as well as higher corporate insurance costs in 2021.
Depreciation and Amortisation
Capital expenditure and depreciation/amortisation is much reduced in the continuing group from that of the Group prior to the disposals. Depreciation and amortisation in the period reduced from GBP1.5 million to GBP0.9 million as a result of the impairments taken at the end of H1 2020. No further impairments were considered to be required at 30 June 2021.
Separately Disclosed Items
The Group incurred administration costs in continuing operations during the period of GBP0.5 million (H1 2020: GBP0.1 million) which are shown as separately disclosed items. H1 2021 items include redundancy payments and corporate activity, namely costs incurred for the Company to delist from the Main Market and list on AIM. The Company expects further costs will be incurred in H2 2021 as the business completes restructuring for 2022 which will be separately disclosed.
Net Finance Costs
The Group has no debt. The Group had a net finance income of GBP0.1 million (H1 2020: cost of GBP0.4 million), including GBP0.1 million (H1 2020: GBP0.2 million) interest accrued on potential tax liabilities payable, GBP0.1 million (H1 2020: GBP0.2 million) interest on lease liabilities and GBP0.2 million (H1 2020: GBP0.1 million loss) foreign exchange gain on financial assets and liabilities denominated in foreign currency.
Taxation
Taxation is provided based on management's best estimate of the expected weighted average annual taxation rate for the full year. The estimated weighted average annual tax rate for the year ended 31 December 2021 is 49.0% (2020: (0.9)%). The movement is a result of a change in mix of profits/(losses) in jurisdictions with varying tax rates and the non-recognition of deferred tax on losses in certain jurisdictions due to expectation of non-recovery.
The Group continues to hold a tax provision of GBP4.6 million (30 June 2020: GBP5.0 million, 31 December 2020: GBP4.6 million) for tax potentially due on the 2016 Spot the Ball refund (excluding interest). Further provisions are held totaling GBPnil (30 June 2020: GBP0.5 million, 31 December 2020: GBPnil) for other uncertain tax positions. The remaining current tax liability on the balance sheet is for estimated tax payable on profits generated in the six months to 30 June 2021.
Net Cash
The Group held cash balances of GBP48.6 million, excluding customer balances (31 December 2020: GBP16.8 million, including cash in assets held for sale).
A further amount of consideration was received in August 2021 from BetMakers Technology Group Limited for the settlement of estimated closing cash less debt like items of GBP2.6 million. The final settlement for net working capital is due to be agreed between parties in H2 2021.
Capital Expenditure
Capital expenditure investment in the period was GBP1.1 million (H1 2020: GBP1.3 million). GBP0.1 million (H1 2020: GBPnil) related to the continuing Group and the remainder was mainly staff costs capitalised or expenditure agreed to be reimbursed by the buyer of the operation. Capital expenditure will increase into H2 2021 and 2022 as venues are improved ready for Sports Betting to commence.
Shareholders' Funds
Shareholders' funds increased by GBP23.3 million from 31 December 2020 to GBP48.5 million (31 December 2020: GBP25.2 million) following the completion of the corporate disposals and the profit on disposal recognised therefrom.
Going Concern
After making reasonable enquiries and forecasting the Group's cash flows with reasonable downside assumptions applied, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the interim condensed consolidated financial statements. The Directors have not included in the downside model any assumption of a further local or more widespread "lockdown" as a result of COVID-19 cases or a new pandemic arising. Under this scenario the Directors will take all actions necessary (as evidenced in 2020) and make use of all government support available to ensure the Company and the Group continues in operational existence.
Outlook
Developing the sports betting opportunity in Connecticut with our partners, driving further growth opportunities and effective cost management remain priorities for management. Enhancing Group value remains the Board's key focus and the Group strategy is structured accordingly with regard to this central measure.
Timing around the commencement of Sports Betting in Connecticut is unclear at the time of writing, resulting in fluid financial forecasting. As timing becomes clearer, the Board will update the market accordingly.
Finally, following the restructuring of the Group, the move to AIM and the proposed significant return of capital to shareholders, the Group announced senior management changes in line with focus on reducing corporate overheads. The Board extends its sincere thanks to Richard McGuire and Tom Hearne for leading the Company in recent years and welcomes Andrew Lindley and Nicola Rowlands to their new positions as CEO and CFO respectively.
Interim consolidated income statement
For the six months ended 30 June 2021
Restated
Six months Six months Year
ended ended
30 June 30 June ended
2021 31 December
2020 2020
(Unaudited) (Unaudited) (Audited)
Note GBP000 GBP000 GBP000
----------------------------------- ----- --------------- -------------- --------------
Revenue 13,445 8,377 19,966
Cost of sales 6 (6,370) (4,387) (9,432)
----------------------------------- ----- --------------- -------------- --------------
Gross profit 7,075 3,990 10,534
Marketing and distribution costs 6 (227) (295) (319)
----------------------------------- ----- --------------- -------------- --------------
Contribution 6,848 3,695 10,215
Other income 20a 2,575 - -
Operating costs 6 (8,259) (12,278) (20,225)
Operating profit/(loss) 1,164 (8,583) (10,010)
Finance costs 8 (154) (429) (568)
Finance income 8 230 16 11
Profit/(loss) before taxation from
continuing
operations 1,240 (8,996) (10,567)
Taxation - continuing operations 9 (608) 77 297
----------------------------------- ----- --------------- -------------- --------------
Profit/(loss) for the period from
continuing
operations 632 (8,919) (10,270)
Profit/(loss) after taxation from
discontinued
operations 20f 23,331 (1,801) (2,562)
----------------------------------- ----- --------------- -------------- --------------
Profit/(loss) for the period 23,963 (10,720) (12,832)
----------------------------------- ----- --------------- -------------- --------------
Attributable to: Attributable to:
Owners of the Company 23,963 (10,720) (12,832)
----------------------------------- ----- --------------- -------------- --------------
Basic profit/(loss) per share
attributable to
owners of the Company
From continuing operations 10 0.3p (4.7)p (5.4)p
From discontinued operations 10 12.4p (1.0)p (1.4)p
----------------------------------- ----- --------------- -------------- --------------
Total 10 12.7p (5.7)p (6.8)p
----------------------------------- ----- --------------- -------------- --------------
Diluted profit/(loss) per share
attributable
to owners of the Company
From continuing operations 10 0.3p (4.7)p (5.4)p
From discontinued operations 10 12.4p (1.0)p (1.4)p
----------------------------------- ----- --------------- -------------- --------------
Total 10 12.7p (5.7)p (6.8)p
----------------------------------- ----- --------------- -------------- --------------
Adjusted loss per share
attributable to owners
of the Company
Basic 10 (0.3)p (2.3)p (2.2)p
Diluted 10 (0.3)p (2.3)p (2.2)p
----------------------------------- ----- --------------- -------------- --------------
See note 4 for a reconciliation of the above interim consolidated income statement to the adjusted performance measures used by the Board of Directors to assess divisional performance.
Prior period comparatives have been adjusted for discontinued activities.
Interim consolidated statement of comprehensive income
For the six months ended 30 June 2021
Six months Six months
ended ended
30 June 30 June
2021 2020 Year ended
31 December
2020
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
----------------------------------------------------- -------------- -------------- -------------
Profit/(loss) for the period 23,963 (10,720) (12,832)
----------------------------------------------------- -------------- -------------- -------------
Other comprehensive expense:
Items that will not be reclassified to profit and
loss
Actuarial loss on retirement benefit liability - - (344)
Deferred tax on movement on retirement benefit
liability - - 88
----------------------------------------------------- -------------- -------------- -------------
- - (256)
Items that may be subsequently reclassified to
profit and loss
Currency translation differences (892) 2,444 (77)
----------------------------------------------------- -------------- -------------- -------------
Total other comprehensive (expense)/income for
the period, net of tax (892) 2,444 (333)
----------------------------------------------------- -------------- -------------- -------------
Total comprehensive income/(expense) for the period 23,071 (8,276) (13,165)
----------------------------------------------------- -------------- -------------- -------------
Attributable to:
Owners of the Company 23,071 (8,276) (13,165) ----------------------------------------------------- -------------- -------------- -------------
Interim consolidated statement of changes in equity
For the six months ended 30 June 2021
Other reserves
--------------------------------------
Capital Foreign
Ordinary redemption Other exchange Retained
shares reserve reserve reserve earnings Total
Six months ended 30 June 2021 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------------- ----------- ------------- ---------- ----------- ----------- --------
At 1 January 2021 (audited) 37,750 10,312 (638) 6,865 (29,130) 25,159
Comprehensive income/(expense)
Profit for the period - - - - 23,963 23,963
Other comprehensive items
Transfer cumulative actuarial losses
to retained earnings - - 952 - (952) -
Currency translation differences - - - (892) - (892)
Currency translation differences
moved to retained earnings - - - (2,994) 2,994 -
Total other comprehensive items - - 952 (3,886) 2,042 (892)
--------------------------------------- ----------- ------------- ---------- ----------- ----------- --------
Total comprehensive items - - 952 (3,886) 26,005 23,071
--------------------------------------- ----------- ------------- ---------- ----------- ----------- --------
Transactions with owners
Share option charge - - - - 261 261
Total transactions with owners - - - - 261 261
--------------------------------------- ----------- ------------- ---------- ----------- ----------- --------
Total changes in equity - - 952 (3,886) 26,266 23,332
--------------------------------------- ----------- ------------- ---------- ----------- ----------- --------
At 30 June 2021 (unaudited) 37,750 10,312 314 2,979 (2,864) 48,491
--------------------------------------- ----------- ------------- ---------- ----------- ----------- --------
Other reserves
--------------------------------------
Capital Foreign
Ordinary redemption Other exchange Retained
shares reserve reserve reserve earnings Total
Six months ended 30 June 2020 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------------- ----------- ------------- ---------- ----------- ----------- ---------
At 1 January 2020 (audited) 37,750 10,312 (382) 6,942 (16,645) 37,977
Comprehensive income/(expense)
Loss for the period - - - - (10,720) (10,720)
Other comprehensive items
Currency translation differences - - - 2,444 - 2,444
Total other comprehensive items - - - 2,444 - 2,444
----------------------------------- ----------- ------------- ---------- ----------- ----------- ---------
Total comprehensive items - - - 2,444 (10,720) (8,276)
----------------------------------- ----------- ------------- ---------- ----------- ----------- ---------
Transactions with owners
Share option charge - - - - 112 112
Total transactions with owners - - - - 112 112
----------------------------------- ----------- ------------- ---------- ----------- ----------- ---------
Total changes in equity - - - 2,444 (10,608) (8,164)
----------------------------------- ----------- ------------- ---------- ----------- ----------- ---------
At 30 June 2020 (unaudited) 37,750 10,312 (382) 9,386 (27,253) 29,813
----------------------------------- ----------- ------------- ---------- ----------- ----------- ---------
* Net of deferred tax.
Other reserves
Capital Foreign
Ordinary redemption Other exchange Retained
shares reserve reserve reserve earnings Total
Year ended 31 December 2020 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------ --------- ------------ --------- ---------- ---------- ---------
At 1 January 2020 37,750 10,312 (382) 6,942 (16,645) 37,977
Comprehensive (expense)/income
Loss for the year - - - - (12,832) (12,832)
Other comprehensive items
Actuarial loss on defined benefit
pension liability* - - (256) - - (256)
Currency translation differences - - - (77) - (77)
------------------------------------ --------- ------------ --------- ---------- ---------- ---------
Total other comprehensive items - - (256) (77) - (333)
------------------------------------ --------- ------------ --------- ---------- ---------- ---------
Total comprehensive items - - (256) (77) (12,832) (13,165)
------------------------------------ --------- ------------ --------- ---------- ---------- ---------
Transactions with owners
Share option charge - - - - 347 347
------------------------------------
Total transactions with owners - - - - 347 347
------------------------------------ --------- ------------ --------- ---------- ---------- ---------
Total changes in equity - - (256) (77) (12,485) (12,818)
------------------------------------ --------- ------------ --------- ---------- ---------- ---------
At 31 December 2020 37,750 10,312 (638) 6,865 (29,130) 25,159
------------------------------------ --------- ------------ --------- ---------- ---------- ---------
* Net of deferred tax
Interim consolidated balance sheet
As at 30 June 2021
As at As at As at
30 30 June 31 December
June 2020 2020
2021 (Audited)
(Unaudited) (Unaudited)
Note GBP000 GBP000 GBP000
--------------------------------------------- ----- -------------- -------------- -------------
ASSETS
Non-current assets
Goodwill 604 604 604
Intangible fixed assets 11 6,657 14,665 7,343
Property, plant and equipment 12 4,932 15,184 5,077
Right-of-use assets 13 1,079 2,187 1,133
Trade and other receivables 14 154 465 156
Deferred tax assets - 1,198 4
--------------------------------------------- ----- -------------- -------------- -------------
Total non-current assets 13,426 34,303 14,317
--------------------------------------------- ----- -------------- -------------- -------------
Current assets
Trade and other receivables 14 5,694 5,699 1,517
Inventories 128 2,694 120
Current tax receivable - - 1,442
Cash and cash equivalents 15 49,139 12,977 11,821
--------------------------------------------- ----- -------------- -------------- -------------
54,961 21,370 14,900
--------------------------------------------- ----- -------------- -------------- -------------
Assets classified as held for sale - - 27,671
--------------------------------------------- ----- -------------- -------------- -------------
Total current assets 54,961 21,370 42,571
--------------------------------------------- ----- -------------- -------------- -------------
TOTAL ASSETS 68,387 55,673 56,888
--------------------------------------------- ----- -------------- -------------- -------------
LIABILITIES
Current liabilities
Trade and other payables 16 (9,626) (12,352) (14,104)
Provisions 17 (1,402) (466) (321)
Lease liabilities 19 (1,099) (1,132) (823)
Current tax liabilities (4,871) (4,895) (4,700)
Deferred tax liabilities (46) (89) (94)
--------------------------------------------- ----- -------------- -------------- -------------
(17,044) (18,934) (20,042)
--------------------------------------------- ----- -------------- -------------- -------------
Liabilities directly associated with assets
classified as held for sale - - (7,507)
--------------------------------------------- ----- -------------- -------------- -------------
Total current liabilities (17,044) (18,934) (27,549)
--------------------------------------------- ----- -------------- -------------- -------------
Net current assets 37,917 2,436 15,022
--------------------------------------------- ----- -------------- -------------- -------------
Non-current liabilities
Retirement benefit liability - (1,151) -
Lease liabilities 19 (2,852) (4,495) (3,059)
Deferred tax liabilities - (48) -
Provisions 17 - (1,232) (1,121)
(2,852) (6,926) (4,180)
--------------------------------------------- ----- -------------- -------------- -------------
TOTAL LIABILITIES (19,896) (25,860) (31,729)
--------------------------------------------- ----- -------------- -------------- -------------
NET ASSETS 48,491 29,813 25,159
--------------------------------------------- ----- -------------- -------------- -------------
EQUITY
Ordinary shares 37,750 37,750 37,750
Other reserves 13,605 19,316 16,539
Accumulated losses (2,864) (27,253) (29,130)
--------------------------------------------- ----- -------------- -------------- -------------
TOTAL EQUITY 48,491 29,813 25,159
--------------------------------------------- ----- -------------- -------------- -------------
Interim consolidated statement of cash flows
For the six months ended 30 June 2021
Six months Six months Year
ended
ended 30 June ended
31 December
2020
30 June 2020 (Audited)
2021 (Unaudited)
(Unaudited)
Note GBP000 GBP000 GBP000
------------------------------------------------------ ------ -------------- --------------- --------------
Cash flows from operating activities
Cash generated from operations, before separately
disclosed items 18 3,524 102 3,928
Interest received 27 13 13
Interest paid (2) (83) (84)
Tax refund received 1,442 - -
Tax paid (378) (263) (1,029)
Net cash generated from/(used in) operating
activities before separately disclosed items 4,613 (231) 2,828
Cash outflows - separately disclosed items 7 (634) (283) (484)
Cash generated from/(used in) operations 3,979 (514) 2,344
------------------------------------------------------ ------ -------------- --------------- --------------
Cash flows from investing activities
Disposal of freehold property in New Haven,
Connecticut (net of disposal costs) 20a 4,193 - -
Consideration paid for Lot.to Systems Limited,
net of cash acquired - (500) (500)
Receipt of Initial Payment for disposal of
Global Tote 20e - - 6,180
Proceeds net of cash disposed of and disposal
costs - Global Tote 20e 18,664 - -
Proceeds net of cash disposed of and disposal
costs - Bump 50:50 20e 4,732 - -
Proceeds from sale of other intangible assets 20c 150 - -
Investment in intangible fixed assets 11,20 (920) (798) (1,650)
Purchase of property, plant and equipment 12,20 (146) (525) (753)
------------------------------------------------------ ------ -------------- --------------- --------------
Net cash generated from/(used in) investing
activities 26,673 (1,823) 3,277
------------------------------------------------------ ------ -------------- --------------- --------------
Cash flows used in financing activities
Principal paid on lease liabilities 19,20 (675) (575) (1,316)
Interest paid on lease liabilities 19,20 (103) (184) (339)
Cash used in financing activities (778) (759) (1,655)
------------------------------------------------------ ------ -------------- --------------- --------------
Net increase/(decrease) in cash and cash equivalents 29,874 (3,096) 3,966
Effect of foreign exchange on cash and cash
equivalents (194) 508 (72)
Cash and cash equivalents at the beginning
of the year 11,821 15,565 15,565
Add cash included in assets held for sale 7,638 - -
Cash and cash equivalents at the end of the
period 49,139 12,977 19,459
Less cash held by assets held for sale - - (7,638)
------------------------------------------------------ ------ -------------- --------------- --------------
Group cash and cash equivalents at the end
of the period 15 49,139 12,977 11,821
------------------------------------------------------ ------ -------------- --------------- --------------
Represented by:
Cash and cash equivalents 15 49,139 12,977 11,821
Less customer funds 15 (530) (3,399) (465)
Adjusted net cash at the end of the period 15 48,609 9,578 11,356
------------------------------------------------------ ------ -------------- --------------- --------------
Notes to the consolidated interim financial statements
For the six months ended 30 June 2021
1. General information
Sportech PLC (the "Company") is a company domiciled in the UK and listed on the London Stock Exchange's Alternative Investment Market ("AIM"). The Company's registered office is Collins House, Rutland Square, Edinburgh, Midlothian, Scotland EH1 2AA. The condensed consolidated interim financial statements of the Company as at and for the period ended 30 June 2021 comprise the Company, its subsidiaries, joint ventures and associates (together referred to as the "Group"). The Company's accounting interim reference date is 30 June 2021. The principal activities of the Group were the provision of pari-mutuel betting (B2C) and the supply of wagering technology solutions (B2B) up until the disposal of the Group's Global Tote business on 17 June 2021 and the disposal of the Group's 50:50 Lottery division (Bump 50:50) on 2 June 2021. Following the disposals the Group continues to provide pari-mutuel betting (B2C) and lottery technology (B2B).
The condensed consolidated interim financial statements were approved for issue on 9 September 2021.
This condensed consolidated interim financial information does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2020 were approved by the Board of Directors on 31 March 2021 and delivered to the Registrar of Companies. The Report of the Auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.
2. Basis of preparation
a. These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' and also in accordance with the measurement and recognition principles of UK adopted international accounting standards. They do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements for the year ended 31 December 2020 which have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
b. After making reasonable enquiries and forecasting the Group's cash flows with reasonable downside assumptions applied, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the condensed consolidated interim financial statements. The Directors have not included in the downside model any assumption of a further local or more widespread "lockdown" as a result of COVID-19 cases or a new pandemic arising. Under this scenario the Directors will take all actions necessary (as evidenced in 2020) and make use of all government support available to ensure the Company and the Group continues in operational existence.
c. The preparation of condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, significant judgements have been made by management with respect to the assumptions underpinning the Group's tax liabilities and the carrying value of intangible fixed assets.
d. The principal risks and uncertainties for the Group remain the same as those detailed on pages 24 to 26 of the 2020 Sportech PLC Annual Report and Accounts, where descriptions of mitigating activities carried out by the Group are also outlined. Those risks are regulation, product popularity, technological changes, client concentration and industry competition, foreign exchange, failure to implement Sports Betting strategy and global pandemics.
3. Accounting policies
There are no new standards or amendments to standards or interpretations that are mandatory for the first time for the financial year beginning 1 January 2021 that would impact the Group financial statements. Therefore, all accounting policies applied in these condensed consolidated interim financial statements are consistent with those of the annual financial statements for the year ended 31 December 2020, as described in those annual financial statements.
The standards, amendments and interpretations that are not yet effective and have not been adopted early by the Group are listed in the 2020 Annual Report and accounts.
4. Adjusted performance measures
The Board of Directors assesses the performance of the operating segments based on a measure of adjusted EBITDA which excludes the effects of expenditure management believe should be added back (separately disclosed items). The share option expense is also excluded given it is not directly linked to operating performance of the divisions. Interest is not allocated to segments as the Group's cash position is controlled by the central finance team. This measure provides the most reliable indicator of underlying performance of each of the trading divisions. This is considered the most reliable indicator as it is the closest approximation to cash generated by underlying trade, excluding the impact of separately disclosed items and working capital movements.
Adjusted EBITDA is not an IFRS measure, nevertheless although it may not be comparable to adjusted figures used elsewhere, it is widely used by both the analyst community to compare with other gaming companies and by management to assess underlying performance.
A reconciliation of the adjusted operating expenses used for statutory reporting and the adjusted performance measures is shown below:
Restated
Six months Six months Year
ended ended
Note 30 June 30 June ended
31 December
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
---------------------------------------------- ------ --------------- --------------- --------------
Operating costs per income statement (8,259) (12,278) (20,225)
Add back:
Sports Betting investment 5 191 157 261
Depreciation 12,13 479 1,114 1,793
Amortisation, excluding acquired intangible
assets 11 206 145 485
Amortisation of acquired intangible assets 11 254 254 509
Impairment of property, plant and equipment 12 - 2,521 4,349
Impairment of right-of-use asset 13 - 1,827 -
Share option charge 5 261 112 347
Separately disclosed items 7 477 73 229
---------------------------------------------- ------ --------------- --------------- --------------
Total adjusted net operating costs (pre
Sports Betting investment) (6,391) (6,075) (12,252)
---------------------------------------------- ------ --------------- --------------- --------------
Adjusted EBITDA is calculated as follows:
Restated
Six months Six months Year
ended ended
30 June 30 June ended
31 December
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
------------------------------------------------- --------------- --------------- --------------
Revenue 13,445 8,377 19,966
Cost of sales (6,370) (4,387) (9,432)
------------------------------------------------- --------------- --------------- --------------
Gross profit 7,075 3,990 10,534
Marketing and distribution costs (227) (295) (319)
------------------------------------------------- --------------- --------------- --------------
Contribution 6,848 3,695 10,215
Adjusted operating income and costs (pre Sports
Betting investment) (6,391) (6,075) (12,252) ------------------------------------------------- --------------- --------------- -------------- Adjusted EBITDA pre Sports Betting investment 457 (2,380) (2,037) Sports Betting investment (191) (157) (261) ------------------------------------------------- --------------- --------------- -------------- Adjusted EBITDA 266 (2,537) (2,298) ------------------------------------------------- --------------- --------------- --------------
Sports Betting investment represents the time and cost the Group has incurred in seeking to secure a Sports Betting licence in the State of Connecticut and also in seeking partnerships across the rest of the US in Sports Betting. It includes lobbying costs and consultants. Of these costs, GBP191k were external costs and GBPnil were internal (six months ended 30 June 2020: GBP157k were external and GBPnil were internal, year ended 31 December 2020: GBP261k were external costs and GBPnil were internal).
Adjusted profit is also an adjusted performance measure used by the Group. This uses adjusted EBITDA, as defined above as management's view of the closest proxy to cash generation for underlying divisional performance, and deducting share option charges, depreciation, amortisation of intangible assets (other than those which arise in the acquisition of businesses) and certain finance charges. This provides an adjusted profit before tax measure, which is then taxed by applying an estimated adjusted tax measure. The adjusted tax charge excludes the tax impact of income statement items not included in adjusted profit before tax.
Restated
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
From continuing operations: GBP000 GBP000 GBP000
-------------------------------------------------- -------------- ------------- --------------
Adjusted EBITDA 266 (2,537) (2,298)
Share option charge (261) (112) (347)
Depreciation (479) (1,114) (1,793)
Amortisation (excluding amortisation of acquired
intangibles) (206) (145) (485)
Net finance costs (excluding certain finance
costs - note 8) (55) (168) (254)
-------------------------------------------------- -------------- ------------- --------------
Adjusted loss before tax (735) (4,076) (5,177)
Tax at 12.2% (30 June 2020: (4.8)%, 31 December
2020: 20.2%) 89 (195) 1,045
-------------------------------------------------- -------------- ------------- --------------
Adjusted loss after tax (646) (4,271) (4,132)
-------------------------------------------------- -------------- ------------- --------------
Restated
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
From discontinued operations: GBP000 GBP000 GBP000
-------------------------------------------------- -------------- ------------- --------------
Adjusted EBITDA 5,366 1,315 4,632
Depreciation - (1,039) (1,998)
Amortisation (excluding amortisation of acquired
intangibles) - (1,796) (3,376)
Net finance costs (excluding certain finance
costs - note 7) (24) (53) (68)
-------------------------------------------------- -------------- ------------- --------------
Adjusted profit/(loss) before tax 5,342 (1,573) (810)
Tax at 22.3% (30 June 2020: (3.9)%, 31 December
2020: 71.3%) (1,191) (61) 577
-------------------------------------------------- -------------- ------------- --------------
Adjusted profit/(loss) after tax 4,151 (1,634) (233)
-------------------------------------------------- -------------- ------------- --------------
5. Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors, which makes strategic and operational decisions.
The Group has identified its operating segments as outlined below:
- Sportech Lotteries - provision of lottery services and systems worldwide; - Sportech Venues - off-track betting venue management; and - Corporate costs - central costs relating to the overall management of the Group.
The Board of Directors assesses the performance of the operating segments based on a measure of adjusted EBITDA as defined in note 4. The share option expense is also excluded. Interest is not allocated to segments as the Group's cash position is controlled by the central finance team. Sales between segments are at arm's length.
Six months ended 30 June
2021 (Unaudited)
-------------------------------------------------- -------------------------------------------------
Sportech Sportech Corporate
Lotteries Venues costs Group
GBP000 GBP000 GBP000 GBP000
-------------------------------------------------- ------------ ----------- ------------ --------
Revenue from food and beverage sales - 824 - 824
Revenue from rendering of services 1,940 10,681 - 12,621
-------------------------------------------------- ------------ ----------- ------------ --------
Total revenue 1,940 11,505 - 13,445
Cost of sales (576) (5,794) - (6,370)
-------------------------------------------------- ------------ ----------- ------------ --------
Gross profit 1,364 5,711 - 7,075
Marketing and distribution costs (22) (205) - (227)
-------------------------------------------------- ------------ ----------- ------------ --------
Contribution 1,342 5,506 - 6,848
Adjusted operating costs (561) (4,314) (1,516) (6,391)
-------------------------------------------------- ------------ ----------- ------------ --------
Adjusted EBITDA (pre Sports Betting investment) 781 1,192 (1,516) 457
Sport betting investment - (191) - (191)
-------------------------------------------------- ------------ ----------- ------------ --------
Adjusted EBITDA 781 1,001 (1,516) 266
Share option charge - - (261) (261)
Depreciation (105) (366) (8) (479)
Amortisation (excluding amortisation of
acquired intangibles) (116) - (90) (206)
-------------------------------------------------- ------------ ----------- ------------ --------
Segment result 560 635 (1,875) (680)
Amortisation of acquired intangibles (254) - - (254)
Profit on disposal of Sports Haven - 2,575 - 2,575
Separately disclosed items (173) (8) (296) (477)
-------------------------------------------------- ------------ ----------- ------------ --------
Operating profit/(loss) 133 3,202 (2,171) 1,164
Net finance income 76
Profit before taxation from continuing
operations 1,240
Taxation - continuing operations (608)
--------
Profit for the period from continuing operations 632
Profit after taxation from discontinued
operations 23,331
--------
Profit for the period 23,963
-------------------------------------------------- ------------ ----------- ------------ --------
Other segment items
Capital expenditure - intangible fixed
assets 95 - - 95
Capital expenditure - property, plant and
equipment 2 - - 2
-------------------------------------------------- ------------ ----------- ------------ --------
Six months ended 30 June
2020 (Unaudited)
-------------------------------------------------
Restated
Sportech Sportech Corporate
Lotteries Venues costs Group
GBP000 GBP000 GBP000 GBP000
-------------------------------------------------- ----------- ----------- ------------ ---------
Revenue from food and beverage sales - 807 - 807
Revenue from rendering of services 1,146 6,424 - 7,570
-------------------------------------------------- ----------- ----------- ------------ ---------
Total revenue 1,146 7,231 - 8,377
Cost of sales (689) (3,698) - (4,387)
-------------------------------------------------- ----------- ----------- ------------ ---------
Gross profit 457 3,533 - 3,990
Marketing and distribution costs (6) (289) - (295)
-------------------------------------------------- ----------- ----------- ------------ ---------
Contribution 451 3,244 - 3,695
Adjusted operating costs (371) (4,510) (1,194) (6,075)
-------------------------------------------------- ----------- ----------- ------------ ---------
Adjusted EBITDA (pre Sports Betting investment) 80 (1,266) (1,194) (2,380)
Sport betting investment - (157) - (157)
-------------------------------------------------- ----------- ----------- ------------ ---------
Adjusted EBITDA 80 (1,423) (1,194) (2,537)
Share option charge - - (112) (112)
Depreciation (102) (1,005) (7) (1,114)
Amortisation (excluding amortisation
of acquired intangibles) (13) - (132) (145)
-------------------------------------------------- ----------- ----------- ------------ ---------
Segment result (35) (2,428) (1,445) (3,908)
Amortisation of acquired intangibles (254) - - (254)
Impairment of property, plant and equipment - (2,521) - (2,521)
Impairment of right-of-use asset - (1,827) - (1,827)
Separately disclosed items - (18) (55) (73)
-------------------------------------------------- ----------- ----------- ------------ ---------
Operating loss (289) (6,794) (1,500) (8,583)
Net finance costs (413)
Loss before taxation - continuing operations (8,996)
Taxation - continuing operations 77
---------
Loss after taxation - continuing operations (8,919)
Loss after taxation - discontinued operations (1,801)
---------
Loss for the period (10,720)
-------------------------------------------------- ----------- ----------- ------------ ---------
Other segment items
Capital expenditure - intangible fixed
assets - - 1 1
Capital expenditure - property, plant
and equipment - 29 - 29
-------------------------------------------------- ----------- ----------- ------------ ---------
The above table has been restated to exclude discontinued activities .
Year ended 31 December 2020
(Audited)
-----------------------------------------------
Sportech Sportech Corporate
Lotteries Venues costs Group
GBP000 GBP000 GBP000 GBP000
------------------------------------------------- ----------- --------- ---------- -----------
Revenue from food and beverage sales - 1,472 - 1,472
Revenue from rendering of services 2,898 15,596 - 18,494
------------------------------------------------- ----------- --------- ---------- ---------
Total revenue 2,898 17,068 - 19,966
Cost of sales (808) (8,624) - (9,432)
------------------------------------------------- ----------- --------- ---------- ---------
Gross profit 2,090 8,444 - 10,534
Marketing and distribution costs (8) (311) - (319)
------------------------------------------------- ----------- --------- ---------- ---------
Contribution 2,082 8,133 - 10,215
Adjusted net operating costs (note 1) (1,107) (9,218) (1,927) (12,252)
------------------------------------------------- ----------- --------- ---------- ---------
Adjusted EBITDA (pre sports betting investment) 975 (1,085) (1,927) (2,037)
Sports betting investment - (261) - (261)
------------------------------------------------- ----------- --------- ---------- ---------
Adjusted EBITDA 975 (1,346) (1,927) (2,298)
Share option charge - - (347) (347)
Depreciation (182) (1,595) (16) (1,793)
Amortisation (excluding amortisation of
acquired intangible assets) (235) - (250) (485)
------------------------------------------------- ----------- --------- ---------- ---------
Segment result before amortisation of acquired
intangibles 558 (2,941) (2,540) (4,923)
Amortisation of acquired intangibles (509) - - (509)
Impairment of property, plant and equipment
and right-of-use assets - (4,349) - (4,349)
Separately disclosed items - (18) (211) (229)
------------------------------------------------- ----------- --------- ---------- ---------
Operating profit/(loss) 49 (7,308) (2,751) (10,010)
Net finance costs (557)
Loss before taxation from continuing operations (10,567)
Taxation 297
---------
Loss for the year from continuing operations (10,270)
Loss after tax from discontinued operations (2,562)
---------
Loss for the year (12,832)
------------------------------------------------- ----------- --------- ---------- ---------
Discontinued operations were within the Sportech Racing and Digital division which existed in prior years and to 31 December 2020 prior to classification as discontinued. The remaining businesses in the former Racing and Digital division now form a new division "Sportech Lotteries".
Sportech Sportech Corporate
Lotteries Venues costs Group
GBP000 GBP000 GBP000 GBP000
----------------------------------------------- ----------- --------- ---------- -------
Other segment items - capital expenditure
Capital expenditure - intangible fixed assets 230 - - 230
Capital expenditure - property, plant and
equipment 121 29 - 150
----------------------------------------------- ----------- --------- ---------- -------
6. Expenses by nature
Restated
Six months Six months Year
ended ended
30 June 30 June ended
2021 2020 31 December
2020
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
--------------------------------------------- ---- --------------- --------------- --------------
Cost of sales
Tote and track fees 5,426 3,186 7,821
F&B consumables 305 285 528
Betting and gaming duties 48 157 79
Repairs and maintenance cost of sales 18 45 48
Ticket paper 53 42 148
Programs 147 69 196
Outsourced service costs 334 603 561
Cost of sales 39 - 51
Total cost of sales 6,370 4,387 9,432
--------------------------------------------------- --------------- --------------- --------------
Marketing and distribution costs
Marketing 210 286 294
Vehicle costs 14 - 16
Freight 3 9 9
--------------------------------------------------- --------------- --------------- --------------
Total marketing and distribution costs 227 295 319
--------------------------------------------------- --------------- --------------- --------------
Operating costs
Staff costs - gross, excluding share option
charges 3,415 3,337 7,015
Less amounts capitalised (95) - (230)
--------------------------------------------------- --------------- --------------- --------------
Staff costs - net 3,320 3,337 6,785
Property costs 1,434 1,189 2,865
IT & communications 224 241 499
Professional fees and licences 1,445 1,215 2,160
Travel and entertaining 72 71 66
Banking transaction costs and FX 35 64 114
Other costs 52 115 24
--------------------------------------------------- --------------- --------------- --------------
Adjusted operating costs 6,582 6,232 12,513
Share option charge 261 112 347
Depreciation 479 1,114 1,793
Amortisation, excluding amortisation of
acquired intangibles 206 145 485
Amortisation of acquired intangibles 254 254 509
Impairment of property, plant and equipment
and right-of-use asset - 4,348 4,349
Separately disclosed items 477 73 229
--------------------------------------------------- --------------- --------------- --------------
Total operating costs 8,259 12,278 20,225
--------------------------------------------------- --------------- --------------- --------------
7. Separately disclosed items
Restated
Six months Six Year
ended months
ended
30 June 30 ended
June 31 December
2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
Note GBP000 GBP000 GBP000
------------------------------------------------------- -------- --------------- --------------- ---------------
Continuing operations
Included in operating costs :
Redundancy and restructuring costs in respect of
the rationalisation and
modernisation of the business 179 25 -
Corporate activity 290 4 118
Costs in relation to the Spot the Ball VAT refund - - 44
Costs in relation to exiting the Group's interests
in India 8 44 65
UK defined benefit pension scheme buy-out - - 2
477 73 229
Discontinued operations
Included in operating costs 20b,20c 371 147 1,224
Total included in operating costs 848 220 1,453
------------------------------------------------------- -------- --------------- --------------- ---------------
Included in finance costs:
Interest accrued on corporate tax potentially due
and unpaid at the balance sheet date on STB refund
received in 2016 8 74 183 150
Interest paid on VAT settlement reached in 2018 - - 83
------------------------------------------------------- -------- --------------- --------------- ---------------
74 183 233
------------------------------------------------------- -------- --------------- --------------- ---------------
Total Separately disclosed items 922 403 1,686
------------------------------------------------------- -------- --------------- --------------- ---------------
Below is a summary of cash outflows from separately
disclosed items:
Restated
Six months Six Year
ended months
ended
30 June 30 ended
June 31 December
2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
GBP000 GBP000 GBP000
------------------------------------------------------- ---- --------------- --------------- ---------------
Continuing operations - cash outflows from separately
disclosed items:
Redundancy and restructuring costs in respect
of the rationalisation and
modernisation of the business (44) (3) (18)
Expenses in relation to the UK defined benefit
pension scheme "buy-in" - - (2)
Costs in relation to the Spot the Ball VAT refund (27) - -
Costs in relation to corporate activity (48) - (127)
Costs in relation to legacy tax disputes - - (17)
Transaction costs - disposal of Global Tote Business - - (16)
Costs in relation to the Group's lease in Norco,
California (1) (32) -
Costs in relation to exiting the Group's interests
in India (8) (44) (65)
Corporate activity - (7) (224)
One off start-up costs of new ventures, including
new venue builds and joint ventures - (197) -
------------------------------------------------------- ---- --------------- --------------- ---------------
(128) (283) (469)
Cash outflows from separately disclosed items
- discontinued operations (506) - (15)
(634) (283) (484)
------------------------------------------------------------ --------------- --------------- ---------------
8. Net finance costs
Restated
Six months Six months Year
ended ended
30 June 30 June ended
31 December
2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
Note GBP000 GBP000 GBP000
------------------------------------------------ -------- --------------- -------------- ---------------
Continuing operations:
Finance costs:
Interest accrued and paid on tax liabilities (74) (183) (233)
Interest on lease liabilities (80) (184) (265)
Foreign exchange loss on financial assets and
liabilities denominated in foreign currency - (62) (70)
------------------------------------------------ -------- --------------- -------------- ---------------
Total finance costs (154) (429) (568)
------------------------------------------------ -------- --------------- -------------- ---------------
Finance income:
Foreign exchange gain on financial assets and
liabilities denominated in foreign currency 205 - -
Interest received on overpaid tax 25 - -
Interest received on bank deposits - 16 11
------------------------------------------------ -------- --------------- -------------- ---------------
Total finance income 230 16 11
------------------------------------------------ -------- --------------- -------------- ---------------
Discontinued operations 20b,20c 54 (53) (68)
Net finance costs 130 (466) (625)
------------------------------------------------ -------- --------------- -------------- ---------------
Of the above amounts the following have been excluded for the purposes of deriving the alternative performance measures in note 4.
Six months Six Year
ended months
ended
30 June 30 June ended
31 December
2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
Continuing operations GBP000 GBP000 GBP000
------------------------------------------------------ -------------- -------------- --------------
Foreign exchange gain/(loss) on financial assets and
liabilities denominated in foreign currency 205 (62) (70)
Interest accrued and paid on tax liabilities (74) (183) (233)
------------------------------------------------------ -------------- -------------- --------------
131 (245) (303)
------------------------------------------------------ -------------- -------------- --------------
9. Taxation
Taxation is provided based on management's best estimate of the expected weighted average annual taxation rate for the full year. The estimated weighted average annual tax rate for the year ended 31 December 2021 is 49.0% (2020: (0.9)%). The movement is a result of a change in mix of profits/(losses) in jurisdictions with varying tax rates and the non-recognition of deferred tax on losses in certain jurisdictions due to expectation of non-recovery.
The Group continues to hold a tax provision of GBP4,600k (30 June 2020: GBP5,047k, 31 December 2020: GBP4,600k) for tax potentially due on the 2016 Spot the Ball refund (excluding interest). Further provisions are held totalling GBPnil (30 June 2020: GBP469k, 31 December 2020: GBPnil) for other uncertain tax positions. The remaining current tax liability is for estimated tax payable on profits generated in the six months to 30 June 2021.
10. Earnings per share
2021 2020 (restated)
Six months ended 30 June (Unaudited) Continuing Discontinued Total Continuing Discontinued Total
-------------------------------------- ----------- ------------- -------- ----------- ------------- ---------
Basic EPS
Profit/(loss) for the period
(GBP000) 632 23,331 23,963 (8,919) (1,801) (10,720)
Weighted average no of shares
('000) 188,751 188,751 188,751 188,751 188,751 188,751
-------------------------------------- ----------- ------------- -------- ----------- ------------- ---------
Basic EPS 0.3p 12.4p 12.7p (4.7)p (1.0)p (5.7)p
-------------------------------------- ----------- ------------- -------- ----------- ------------- ---------
2020
Year ended 31 December (Audited) Continuing Discontinued Total
-------------------------------------- ----------- ------------- ---------
Basic EPS
Loss for the year (GBP000) (10,270) (2,562) (12,832)
Weighted average no of shares ('000) 188,751 188,751 188,751
-------------------------------------- ----------- ------------- ---------
Basic EPS (5.4)p (1.4)p (6.8)p
-------------------------------------- ----------- ------------- ---------
2021 2020 (restated)
Six months ended 30 June (Unaudited) Continuing Discontinued Total Continuing Discontinued Total
-------------------------------------- ----------- ------------- -------- ----------- ------------- ---------
Diluted EPS
Profit/(loss) for the period
(GBP000) 632 23,331 23,963 (8,919) (1,801) (10,720)
Weighted average no of shares
('000) 188,751 188,751 188,751 188,751 188,751 188,751
Dilutive potential ordinary N/A N/A N/A N/A N/A N/A
shares ('000)
-------------------------------------- ----------- ------------- -------- ----------- ------------- ---------
Total potential ordinary shares
('000) 188,751 188,751 188,751 188,751 188,751 188,751
-------------------------------------- ----------- ------------- -------- ----------- ------------- ---------
Diluted EPS 0.3p 12.4p 12.7p (4.7)p (1.0)p (5.7)p
-------------------------------------- ----------- ------------- -------- ----------- ------------- ---------
2020
Year ended 31 December (Audited) Continuing Discontinued Total
---------------------------------- --- ----------- ------------- ---------
Diluted EPS
Loss for the year (GBP000) (10,270) (2,562) (12,832)
Weighted average no of shares
('000) 188,751 188,751 188,751
Dilutive potential ordinary N/A N/A N/A
shares ('000)
---------------------------------- --- ----------- ------------- ---------
Total potential ordinary shares
('000) 188,751 188,751 188,751
----------------------------------------- ----------- ------------- ---------
Diluted EPS (5.4)p (1.4)p (6.8)p
----------------------------------------- ----------- ------------- ---------
Adjusted EPS
Adjusted EPS is calculated by dividing the adjusted profit after tax attributable to owners of the Company, as defined in note 4, by the weighted average number of ordinary shares in issue during the year.
Restated
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2021 2020 2020
Continuing operations Note (Unaudited) (Unaudited) (Audited)
---------------------------------- ------ -------------- -------------- ---------------
Adjusted loss after tax (GBP000) 4 (646) (4,271) (4,132)
Basic Adjusted EPS (pence) (0.3)p (2.3)p (2.2)p
Diluted Adjusted EPS (pence) (0.3)p (2.3)p (2.2)p
---------------------------------- ------ -------------- -------------- ---------------
11. Intangible fixed assets
Six Six Year
months months
ended ended
30 June 30 June ended
31 December
2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
GBP000 GBP000 GBP000
------------------------------------------ ---- -------------- -------------- --------------
At 1 January 7,343 14,935 14,935
Additions 95 798 1,650
Transferred to held for sale - - (4,544)
Amortisation charge for period (460) (2,195) (4,370)
Disposal (82) - -
Movement as a result of foreign exchange (239) 1,127 (328)
-------------- -------------- --------------
Net book amount at end of period 6,657 14,665 7,343
------------------------------------------------ -------------- -------------- --------------
12. Property, plant and equipment
Six Six Year
months months
ended ended
30 June 30 ended
June 31 December
2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
GBP000 GBP000 GBP000
------------------------------------------ -------------- -------------- --------------
At 1 January 5,077 17,676 17,676
Additions 2 525 753
Transferred to held for sale - - (8,048)
Depreciation charge for period (225) (1,495) (2,604)
Impairment - (2,521) (2,521)
Movement as a result of foreign exchange 78 999 (179)
-------------- -------------- --------------
Net book amount at end of period 4,932 15,184 5,077
------------------------------------------ -------------- -------------- --------------
13. Right-of-use assets
Six months Six Year
ended months
ended
30 June 30 June ended
31 December
2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
Note GBP000 GBP000 GBP000
-------------------------------------------- ----- -------------- -------------- --------------
At 1 January (2020 - on transition to IFRS
16) 1,133 6,312 6,312
Additions 19 169 148 654
Depreciation charge for period (254) (658) (1,187)
Reassessment of lease assumptions - break
clause 19 - (2,232) (2,231)
Impairment - (1,827) (1,828)
Transferred to held for sale - - (833)
Movement as a result of foreign exchange 31 444 246
-------------- -------------- --------------
Net book amount at end of period 1,079 2,187 1,133
-------------------------------------------- ----- -------------- -------------- --------------
14. Trade and other receivables
As at As As
at at 31
December
2020
30 June 30 (Audited)
June
2021 2020
(Unaudited) (Unaudited)
GBP000 GBP000 GBP000
----------------------------------- -------------- -------------- ------------
Non-current
Trade and other receivables 154 465 156
Current
Trade and other receivables 5,694 5,699 1,517
Total trade and other receivables 5,848 6,164 1,673
----------------------------------- -------------- -------------- ------------
Included in current trade and other receivables is GBP3,377k consideration to be received for the disposal of the Global Tote division (note 20e).
15. Cash and cash equivalents
As at As at As at
31 December
2020
30 June 30 (Audited)
June
2021 2020
(Unaudited) (Unaudited)
Note GBP000 GBP000 GBP000
--------------------------------- ----- -------------- -------------- -------------
Cash and short-term deposits 48,609 9,578 11,356
Customer funds 16 530 3,399 465
Total cash and cash equivalents 49,139 12,977 11,821
--------------------------------- ----- -------------- -------------- -------------
Customer funds are matched by liabilities of an equal value within trade and other payables (see note 16).
16. Trade and other payables
As at As at As at
31 December
2020
30 June 30 (Audited)
June
2021 2020
(Unaudited) (Unaudited)
Note GBP000 GBP000 GBP000
--------------------------------------- ----- -------------- -------------- -------------
Trade payables 3,806 1,948 3,581
Other taxes and social security costs 575 495 141
Accruals and other payables 4,695 5,610 3,737
Deferred income 20 900 6,180
Player liability 15 530 3,399 465
Total trade and other payables 9,626 12,352 14,104
--------------------------------------- ----- -------------- -------------- -------------
17. Provisions
Six months Six Year
ended months
ended
30 June 30 ended
June 31 December
2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
GBP000 GBP000 GBP000
------------------------------------- ---- -------------- -------------- --------------
At beginning of period 1,442 1,605 1,605
Utilised during the period - (31) (105)
Transferred to assets held for sale - - (7)
Currency movements (40) 124 (51)
------------------------------------------- -------------- -------------- --------------
Total provisions 1,402 1,698 1,442
------------------------------------------- -------------- -------------- --------------
Provisions are in relation to:
Current provisions
Onerous contracts 1,402 466 321
------------------------------------------- -------------- -------------- --------------
Non-current provisions
Onerous contracts - 1,226 1,121
Other - 6 -
------------------------------------- ---- -------------- -------------- --------------
Total non-current provisions - 1,232 1,121
------------------------------------------- -------------- -------------- --------------
Total provisions 1,402 1,698 1,442
------------------------------------------- -------------- -------------- --------------
The Group agreed a settlement for one of its committed leases in California, USA following the period end. The settlement amounted to GBP899k ($1,242k) with related legal fees incurred of cGBP72k. A provision of GBP1,184k is included in the above table in relation to this liability as well as a lease liability of GBP214k shown within lease liabilities in note 19. The provision in excess of the agreed settlement will be released to the income statement in H2 2021. The settlement was paid in August 2021. The remaining provision relates to a second committed lease dispute and settlement discussions are ongoing.
18. Cash flow from operating activities before separately disclosed items
Reconciliation of profit/(loss) before taxation to cash flows from operating activities before separately disclosed items:
Six months Six months
ended ended
30 June 30 June Year
2021 2020 ended
31 December
2020
(Unaudited) (Unaudited) (Audited)
Note GBP000 GBP000 GBP000
---------------------------------------------------- --------- -------------- --------------- ---------------
Profit/(loss) before taxation from continuing
operations 1,240 (8,996) (10,567)
Profit/(loss) before taxation from discontinued
operations 20b,20c 23,505 (1,720) (2,034)
---------------------------------------------------- --------- -------------- --------------- ---------------
Total profit/(loss) before tax 24,745 (10,716) (12,601)
Adjustments for:
Net Separately disclosed items (included in
operating costs) 7 848 220 1,453
Depreciation and amortisation 11,12,13 939 4,348 8,161
Profit on disposal of Sports Haven 20a (2,575) - -
Profit on disposal of discontinued operations 20d (18,327) - -
Profit on disposal of software (65) - -
Impairment of assets 12,13 - 4,348 4,349
Net finance charges 8 (130) 466 625
Share option expense 261 112 347
Changes in working capital:
(Increase)/decrease/in trade and other receivables (5,716) 1,938 2,791
Decrease/(increase) in inventories 205 78 (179) Increase/(decrease) in trade and other payables, excluding player liabilities 2,776 (1,511) (1,060) Increase/(decrease) in player liabilities 15 563 819 42 Cash generated from operating activities, before Separately disclosed items 3,524 102 3,928 ---------------------------------------------------- --------- -------------- --------------- ---------------
19. Lease liabilities
As at As at As at
30 June 30 June 31 December
2021 2020 2020
(Unaudited) (Unaudited) (Unaudited)
Maturity analysis - contractual undiscounted cashflows GBP000 GBP000 GBP000
-------------------------------------------------------- -------------- -------------- --------------
Less than one year 1,416 1,591 1,085
Between 2 and 5 years 2,880 4,416 3,241
More than 5 years 1 279 -
Total 4,297 6,286 4,326
-------------------------------------------------------- -------------- -------------- --------------
The weighted average incremental borrowing rate applied to the lease liabilities was 5.75%, lowest rate being 2.75% and the highest being 8.45%.
As at As at As at
30 June 30 June 31 December
2021 2020 2020
(Unaudited) (Unaudited) (Unaudited)
Lease liabilities included in the balance sheet GBP000 GBP000 GBP000
--------------------------------------------------- -------------- -------------- --------------
Current 1,099 1,132 823
Non-current 2,852 4,495 3,059
Total 3,951 5,627 3,882
--------------------------------------------------- -------------- -------------- --------------
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2021 2020 2020
(Unaudited) (Unaudited) (Unaudited)
Movement in lease liability during the Note GBP000 GBP000 GBP000
period
-------------------------------------------- ----- -------------- -------------- --------------
At 1 January 3,882 7,724 7,724
Interest charged to the income statement 8 80 218 339
New leases entered into 13 633 148 654
Reassessment of lease assumptions - break
clause 13 - (2,232) (2,231)
Lease rentals paid (621) (759) (1,655)
Transferred to held for sale - - (998)
Movement as a result of foreign exchange (223) 528 49
At period end 3,751 5,627 3,882
-------------------------------------------- ----- -------------- -------------- --------------
20. Discontinued operations and profit on disposal
20a) On 28 April 2021 the Group completed the disposal of its freehold property in New Haven, Connecticut, known as "Sports Haven" for gross consideration of GBP4,346k ($6,000k). The asset was classified as held for sale as at 31 December 2020 and was part of the Sportech Venues division. Costs related to the disposal amounted to GBP153k ($210k). The property is to be leased back for 18 months to 31 October 2022 at a rental of cGBP36k per month ($50k). On disposal, a lease liability of GBP633k was recognised as well as a right-of-use asset of GBP169k. The profit on disposal is analysed as follows:
Note GBP000
------------------------------- ----- --------
Cash consideration received 4,346
Net book value disposed of (1,154)
Right-of-use asset recognised 13 169
Lease liability recognised 19 (633)
Costs of disposal (153)
---------------------------------- ----- --------
Profit after tax on disposal
net of costs 2,575
---------------------------------- ----- --------
20b) On 2 June 2021 the Group completed the disposal of its 100% interest in Bump (Worldwide) Inc. ("Bump") for gross consideration of GBP4,972k ($8,556k). An estimate for net working capital settlement has been included of GBP307k (which was received in the period), final settlement could be more or less than management's estimate. The division was classified as held for sale as at 31 December 2020 and was part of the Sportech Racing division.
The profit/(loss) for the period and cashflows from Bump are shown below:
Period Six months
ended ended
2 June 30 June
2021 2020
(Unaudited) Year
ended
31 December
2020
Note (Unaudited) (Audited)
Bump (Worldwide) Inc.: GBP000 GBP000 GBP000
------------------------------------------------ ----- ------------- ------------- -------------
Revenue 810 395 703
Cost of sales, marketing and distribution and
adjusted operating expenses (487) (697) (1,598)
------------------------------------------------
Adjusted EBITDA 323 (302) (895)
Depreciation and amortisation - (148) (291)
Separately disclosed items - - (65)
Finance income/(costs) 78 (90) 45
------------------------------------------------
Profit/(loss) before tax 401 (540) (1,206)
Tax, excluding tax arising on disposal - - -
Profit/(loss) after tax 401 (540) (1,206)
Gain from selling discontinued operations after
tax (net of disposal costs) 20d 3,843 - -
Profit/(loss) for the period 4,244 (540) (1,206)
Net cash flow from operating activities 134 (192) (801)
Net cash flow from investing activities (37) (79) (118)
Net decrease in cash generated/(used) 97 (271) (919)
Separately disclosed items within the above table are disposal costs.
20c) On 17 June 2021 the Group completed the disposal of its Global Tote division which also formed part of the Sportech Racing division and was classified as held for sale as at 31 December 2020. Gross Consideration amounts to GBP34,127k including a payment for cash transferred to the buyer with the business of GBP3,890k net of debt like items of GBP1,294k, received in July 2021 plus an estimate for settlement of net working capital which was in excess of an agreed Target working capital (and other adjustments) of GBP781k also delivered. The estimate may be higher or lower than management's estimate when settled. In addition, the historical underlying tote software code was disposed of by Sportech PLC to BetMakers Technology Group Limited within the same agreement, proceeds of GBP150k resulted in a profit on disposal of GBP68k.
The profit/(loss) for the period and cashflows from Global Tote are shown below:
Period Six months
ended ended
17 June 30 June
2021 2020
Year
ended
31 December
2020
Note (Unaudited) (Unaudited) (Audited)
Global Tote Group: GBP000 GBP000 GBP000
Revenue 12,175 11,400 25,052
Cost of sales, marketing and distribution and
adjusted operating expenses (7,003) (9,783) (19,525)
Adjusted EBITDA 5,172 1,617 5,527
Depreciation and amortisation - (2,687) (5,083)
Separately disclosed items (371) (147) (1,159)
Finance (costs)/income (24) 37 (113)
Profit/(loss) before tax 4,777 (1,180) (828)
Tax, excluding tax arising on disposal (174) (81) (528)
Profit/(loss) after tax 4,603 (1,261) (1,356)
Gain from selling discontinued operations after
tax (net of disposal costs) 20d 14,484 - -
Profit/(loss) for the period 19,087 (1,261) (1,356)
Net cash flow from operating activities 1,780 3,861 6,099
Net cash flow from investing activities (932) (1,214) (1,905)
Net cash flow from financing activities (158) (221) (436)
Net increase in cash generated 690 2,426 3,758
Separately disclosed items incurred in the period were redundancy and restructuring costs in respect of a rationalisation of this business (period ended 30 June 2020: provision for dilapidation costs on an expiring lease (GBP147k), year ended 31 December 2020: redundancy and restructuring costs in respect of a rationalisation of this business including a provision for dilapidation costs on an expiring lease (GBP155k) and disposal costs of GBP1,004k).
20d) A summary of the gain on disposal of each discontinued operation is as follows:
Global Bump (Worldwide)
Tote Group Inc. Total
Note GBP000 GBP000 GBP000
----- ------------ ----------------- --------
Cash consideration received and receivable 34,127 4,972 39,099
Cash disposed of (3,609) (116) (3,725)
Cash consideration received and receivable
net of cash disposed of 20e 30,518 4,856 35,374
Less:
Costs of disposal 1,086 201 1,287
Net assets disposed of:
Intangibles 6,570 274 6,844
Property, plant and equipment 4,991 210 5,201
Right-of-use assets 761 - 761
Deferred tax assets 26 - 26
Trade and other receivables 4,621 380 5,001
Inventories 2,479 - 2,479
Income tax receivable (38) - (38)
Trade and other payables (2,493) (52) (2,545)
Lease liabilities (786) - (786)
Retirement benefit liability (1,183) - (1,183)
----- ------------ ----------------- --------
14,948 812 15,760
Pre-tax gain on disposal of discontinued
operations 14,484 3,843 18,327
Taxation - - -
----- ------------ ----------------- --------
Gain on disposal of discontinued operations 14,484 3,843 18,327
-----
Costs of disposal include bonuses paid to Group employees of GBP1,068k for Global Tote and GBP167k for Bump.
20e) A summary of the cash consideration received and receivable net of cash disposed of is as follows:
Global Bump (Worldwide)
Tote Group Inc. Total
Note GBP000 GBP000 GBP000
----- ------------ ----------------- -------
Cash consideration received in 2020 6,180 - 6,180
Cash consideration received in H1 2021
net of cash disposed of 20,961 4,856 25,817
Disposal costs paid in H1 2021 (2,297) (124) (2,421)
-----
Net cash received in H1 2021 18,664 4,732 23,396
Cash consideration receivable in H2 2021 3,377 - 3,377
Cash consideration received and receivable
net of cash disposed of and disposal costs
paid in the period 28,221 4,732 32,953
Add back cash disposal costs paid in the
period 2,297 124 2,421
----- ------------ ----------------- -------
Cash consideration received and receivable
net of cash disposed of before disposal
costs paid in the period 20d 30,518 4,856 35,374
----- ------------ ----------------- -------
20f) Reconciliation to profit/(loss) for the period included in the income statement:
Six months Six months
ended ended
30 June 30 June
2021 2020
(Unaudited) (Unaudited) Year
ended
31 December
2020
Note (Audited)
GBP000 GBP000 GBP000
----- ------------- ------------- -------------
Global Tote 20c 19,087 (1,261) (1,356)
Bump 20b 4,244 (540) (1,206)
23,331 (1,801) (2,562)
21. Related party transactions
The extent of transactions with related parties of the Group and the nature of the relationship with them are summarised below.
a. Key management compensation is disclosed below:
Six Six Year
months months
ended ended
30 June 30 ended
June 31 December
2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
GBP000 GBP000 GBP000
---- -------------- -------------- --------------
Short-term employee benefits 722 285 796
Share-based payments 51 51 103
Post-employment benefits 9 - 20
Total 782 336 919
-------------- --------------
22. Contingencies
Contingent items
Tax
The Group's activities in recent periods have resulted in material tax liabilities crystallising. The ultimate tax liability due, in all instances, is subject to a degree of management judgement. The judgements which are made are done so in good faith, with the aim of always paying the correct amount of tax at the appropriate time. Management work diligently with the Group's external financial advisors in quantifying the anticipated accurate and fair tax liability which arises from material one-off events such as the Spot the Ball legal case and the disposal of the Football Pools. Management has an open, transparent and constructive relationship with tax regulators, and engage positively when discussing any difference in legal interpretation between that of the Group and the regulators.
Penalties could potentially be imposed on the Group's corporation tax filing position for the STB VAT refund, however Management consider this possibility to be remote and therefore are not disclosing a contingent liability in relation to this item.
Contingent items are summarised as follows:
M&A activity
Both the 2017 sale of the Football Pools division and the 2018 sale of the Group's Venues business in The Netherlands have customary seller tax warranties under the terms of the Sale and Purchase Agreements. The possibility of material claims being made under the seller tax warranties in either deal is considered by management to be remote. In addition, the 2021 sales of the Bump 50:50 and the Global Tote business have customary seller warranties under the terms of the Sale and Purchase Agreements. Those warranties have been provided in good faith by management in light of the probability of certain events occurring. The possibility of material claims being made under the seller warranties (other than the Irish Subsistence Claim referred to above) in either deal is considered by management to be remote.
Legal
The Group is engaged in certain disputes in the ordinary course of business which could potentially lead to outflows greater than those provided for on the balance sheet. The maximum possible exposure considered to exist, in view of advice received from the Group's professional advisors, is up to GBP0.1m (30 June 2020: GBP0.4m, 31 December 2020: GBP0.5m). Management is of the view that the risk of those outflows arising is not probable and accordingly they are considered contingent items.
23. Post balance sheet events
The following table summarises events which have occurred since the balance sheet date all of which are reference previously in this statement.
Date of
announcement
Event via RNS Description
Admission of Ordinary 28 July Further to the Company's announcement
Shares to trading on 2021 on 4 June 2021, the General Meeting held
AIM on 29 June 2021 and the Schedule 1 and
Schedule 1 Appendix announcements made
on 30 June 2021, the Board confirmed that
the admission of the Company's Ordinary
Shares to trading on AIM occurred at 08.00
a.m. on 28 July 2021. Simultaneously,
the admission of the Company's Ordinary
Shares on the Official List of the Financial
Conduct Authority and to trading on the
Main Market of London Stock Exchange plc
had been cancelled
Proposed Capital Reduction 6 August Proposed Tender Offer to return up to
& Tender Offer 2021 approximately GBP35.5 million to Shareholders
and a Capital Reduction (required in order
to create the distributable reserves necessary
to implement the Tender Offer).
Connecticut Sports Betting 13 August Announcement of an exclusive 10-year commercial
2021 arrangement with the Connecticut Lottery
Corporation ("CLC") which, subject to
required regulatory consents, provides
Sportech Venues Inc., in conjunction with
CLC's sports book provider Rush Street
Interactive (RSI), an ability to deliver
Sports Betting across its retail estate
and promotes CLC's online and mobile channel.
Settlement of lease n/a See note 17
dispute in California
Director Changes 27 August Richard McGuire (CEO) and Tom Hearne (CFO)
2021 will step down from their current roles,
following the release of the Company interim
results on 9 September 2021. Andrew Lindley,
formerly the Group's COO, will become
CEO (and Executive Director) and Nicola
Rowlands will be appointed to CFO (and
Executive Director) from her current position
as Group Financial Controller.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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END
IR MZGGLNRMGMZM
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September 09, 2021 02:00 ET (06:00 GMT)
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