TIDMSPO
RNS Number : 6752G
Sportech PLC
31 March 2022
For immediate release 31 March 2022
SPORTECH PLC
('Sportech', the 'Group' or the 'Company')
Final Results
Sportech, an international betting & technology business, is
pleased to announce its final results for the year ended 31
December 2021.
2021 2020
Continuing operations GBP'000 GBP'000
Revenue 22,942 17,372
--------- ---------
Gross Profit 11,453 8,655
--------- ---------
Adjusted(1) EBITDA (1,783) (4,035)
--------- ---------
Adjusted(1) loss before tax (3,358) (6,533)
--------- ---------
Loss before tax (246) (11,923)
--------- ---------
Profit/(loss) for the year (including from
discontinued operations) 34,563 (12,832)
--------- ---------
Adjusted cash(2) 21,912 16,837
--------- ---------
1. Adjusted profit measures exclude the effects of expenditure
Management believes should be added back (separately disclosed
items), other income and share option charges (see note D of this
announcement).
2. Adjusted cash is cash excluding customer balances but
including cash in entities held for sale (2020 only).
Financial Overview
Continuing operations:
-- Revenues recovered by 32% to GBP22.9 million following strict
COVID-19 restrictions on trading in 2020.
-- Adjusted EBITDA loss of GBP1.8 million (2020: GBP4.0
million), this excludes income from the LEIDSA(3) contract which
was disposed of on 31 December 2021.
-- Loss before tax reduced to GBP0.2 million (2020: GBP11.9 million).
Discontinued operations:
-- Revenues from the LEIDSA contract were GBP3.4 million (2020: GBP2.6 million).
-- LEIDSA adjusted EBITDA grew to GBP2.5 million (2020: GBP1.7
million), representing a recovery to almost 2019 levels following
2020 COVID-19 impact.
-- LEIDSA cash generated in the period from the contract was
GBP0.6 million and net disposal proceeds amounted to GBP9.4 million
(after disposal costs and including a working capital settlement of
GBP0.4.m received in 2022).
-- The Global Tote and Bump 50:50 business disposals agreed in
late 2020 and early 2021 were completed in June 2021 following a
licensing transfer, revenues from the discontinued businesses
accrued to the Group during the periods to completion.
Group:
-- Statutory profit for the year was GBP34.6 million (2020: loss of GBP12.8 million).
-- Cash net of customer balances was GBP21.9 million (2020:
GBP16.8 million, also including cash held by assets held for
sale).
-- Capex related to continuing operations was GBP0.2 million
(2020: GBP0.3 million) and to discontinued operations GBP1.4
million (2020: GBP2.1 million).
GROUP DEVELOPMENTS
-- Disposals: The Group completed agreements entered into in
late 2020 and early 2021, to sell (a) the Global Tote Business to
BetMakers Technology Group Limited; (b) Bump 50:50 to Canadian Bank
Note Company Limited, and (c) a freehold property in New Haven,
Connecticut ("CT"). It also entered into and completed the sale of
the terrestrial lottery contract with Lotteria Electronica
Internacionale Dominica S.A ("LEIDSA") in the year. In aggregate
providing a net cash of GBP47.4 million to the Group.
-- Corporate: In August, the Group moved its listing from the
Main Market to the Alternative Investment Market ("AIM"), which the
Board believed was a more appropriate venue for the Group's reduced
size. In October, the Group returned GBP35.5m of cash to investors
through a tender offer, reducing the shares in issue from 189m to
100m.
-- Venues: COVID-19 continued to impact the business through the
majority of 2021 resulting in a 28% decline in total retail betting
handle versus 2019. The focus on cost management to de-risk the
business through the period continued.
-- Sports Betting: The Venues business in Connecticut was
ultimately left out of the grant of sports betting licences by the
State of Connecticut, which was a huge disappointment to the Group.
The State issued 10-year licences to the two tribal casinos and the
Connecticut Lottery Corporation ("CLC"). The latter being exclusive
for retail sports betting on non-tribal lands. Sportech agreed a
deal in August 2021 to become a distributor for CLC, offering
sports wagering at each of its venues, and the first bets were
taken at the end of October 2021.
-- Advanced Deposit Wagering: The MyWinners.com site is an
element of the Venues business serving CT residents with online
pari-mutuel wagering. 123Bet.com operates under an Oregon licence
and is able to provide the same offering to customers in multiple
other States across the USA. Both businesses saw growth as the
COVID-19 restrictions in 2020 limited betting at physical venues,
and that level of trading has been maintained throughout 2021.
-- Lottery: Work with LEIDSA to deliver their online retail
proposition in the Dominican Republic, which will eventually be
operated by Inspired under a royalty bearing licence, was started
in the third quarter of 2021.
3. Loteria Electrónica Internacional Dominicana S.A.
Andrew Lindley, Chief Executive Officer of Sportech, said:
"2021 was a transitional year for the business with the
completion of a significant amount of M&A and corporate actions
to reduce the size of the business and de-risk our shareholders'
investments. The business, although now small in the context of a
plc, is tidy and fit for growth. The two divisions are right-sized
for their operations and 2022 brings with it an attendant
opportunity to garner new value for the Group and its
shareholders."
Analyst briefing:
The analyst presentation will be available on the Company
website https://www.sportechplc.com/investors/results/ . Management
is available as required for analyst and investor meetings;
requests should be made via Peel Hunt.
Contacts:
Sportech PLC
Andrew Lindley, Chief Executive Officer i r@ sportech. net
Nicola Rowlands, Chief Financial Officer
Peel Hunt (Corporate Broker and NOMAD Tel: +44 (0) 20 741 8 8900
to Sportech)
George Sellar / Andrew Cl ark / Lalit
Bose
Forward-looking statements This announcement contains certain
statements that are forward-looking statements. They appear in a
number of places throughout this announcement and include
statements regarding our intentions, beliefs or current
expectations and those of our officers, directors and employees
concerning, amongst other things, results of our operations,
financial condition, liquidity, prospects, growth, strategies and
the business we operate. These forward-looking statements include
all matters that are not historical facts. By their nature, these
statements involve risks and uncertainties since future events and
circumstances can cause results and developments to differ
materially from those anticipated. Any such forward-looking
statements reflect knowledge and information available at the date
of preparation of this announcement. Other than in accordance with
its legal or regulatory obligations (including under the Market
Abuse Regulation (596/2014), as it applies in the UK), the Company
undertakes no obligation to update or revise any such
forward-looking statements. Nothing in this announcement should be
construed as a profit forecast. The Company and its directors
accept no liability to third parties in respect of this
announcement save as would arise under English law.
Notes to Editors:
About Sportech
Sportech is a technology supplier and operator in the gambling
market with two core businesses: A digital omni channel platform
for gaming verticals including its own in-house lottery module as
its B2B offering. In B2C, the Company operates Sports Bars and
other venues in the State of Connecticut USA where it deploys its
exclusive licence to offer pari-mutuel wagering in the State and a
distribution agreement with the Connecticut Lottery Corporation to
offer sports betting in the State. It also has the exclusive
licence to operate pari-mutuel betting online in Connecticut, which
it does under the MyWinners.com brand, and a general licence for
pari-mutuel betting online across the wider USA under the
123Bet.com brand.
Operating Review
2021 was another difficult year coloured by the long tail of the
global pandemic and challenging trading for businesses operating
leisure premises.
At the end of 2020 and in early 2021, the Group had entered into
contracts for the sale of two significant divisions - Sportech
Racing & Digital (Global Tote) and Bump 50:50. Those contracts
were contingent upon licences being granted by the many gambling
regulatory bodies that the businesses operated under and made for a
protracted period between signing and closing the deals in June
2021. Over the period, the Group retained the people and
infrastructure to service those businesses but with the
finalisation of the disposals, was able to resize accordingly. The
move from the Main Market to AIM was made in July and the corporate
structure was resized with Richard McGuire and Tom Hearne both
stepping down from their respective leadership roles. Sportech is
very thankful for Richard and Tom's significant contributions in
reshaping the business over their tenures and leaving Sportech lean
and fit for the continuing journey to cash generation.
Following completion of the two deals, the transfers of the
businesses were executed in an orderly fashion with transitional
services being carried-on to support the remaining business through
to the end of the year whilst the core teams in Sportech were
reshaped. The Group is consequently now "right-sized" for the
operations going into 2022.
Additionally, in October the Group completed a return of capital
back to shareholders that delivered GBP35.5m of the tangible value,
created by the disposals in the year.
A focus on maintenance of cash remains a core metric but the
Venues business is, with sports included, in a period of change
with busier operations and a new and additional crowd of patrons to
service. Moreover, the United States as a whole remains a land of
new opportunity in the gambling sector as sports betting continues
to enter the pantheon of entertainment State by State. Sportech, as
a participant with a significant USP in its Venues business, has
the ability both to seize the immediate opportunities in
Connecticut and demonstrate its skills in doing so to position
itself for other opportunities which may arise across the rest of
the country. Accordingly, there will be extra focus on operational
efficiency and service to ensure that the value of this USP is
maximised.
The Venues business traded below the results of 2019 through the
pandemic hit years of 2020 and 2021, so the first challenge for
2022 will be to recover that ground as the world recovers. Albeit
five venues were permanently closed through 2020 and 2021, so the
overall handle target will be lower than the full 2019 figure with
the correct comparator being the like for like venues total. In
2019, for the remaining like for like venues, pari-mutuel handle
was $96.1m and in 2021 was $89.7m (2020: $56.1m). Food and beverage
revenues were $5.6m in 2019 and $2.9m in 2021 (2020: $1.9m). Sports
betting has no comparator but handle in December was $6.5m and
growing on a trajectory that could see it mature to levels similar
to those of pari-mutuel handle in the short to medium term. The
pari-mutuel and food and beverage sales had begun to measure up to
those of 2019 in the last two months of 2021 and although 2022 did
not start well with the Omicron surge hitting America at that time,
the business remains positive for a full recovery in 2022.
Early in the year, Venues also completed the sale of its 'Sports
Haven' property in Connecticut; a 40,000 sq. ft. concrete building
of 1960s build that requires redevelopment. This delivered GBP4.2m
of cash and was another element of the October return of cash to
shareholders. With the leaseback of the property ending in Q4 2022,
it is expected that the business will move out of the property to a
new venue in the vicinity and in doing so will create the blueprint
for a future model for the Venues business.
The online elements of the business traded above the 2019
numbers in 2020 and continuing in 2021; this being aided by the
pandemic as the locked-down population went online to resume their
leisure. The Group continued to invest in the digital opportunities
to drive acquisition and stickiness and in the coming year will
look to improve its platform offer to further capitalise on the
gains made; this part of the overall strategy assisted the
profitability of the Group again during 2021, delivering $22.8m
handle, translating to $2.0m contribution.
The UK based digital technology team worked for the first half
of 2021 on the delivery of a digital pari-mutuel solution for an
Asian customer of the now sold Racing & Digital division and
moved on post-sale to create a digital lottery platform for the
Dominican Republic customer. The Dominican Republic business was
sold on the very last day of 2021 to Inspired Entertainment Inc.
("Inspired") and the team will continue to work with Inspired, as a
third-party supplier, to deliver a digital solution to the
customer; this will bring a royalty revenue stream and a
strengthened platform offer to the business once launched.
The disposal of the business in the Dominican Republic also
secured GBP9.4m of free cash that increased the total cash in hand
at the end of the year to GBP21.9m (with an additional GBP0.4m of
working capital adjustment to be received in Q1 2022). Some of that
cash is earmarked to clear down legacy liabilities of the Group
including a potential tax liability relating to the Football Pools
business and an onerous lease in California. Free cash then, will
be circa GBP11m and it is expected that some of the value created
by the disposal will be returned to shareholders in the 2022.
During 2021, capital and net cash position were considered more
crucial metrics than EBITDA due to the uncertain trading position.
Capex was kept low at GBP1.6m for both the continuing and
discontinued business (including capitalised software costs of
internal staff of GBP1.3m) and one of the costlier venues located
in Bridgeport was closed, improving efficiency in CT. The return of
cash reduced the liquid reserves of the Group, but to a comfortable
level within the context of uncertain trading, with the future of
the pandemic far from clear. Any further return will be made with a
sufficient buffer in mind to counter a resurgence of COVID-19 and
continue to optimise both divisions.
As the Group transitions through 2022, revenues and
profitability will return to the fore as key metrics. The tail of
legacy issues that affect the difference between cash held and
'free cash' on the balance sheet will be addressed and the
liabilities settled to provide a clean company and reduce needless
distraction. Whilst being mindful of events unfolding in Ukraine
and our thoughts are with those affected, Sportech itself is not
directly affected by economic and legal actions being taken in
response to the crisis. However, the Group will monitor the ripple
effects on prices and supply chains which will likely impact the
businesses to some degree.
It is difficult to provide accurate guidance on the future
outlook given the uncertainty of speed of recovery and the short
history of sports betting in Connecticut so far. However,
management are confident that trade is recovering and that a good
rate of handle and growth is being experienced in the new sports
product and that the business will meet market expectations.
DIVISIONAL SUMMARIES
SPORTECH VENUES
Sportech Venues offers legal betting across the State of
Connecticut; (a) pari-mutuel betting on horseracing, greyhound
racing and jai alai through both online and venue-based operations
under an exclusive and perpetual licence and, (b) sports betting
under a distributorship type arrangement with the Connecticut
Lottery Corporation. The venues operations are of two distinct
types; (a) Sports Bar/Restaurants which offer a main-steam
leisure-based experience where betting is an exciting additional
customer attraction, and (b) Off-Track Betting (OTB) shops, which
are dedicated primarily to retail gambling operations albeit with
some light refreshments and other products.
Constant
currency
GBP'000 2021 2020
Wagering revenue 19,515 14,796
Commission from sports betting 280 -
Food and beverage revenue 2,115 1,401
-------- ----------
Total revenue 21,910 16,197
Contribution 10,769 7,734
Contribution margin 49.2% 47.7%
Adjusted operating expenses (9,149) (8,682)
-------- ----------
Adjusted EBITDA 1,620 (948)
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Capex 27 27
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Developments during the year
COVID-19 continued to affect the business for the entire year
with closures of venues abundant across the year and facemasks
being removed in all Connecticut counties only during December 2021
(immediately prior to the Omicron surge) impacting footfall
generally for the full year.
Staffing and food and beverage stocks were carefully managed to
reduce the impact of wasted cost, but central costs and rents were
more difficult to keep in line with trading, and therefore, the
impact of COVID-19 on the overall profitability of the Venues
operation was high.
Internet traffic was increased as a result of COVID-19, albeit
not sufficiently to negate the entire impact on the terrestrial
business, however handle has remained trading at 35.3% above 2019
levels through additional marketing and closer management of
individual customers.
During March 2021, the State of Connecticut approved new laws on
gaming for the state with the inclusion of grants of sports betting
licences; something Sportech had been campaigning to be a part of
for a number of years. Unfortunately, Sportech was not included in
the grants, which were secured only by the two tribal nations in
Connecticut (for online betting across the state and terrestrial
betting limited to their tribal lands) and the Connecticut Lottery
Corporation ("CLC"), itself an emanation of the state (for online
betting and terrestrial betting across the state). This was
obviously a massive blow for the business and Sportech was
considering its response to its legitimate expectation to be
considered for a licence when the opportunity to participate in
sports betting was offered by CLC. The deal struck delivered
Sportech Venues the right to participate in the new sports betting
product that it had been waiting for as a commission-based
distributor for CLC, as well as a small share of CLC's online
revenues to recognise the link between terrestrial and online
participation. Crucially, any need for lengthy, costly and
potentially risky litigation relating to the administrative
decision of the state was averted.
The team readied the venues for launch within a month of the CLC
deal, which was signed in August, and CLC's licences were granted
at the end of October when Sportech took its first sports bets in
the Stamford venue. Roll out to all venues continued into November
and by the third week of the month all venues (except Norwalk,
which will not take sports bets due to local restrictions) were
trading sports.
$4.2m of sports betting handle was taken through November 2021,
following which total sports handle increased by over $2m per month
through to the end of January 2022, which marked the end of NFL
season. Trading thereafter has levelled off in line with
expectations (as January was the anticipated high watermark for the
initial surge in sports betting). Venues' footfall has increased
considerably, particularly in the bar / restaurants which are
notably busier with a demographic shift toward younger sports
betting patrons.
The handle to profit ratio from sports is poorer than those
obtained from pari-mutuel as Sportech are only entitled to a share
of CLC's profits as the distributor, however, it provides another
strong vertical and attracts new patronage to the venues that is
not limited to the sports products and therefore leverages both the
existing products with new sales and existing cost base with new
revenues, and thus synergises the entire operation.
Looking forward
Sport and capturing the revenues of its followers is clearly the
key mantra for the future of the Venues business and we expect the
shape of the business to change as this product beds in.
The immediate signs of improvement in the venues are strongest
in the bar / restaurant formats where the sports patron demographic
is the primary target audience. The management team will therefore
be assessing the development of this trend throughout the year and
planning for optimisation of the mix of formats and locations of
venues to better capture the sports market without detraction from
the mainstay earnings of pari-mutuel betting.
The freehold property in New Haven Connecticut (known as "Sports
Haven") was sold during the year and a lease through to the last
quarter of 2022 has kept operations there. It is expected that
Sports Haven will close in the year and a new bar/restaurant will
be opened locally to replace it (along with offices to house
management and support staff). The result will be the most up to
date iteration of the bar / restaurant in the estate and will
capitalise on the learnings of the others and potentially provide a
blueprint for any future investment in the business.
SPORTECH DIGITAL
Sportech Digital now encompasses the two digitally focused,
small, non-CT based businesses of (a) a US facing B2C trading
operation in the form of 123Bet.com, which was previously a
white-label customer of the discontinued Racing and Digital
business and was brought in-house in 2019, and (b) a B2B operation
based in Chester, UK, that faces markets worldwide with an
ultra-modern and proprietary platform for lottery management that
can also integrate and manage any other gambling vertical.
123Bet.com continues to grow, operating with thin management and
marketing budgets derived from its own profits. It has had success
relative to its size and is ready for the offer to be refreshed and
the business taken to the next stage of growth.
The Chester team is pursuing opportunities primarily in the
lottery space with private and national lotteries to develop the
business, drawing on the Sportech brand and legacy along with our
new range of products and digital expertise to offer enhanced
lottery capabilities.
Constant
currency
GBP'000 2021 2020
Services revenue 1,032 295
Contribution 408 211
Contribution margin 39.5% 71.5%
Adjusted operating expenses (987) (984)
------- ----------
Adjusted EBITDA (579) (773)
------- ----------
Capex 169 230
------- ----------
Developments during the year
The Dominican Republic (LEIDSA) lottery supply contract was sold
during the year. The Chester team has worked in the year to develop
an online sales platform for the LEIDSA client with local
capabilities. It continues to do so, with Inspired Entertainment
(the buyer), and will licence the delivered product to Inspired who
will manage it post-delivery and pay a royalty for doing so.
123Bet.com has maintained significant traction that it enjoyed
during the beginnings of the pandemic when it saw an influx of
players from Puerto Rico whilst the local cash betting venues were
closed.
Looking forward
The Board will continue to evaluate both businesses and seek
opportunities to build on their foundations and enhance the
products through innovation, collaboration and/or investment.
GROUP OUTLOOK
Tentatively, the pandemic that so tested our organisation (and
the world) may peter out in 2022 and provide everyone in Sportech
with new purpose in a reinvigorated business.
The Board's core strategies are clear in taking the current
opportunities in Connecticut, looking at corporate and trading
opportunities to create value, reducing costs and returning cash to
shareholders.
The way forward is clear and simple, and the Board and
management remain fully engaged and focused on delivering these
objectives through 2022.
Financial Review
Income Statement - Detailed View
Restated Constant
Reported Currency
GBP'000 2021 2020(2) 2020
Service revenue 20,547 15,900 15,091
Sports betting commission 280 - -
F&B revenue 2,115 1,472 1,401
Total revenues 22,942 17,372 16,492
Cost of sales (11,489) (8,717) (8,276)
--------- ---------- ----------
Gross profits 11,453 8,655 8,216
Marketing and distribution costs (276) (311) (281)
--------- ---------- ----------
Contribution 11,177 8,344 7,935
Contribution margin % 48.7% 48.0% 48.1%
Adjusted operating expenses(3) (12,960) (12,379) (11,791)
Impact of FX on reported earnings - - (179)
--------- ---------- ----------
Adjusted EBITDA (1,783) (4,035) (4,035)
----------
Separately disclosed items (1,101) (229)
Other income 4,101 -
Non-cash items:
Share option charges (334) (347)
Depreciation (982) (1,621)
Impairment of property, plant and equipment - (4,349)
Reversal of impairment of property, plant
and equipment 335 -
Amortisation (129) (276)
Amortisation of acquired intangibles (509) (509)
Total - non-cash items (1,619) (7,102)
--------- ----------
LBIT (402) (11,366)
Net finance income/(charges) 156 (557)
--------- ----------
LBT (246) (11,923)
Taxation - continuing operations (192) 1,055
--------- ----------
Result after taxation - continuing operations (438) (10,868)
Result after taxation - discontinued operations 35,001 (1,964)
--------- ----------
Profit/(loss) for the year 34,563 (12,832)
--------- ----------
Adjusted loss before tax for the year from
continuing operations (1) (3,358) (6,533)
--------- ----------
1. Adjusted loss before tax for the year from continuing
operations is the aggregate of adjusted EBITDA, share option
charges, depreciation, amortisation (excluding amortisation of
acquired intangibles), and certain finance charges (see note D for
reconciliation).
2. Prior year comparatives have been restated to exclude the
results of the LEIDSA contract which have been included with the
results of the Global Tote business and Bump 50:50 within
profit/(loss) after taxation - discontinued operations.
3. Adjusted operating expenses exclude depreciation,
amortisation, impairments and reversal of impairments, share option
charges, other income and separately disclosed items.
Revenue - continuing operations
Restated Constant
Reported Currency
GBP'000 2021 2020 2020
Wagering revenue 19,515 15,596 14,796
Sports betting commission 280 - -
F&B revenue 2,115 1,472 1,401
------- ---------- ----------
Total Sportech Venues 21,910 17,068 16,197
------- ---------- ----------
Total Sportech Digital 1,032 304 295
------- ---------- ----------
Total revenues 22,942 17,372 16,492
------- ---------- ----------
Revenue from continuing operations increased by 39% on a
constant currency basis. In Venues, the land-based operation was
shuttered for over three months in the prior year and had venue
capacity restrictions imposed from July 2020 through most of 2021,
as well as mask mandates and work from home orders in place in the
State of Connecticut. However, despite the restrictions, revenue
recovered to near 2019 levels. The online revenue in Connecticut
fell by 5% in 2021 from 2020 but was up 35% on 2019, having
maintained customers who migrated from in person to online wagering
during 2020.
Adjusted EBITDA - continuing operations
Restated Constant
Reported currency
GBP'000 2021 2020 2020
Sportech Venues 1,620 (1,085) (948)
Sportech Digital (579) (762) (773)
Central costs (2,564) (1,927) (1,890)
-------- ---------- ----------
Adjusted EBITDA before sports betting investment (1,523) (3,774) (3,611)
Sports betting investment (260) (261) (245)
Adjusted EBITDA (1,783) (4,035) (3,856)
-------- ---------- ----------
Sportech Venues largely recovered in 2021 from the strict
restrictions which were in place in 2020. Cost reductions
implemented in 2020 were maintained wherever possible which also
contributed to the EBITDA recovery. Costs were reduced in the
Digital division as well as revenue growing from 123Bet.com,
contributing to the reduced EBITDA loss. Central costs increased
due to a significant increase in Directors and Officers insurance
which was experienced market wide.
Sports Betting investment represents the lobbying costs the
Group has incurred 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.
Discontinued operations
In addition to the Global Tote and Bump 50:50 businesses, whose
disposals were agreed on 24 December 2020 and 31 January 2021,
respectively and were held for sale as at 31 December 2020, the
Group also agreed and completed the disposal of its contract with
LEIDSA (Dominican lottery) on 31 December 2021.
All three disposals were completed by 31 December 2021 and all
consideration was received apart from the net working capital
settlement for LEIDSA (GBP0.4m, received in Q1 2022). The disposals
signal a departure from major business lines in which the Group
previously operated. Accordingly, they have been treated as
discontinued operations, in accordance with IFRS 5, in these
financial statements.
The table below shows the results of the discontinued
operations.
Global Bump Global Bump
Tote 50:50 LEIDSA Total Tote 50:50 LEIDSA Total
GBP'000 2021 2021 2021 2021 2020 2020 2020 2020
Revenue 12,245 810 3,364 16,419 25,052 703 2,594 28,349
Costs (8,140) (487) (913) (9,540) (19,525) (1,598) (857) (21,980)
------------------------ -------- ------- ------- -------- --------- -------- ------- ---------
Adjusted EBITDA 4,105 323 2,451 6,879 5,527 (895) 1,737 6,369
Depreciation
and amortisation - - (372) (372) (5,083) (291) (381) (5,755)
Profit on sale
of assets 68 - 47 115 - - - -
Other income 1,057 - - 1,057 - - - -
Separately disclosed
items (371) - - (371) (1,159) (65) - (1,224)
Finance (costs)/income (24) 78 - 54 (113) 45 - (68)
------------------------
Profit/(loss)
before tax 4,835 401 2,126 7,362 (828) (1,206) 1,356 (678)
Taxation (195) - (791) (986) (528) - (758) (1,286)
------------------------ -------- ------- ------- -------- --------- -------- ------- ---------
Profit/(loss)
after tax 4,640 401 1,335 6,376 (1,356) (1,206) 598 (1,964)
------------------------ -------- ------- ------- -------- --------- -------- ------- ---------
The trading from the discontinued operations through to disposal
date accrued to the Group which benefited the Group's cash
position. The above disclosures for Global Tote and Bump 50:50
differ from those disclosed in the half year accounts following
additional information becoming available after the approval of the
Interim Report, a reconciliation will be provided in the 2022
Interim Report.
In addition to the discontinued operations above, the disposal
of our New Haven freehold property in Connecticut, USA for
consideration of circa GBP4.3m (US$6.0m) was completed on 28 April
2021. The sale and purchase agreement included a leaseback clause,
whereby Sportech shall lease back the property for a period not to
exceed 18 months from the date of closing. The lease has a monthly
rental of circa GBP36k (US$50k) per month. The profit on disposal
of GBP2,575k has been recorded within other income in the income
statement.
Separately disclosed items
Reported
GBP'000 2021 2020
Included in operating costs - continuing operations
Onerous contract provisions and other losses resulting
from exit from Californian operations 91 -
Restructuring and redundancy costs 625 -
Corporate activity costs 21 118
Costs in relation to Spot the Ball VAT refund 10 44
Costs in relation to exiting the Group's interests
in India 13 65
Costs in relation to the Group's move to AIM 341 -
UK defined pension scheme buy-out - 2
------- ---------
1,101 229
------- ---------
Discontinued operations
Included in operating costs 371 1,224
Included in finance costs - continuing operations
Interest accrued on corporate tax potentially due
and unpaid at the balance sheet date on STB refund
received in 2016 150 150
Interest paid on VAT settlement reached in 2020 - 83
------- ---------
150 233
------- ---------
1,622 1,686
------- ---------
The Group continues to focus on resolving legacy issues and
reducing ongoing separately disclosed items. The Group's lease
issues in California have been resolved in the year and in early
2022. The Group has been resized to reflect the reduced operations
following the disposals in the year and in response has moved its
listing from the Main Market to AIM during the year.
Other income
Other income includes the profit on disposal of Sports Haven
(GBP2,575k), credits received against the US payroll through the
CARES Act as amended on 27 December 2020 (GBP1,426k in continuing
operations and GBP1,057k in discontinued operations) and a contract
settlement (GBP100k). All have been excluded from Adjusted EBITDA
due to the one-off nature of the credits and the fact the amounts
would distort comparability of the results of 2021 when analysing
underlying performance.
Taxation
The current tax expense for the year in continuing activities
was GBP239k being mainly state taxes payable in the US. The
deferred tax credit for the year was GBP47k within continuing
activities; relating to the recognition of timing differences in
the US on the Group's former joint venture in California net of
deferred tax liability release on acquired intangibles. The Group
continues to not recognise deferred tax assets on gross timing
differences of GBP14,225k (2020: GBP35,745k), GBP12,016k being in
the US and GBP2,209k being in the UK. A significant amount of the
timing differences were utilised in the year against profits on
disposal in the US meaning no tax was payable of those
disposals.
Tax paid in the year of GBP105k in continuing operations is
mainly taxes in the US both federal and state, a further GBP924k
was paid by discontinued operations, being mainly withholding taxes
in the Dominican Republic. A tax refund of GBP1,442k was received
in February 2021 in relation of overpaid prior year UK taxes in
relation to the disposal of the Football Pools.
The Group's current tax liability includes a provision for
uncertain tax liabilities of GBP4.6 million in relation to
corporation tax on the 2016 VAT refund. The Group is working with
HMRC to resolve the issue. The balance is US taxes payable for
2021.
Cash flow
The Group's cash flow for the year is as follows (including
discontinued operations):
GBP'000 2021 2020
Adjusted EBITDA - continuing operations (1,783) (4,035)
Adjusted EBITDA - discontinued operations 6,879 6,369
--------- --------
Total Adjusted EBITDA 5,096 2,334
Payment of lease liabilities including interest (1,512) (1,655)
--------- --------
EBITDA after lease payments 3,584 679
Net proceeds from disposal of Sports 4,193 -
Add: Haven
Net proceeds from disposal of Global
Tote 22,786 6,180
Net proceeds from disposal of Bump 4,644 -
50:50
Net proceeds from disposal of LEIDSA 9,417 -
contract
Other Acquisition, disposal, and
Less: JV items - (500)
Capitalised software (1,012) (1,650)
Property plant and equipment (net
of proceeds from sales) (582) (753)
Separately disclosed items and
other income (net) 76 (484)
Working capital and other (2,418) 1,552
Tax received net of tax paid and
net interest received 438 (1,100)
Share buy-back including expenses (35,880) -
FX impact (171) (72)
--------- --------
Net cash flows
in year 5,075 3,852
Opening cash, excluding customer balances 16,837 12,985
--------- --------
Closing cash, excluding customer
balances 21,912 16,837
--------- --------
Net cash inflow (excluding movement in customer balances) in the
year was GBP5,075k. Total proceeds from disposals in the year net
of cash disposed of and disposal costs was GBP41,040k with
GBP6,180k having been received late in 2020 on account, bringing
the total net cash in of GBP47,220k. Capex in the year was reduced
following the disposal of Global Tote and Bump 50:50. Other income
includes inflows for CARES Act credits of GBP2,483k after the US
Federal Government amended the legislation from mid-2020 to make it
more wide ranging and enabling the Group to claim credits for 2021
US payroll. Net tax received of GBP413k was a tax refund of
GBP1,442k net of tax paid of GBP1,029k, and net interest received
was GBP25k.
Finally, a significant amount of the disposal proceeds received
in the year were distributed to shareholders in a tender offer
which completed in October 2021, following a Court Approved
reduction of capital process to create distributable reserves in
the Sportech PLC company, by cancelling its capital redemption
reserve of GBP10.3m and reducing the nominal value of each share
from 20p to 1p.
Consolidated Income Statement
f o r t he y ear end ed 31 De c e m ber 2021
Restated
2021 2020
Note GBP000 GBP000
Revenue E 22,942 17,372
Cost of sales E (11,489) (8,717)
--------- ---------
Gross profit E 11,453 8,655
Marketing and distribution costs E (276) (311)
--------- ---------
Contribution E 11,177 8,344
Operating costs D (15,680) (19,710)
Other income X 4,101 -
Operating loss (402) (11,366)
Finance costs G (305) (568)
Finance income G 461 11
Loss before tax from continuing operations (246) (11,923)
Tax - continuing operations H (192) 1,055
--------- ---------
Loss for the year - continuing operations (438) (10,868)
Profit/(loss) after taxation from discontinued
operations I(g) 35,001 (1,964)
--------- ---------
Profit/(loss) for the year 34,563 (12,832)
--------- ---------
Attributable to:
Owners of the Company 34,563 (12,832)
Basic (loss)/earnings per share attributable to
owners of the Company
From continuing operations J(a) (0.3)p (5.8)p
From discontinued operations J(a) 20.6p (1.0)p
--------- ---------
Total J(a) 20.3p (6.8)p
--------- ---------
Diluted (loss)/earnings per share attributable
to owners of the Company
From continuing operations J(b) (0.3)p (5.8)p
From discontinued operations J(b) 20.6p (1.0)p
--------- ---------
Total J(b) 20.3p (6.8)p
--------- ---------
Adjusted loss per share attributable to owners
of the Company
Basic J(c) (1.7)p (2.8)p
Diluted J(c) (1.7)p (2.8)p
See note D for a reconciliation of the above statutory income
statement to the adjusted performance measures used by the Board of
Directors to assess divisional performance.
Prior year comparatives have been restated to exclude the
results of the LEIDSA contract which have been included with the
results of the Global Tote business and Bump 50:50 within
profit/(loss) after taxation from discontinued operations.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2021
2021 2020
GBP000 GBP000
Profit/(loss) for the year 34,563 (12,832)
Other comprehensive (expense)/income:
Items that will not be reclassified to profit
and loss
Actuarial gain/(loss) on retirement benefit liability
- discontinued operations 186 (344)
Deferred tax on movement on retirement benefit
liability - discontinued operations - 88
-------- ---------
186 (256)
Items that may be subsequently reclassified to
profit and loss
Currency translation differences - continuing
operations (617) 237
Currency translation differences - discontinued
operations (550) (314)
Less: gain reclassified to profit and loss on (3,373) -
disposal of foreign operations
-------- ---------
(4,540) (77)
Total other comprehensive expense for the year,
net of tax (4,354) (333)
Total comprehensive income/(expense) for the
year 30,209 (13,165)
-------- ---------
Attributable to:
Owners of the Company 30,209 (13,165)
-------- ---------
Consolidated Balance Sheet
As at 31 December 2021
2021 2020
Note GBP000 GBP000
ASSETS
Non-current assets
Goodwill K 604 604
Intangible fixed assets L 6,357 7,343
Property, plant and equipment M 4,261 5,077
Right-of-use assets N 4,657 1,133
Trade and other receivables O 158 156
Deferred tax assets P - 4
--------- ---------
Total non-current assets 16,037 14,317
--------- ---------
Current assets
Trade and other receivables O 1,750 1,517
Inventories Q 124 120
Current tax receivable H - 1,442
Cash and cash equivalents R 22,367 11,821
--------- ---------
24,241 14,900
Assets classified as held for sale - 27,671
--------- ---------
Total current assets 24,241 42,571
--------- ---------
TOTAL ASSETS 40,278 56,888
--------- ---------
LIABILITIES
Current liabilities
Trade and other payables S (7,945) (14,104)
Provisions T (736) (321)
Lease liabilities U (923) (823)
Deferred tax liabilities P - (94)
Current tax liabilities H (4,718) (4,700)
(14,322) (20,042)
Liabilities directly associated with assets classified
as held for sale - (7,507)
--------- ---------
Total current liabilities (14,322) (27,549)
--------- ---------
Net current assets 9,919 15,022
--------- ---------
Non-current liabilities
Lease liabilities U (6,091) (3,059)
Deferred tax liabilities P (43) -
Provisions T - (1,121)
--------- ---------
Total non-current liabilities (6,134) (4,180)
--------- ---------
TOTAL LIABILITIES (20,456) (31,729)
--------- ---------
NET ASSETS 19,822 25,159
--------- ---------
EQUITY
Ordinary shares V 1,000 37,750
Other reserves 3,527 16,539
Retained earnings 15,295 (29,130)
--------- ---------
TOTAL EQUITY 19,822 25,159
--------- ---------
Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
Other reserves
Capital Foreign
Ordinary redemption Other exchange Retained
shares reserve reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2021 37,750 10,312 (638) 6,865 (29,130) 25,159
Comprehensive income
Profit for the year - - - - 34,563 34,563
Other comprehensive items
Actuarial gain on defined benefit
pension liability* - - 186 - - 186
Cumulative actuarial loss on
defined benefit
pension liability disposed
of, transferred to
retained earnings - - 766 - (766) -
Currency translation differences
arising in
the year - - - (4,540) - (4,540)
Total other comprehensive items - - 952 (4,540) (766) (4,354)
----------- -------------- --------- ---------- ---------- ---------
Total comprehensive items - - 952 (4,540) 33,797 30,209
----------- -------------- --------- ---------- ---------- ---------
Transactions with owners
Share option charge - - - - 334 334
Cancellation of capital redemption
reserve - (10,312) - - 10,312 -
Capital reduction (note V) (35,862) - - - 35,862 -
Fees in relation to capital
reduction (note V) - - - - (66) (66)
Fees in relation to share buy-back
(note V) - - - - (314) (314)
Share buy-back (note V) (888) 888 - - (35,500) (35,500)
Total transactions with owners (36,750) (9,424) - - 10,628 (35,546)
----------- -------------- --------- ---------- ---------- ---------
Total changes in equity (36,750) (9,424) 952 (4,540) 44,425 (5,337)
----------- -------------- --------- ---------- ---------- ---------
At 31 December 2021 1,000 888 314 2,325 15,295 19,822
----------- -------------- --------- ---------- ---------- ---------
Other reserve includes the premium on shares issued of GBP314k
in relation to the acquisition of Lot.to Systems Limited in 2019,
which is recorded as a merger reserve.
* Net of deferred tax.
Consolidated Statement of Changes in Equity
for the year ended 31 December 2020
Other reserves
Capital Foreign
Ordinary redemption Other exchange Retained
shares reserve reserve reserve earnings Total
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
--------- ------------ --------- ---------- ---------- ---------
Other reserve includes the premium on shares issued of GBP314k
in relation to the acquisition of Lot.to Systems Limited in 2019,
which is recorded as a merger reserve and cumulative actuarial
movements on defined benefit pension schemes net of deferred
tax.
* Net of deferred tax.
Consolidated Statement of cash flows
for the year ended 31 December 2021
2021 2020
Note GBP000 GBP000
Cash flows from operating activities
Cash generated from operations, before separately
disclosed items W 511 3,928
Interest received - 13
Interest paid - (84)
Tax refund received H 1,442 -
Tax paid H (1,029) (1,029)
--------- --------
Net cash generated from operating activities
before separately disclosed items 924 2,828
Cash inflows - other income X 2,483 -
Cash outflows - separately disclosed items F (2,407) (484)
--------- --------
Cash generated from operations 1,000 2,344
--------- --------
Cash flows from investing activities
Disposal of Sports Haven (net of transaction
costs) 4,193 -
Disposal of Bump 50:50 (net of cash disposed
of and transaction costs) 4,644 -
Consideration paid for Lot.to Systems Limited,
net of cash acquired - (500)
Disposal of LEIDSA contract (net of cash disposed
of and transaction costs) 9,417 -
Disposal of Global Tote (net of cash disposed
of and transaction costs) 22,636 6,180
Proceeds from sale of intangible assets M 150 -
Investment in intangible fixed assets L (1,012) (1,650)
Purchase of property, plant and equipment M (582) (753)
Net cash generated from investing activities 39,446 3,277
Cash flows used in financing activities
Principal paid on lease liabilities U (1,333) (1,316)
Interest paid on lease liabilities (179) (339)
Share buy-back including transaction costs V (35,880) -
Interest received 27 -
Interest paid (2) -
Cash used in financing activities (37,367) (1,655)
--------- --------
Net increase in cash and cash equivalents 3,079 3,966
Effect of foreign exchange on cash and cash
equivalents (171) (72)
Cash and cash equivalents at the beginning of
the year R 11,821 15,565
Opening cash included in asset held for sale
and excluded from cash and cash equivalents 7,638 -
--------- --------
Cash and cash equivalents at the end of the
year R 22,367 19,459
Less cash held by assets held for sale - (7,638)
--------- --------
Group cash and cash equivalents at the end of
the year 22,367 11,821
Represented by:
Cash and cash equivalents R 22,367 11,821
Less customer funds R (455) (465)
--------- --------
Adjusted net cash at the end of the year R 21,912 11,356
--------- --------
Notes to the Final Statement
For the year ended 31 December 2021
All accounting policies applied in this Preliminary Statement
are consistent with those in the full financial statements which
have yet to be published. The preliminary results for the year
ended 31 December 2021 were approved by the Board of Directors on
31 March 2022. The financial information set out in this
announcement does not constitute statutory financial statements for
the years ended 31 December 2021 and 2020 within the meaning of
Section 435 of the Companies Act 2006, but is extracted from those
financial statements. The auditors have reported on those financial
statements and have given an unqualified report which does not
contain a statement under Section 498 of the Companies Act
2006.
A. Reporting entity
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
consolidated financial statements of the Company as at and for the
period ended 31 December 2021 comprise the Company and its
subsidiaries (together referred to as the "Group"). 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, the disposal of the Group's 50:50 Lottery business (Bump
50:50) on 2 June 2021 and the disposal of the Group's supply
contract with LEIDSA in the Dominican Republic on 31 December 2021.
Following the disposals, the Group continues to provide pari-mutuel
betting (B2C) and lottery technology (B2B).
B. Going concern
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 financial
statements. Following the completion of the disposal of the LEIDSA
Lottery contract on 31 December 2021, the Group has realised
significant cash, the Board will continue to engage with
shareholders to assess the optimal use of capital.
The forecasts used in the analysis of the Group's ability to
continue in operational existence for the foreseeable future
include both the base plan and downside scenarios which although
Sportech has no connections with Russia or Ukraine through its
operations (no employees located there nor any customers or
suppliers in the region), include assumptions taking into account
macro-economic potential indirect impacts of the events
unfolding.
C. Basis of reporting
a. The accounting policies used in preparation of this
preliminary announcement have remained unchanged from those set out
in the Group's 2020 financial statements.
b. The consolidated financial statements have been extracted
from the statutory financial statements which have been prepared in
accordance with UK adopted international accounting standards. The
financial statements have been prepared under the historical cost
convention, as modified by the revaluation of certain financial
assets and financial liabilities.
c. The preparation of consolidated 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. Details of the critical
judgements applied in the preparation of these financial statements
are included in the full statutory financial statements.
D. 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 that management believe should be added back
(separately disclosed items) and other income. 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 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
2021 2020
Note GBP000 GBP000
Operating costs per income statement (15,680) (19,710)
Add back:
Sports betting investment 260 261
Depreciation M,N 982 1,621
Amortisation, excluding acquired intangible
assets L 129 276
Amortisation of acquired intangible assets L 509 509
Impairment of property, plant and equipment
and right-of-use assets - 4,349
Reversal of impairment of property, plant
and equipment (335) -
Share option charge 334 347
Separately disclosed items (net) F 1,101 229
--------- ---------
Adjusted operating costs, pre sports betting
investment (12,700) (12,118)
--------- ---------
Adjusted EBITDA is calculated as below.
Restated
2021 2020
Continuing operations GBP000 GBP000
Revenue 22,942 17,372
Cost of sales (11,489) (8,717)
--------- ---------
Gross profit 11,453 8,655
Marketing and distribution costs (276) (311)
--------- ---------
Contribution 11,177 8,344
Adjusted operating income and costs (pre sports
betting investment) (12,700) (12,118)
--------- ---------
Adjusted EBITDA pre sports betting investment (1,523) (3,774)
Sports betting investment (260) (261)
--------- ---------
Adjusted EBITDA (1,783) (4,035)
--------- ---------
Prior year comparatives have been adjusted for discontinued
operations related to the LEIDSA contract (prior year comparatives
were adjusted in the 2020 financial statements to excluded results
of the Global Tote and Bump 50:50 business).
Sports Betting investment represents the time and cost the Group
has incurred on 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. In both the current and prior year, the costs were all
wholly externally incurred and included no internal
allocations.
Adjusted profit/(loss) 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
2021 2020
From continuing operations: GBP000 GBP000
Adjusted EBITDA (1,783) (4,035)
Share option charge (334) (347)
Depreciation (982) (1,621)
Amortisation (excluding amortisation of acquired
intangibles) (129) (276)
Net finance costs (excluding certain finance costs
- note G) (130) (254)
-------- ---------
Adjusted loss before tax (3,358) (6,533)
Tax at 16.4% (2020: 20.3%) 551 1,326
-------- ---------
Adjusted loss after tax (2,807) (5,207)
-------- ---------
Restated
2021 2020
From discontinued operations: GBP000 GBP000
Adjusted EBITDA 6,879 6,369
Depreciation (221) (2,170)
Amortisation (151) (3,585)
Net finance costs 54 (68)
-------- ---------
Adjusted profit before tax 6,561 546
Tax at 25.8% (2020: (60.9)%) (1,693) 333
-------- ---------
Adjusted profit after tax 4,868 879
-------- ---------
E. Segmental reporting
2021
Sportech Sportech Corporate
Digital Venues costs Group
GBP000 GBP000 GBP000 GBP000
Revenue from sports betting services - 280 - 280
Revenue from food and beverage sales - 2,115 - 2,115
Revenue from rendering of services 1,032 19,515 - 20,547
--------- ----------- ------------ ---------
Total revenue 1,032 21,910 - 22,942
Cost of sales (548) (10,941) - (11,489)
--------- ----------- ------------ ---------
Gross profit 484 10,969 - 11,453
Marketing and distribution costs (76) (200) - (276)
--------- ----------- ------------ ---------
Contribution 408 10,769 - 11,177
Adjusted net operating costs (987) (9,149) (2,564) (12,700)
--------- ----------- ------------ ---------
Adjusted EBITDA (pre sports betting investment) (579) 1,620 (2,564) (1,523)
Sports betting investment - (260) - (260)
--------- ----------- ------------ ---------
Adjusted EBITDA (579) 1,360 (2,564) (1,783)
Share option charge - - (334) (334)
Depreciation (10) (950) (22) (982)
Amortisation (excluding amortisation of
acquired intangible assets) (97) - (32) (129)
--------- ----------- ------------ ---------
Segment result before amortisation of acquired
intangibles (686) 410 (2,952) (3,228)
Amortisation of acquired intangibles (509) - - (509)
Reversal of impairment of property, plant
and equipment - 335 - 335
Separately disclosed items (165) (84) (852) (1,101)
Other income 100 4,001 - 4,101
--------- ----------- ------------ ---------
Operating (loss)/profit (1,260) 4,662 (3,804) (402)
Net finance income 156
-----------
Loss before taxation from continuing operations (246)
Taxation - continuing operations (192)
-----------
Loss for the year from continuing operations (438)
Profit after tax from discontinued operations 35,001
-----------
Profit for the year 34,563
-----------
Discontinued operations in relation to the LEIDSA contract were
within the Sportech Digital division, formally known as Sportech
lotteries. Those in relation to Global Tote and Bump 50:50 were
classified as discontinued in 2020 also.
Within Sportech Venues' services revenue there is an amount of
cGBP263k which related to 2020 handle taken from Connecticut
residents online by out of state operators. It was only in 2021
that those operators received sub-licences to take bets from
Connecticut residents and as such that Sportech could collect as
"source market" fee from those operators, including back dating to
2020 handle.
Sportech Sportech Corporate
Digital Venues costs Group
GBP000 GBP000 GBP000 GBP000
Segment assets 1,252 20,288 18,738 40,278
Segment liabilities (208) (12,144) (8,104) (20,456)
--------- ----------- ------------ ---------
Other segment items - capital expenditure
Intangible assets (continuing operations) 165 - - 165
Intangible assets (discontinued operations) 847 - - 847
Property, plant and equipment (continuing
operations) 4 27 - 31
Property, plant and equipment (discontinued
operations) 551 - - 551
--------- ----------- ------------ ---------
2020
Sportech Sportech Corporate
Digital Venues costs Group
Restated GBP000 GBP000 GBP000 GBP000
Revenue from food and beverage sales - 1,472 - 1,472
Revenue from rendering of services 304 15,596 - 15,900
--------- ----------- ------------ ---------
Total revenue 304 17,068 - 17,372
Cost of sales (93) (8,624) - (8,717)
--------- ----------- ------------ ---------
Gross profit 211 8,444 - 8,655
Marketing and distribution costs - (311) - (311)
--------- ----------- ------------ ---------
Contribution 211 8,133 - 8,344
Adjusted net operating costs (973) (9,218) (1,927) (12,118)
--------- ----------- ------------ ---------
Adjusted EBITDA (pre sports betting investment) (762) (1,085) (1,927) (3,774)
Sports betting investment - (261) - (261)
--------- ----------- ------------ ---------
Adjusted EBITDA (762) (1,346) (1,927) (4,035)
Share option charge - - (347) (347)
Depreciation (10) (1,595) (16) (1,621)
Amortisation (excluding amortisation of acquired
intangible assets) (26) - (250) (276)
--------- ----------- ------------ ---------
Segment result before amortisation of acquired
intangibles (798) (2,941) (2,540) (6,279)
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 loss (1,307) (7,308) (2,751) (11,366)
Net finance costs (557)
---------
Loss before taxation from continuing operations (11,923)
Taxation - continuing operations 1,055
---------
Loss for the year from continuing operations (10,868)
Loss after tax from discontinued operations (1,964)
---------
Loss for the year (12,832)
---------
Assets
Sportech Sportech Corporate held
Digital Venues costs for sale Group
GBP000 GBP000 GBP000 GBP000 GBP000
Segment assets (excluding investments
and intercompany balances) 2,943 13,681 12,593 27,671 56,888
Segment liabilities (excluding intercompany
balances) (472) (8,659) (15,091) (7,507) (31,729)
--------- ----------- ------------ ---------- ---------
Other segment items - capital expenditure
Intangible assets (continuing operations) 230 - - - 230
Intangible assets (discontinued operations) - - - 1,420 1,420
Property, plant and equipment (continuing
operations) - 29 - - 29
Property, plant and equipment (discontinued
operations) 121 - - 603 724
--------- ----------- ------------ ---------- ---------
F. Separately disclosed items
2021 2020
Continuing operations Note GBP000 GBP000
Included in operating costs:
Onerous contract provisions and other losses
resulting from exit from Californian operations 91 -
Redundancy and restructuring costs 625 -
Corporate activity costs (a) 21 118
Costs in relation to the Spot the Ball VAT refund (b) 10 44
Costs in relation to exiting the Group's interests
in India 13 65
Costs in relation to the Group's move from Main -
Market to AIM 341
UK defined benefit pension scheme buy-out - 2
1,101 229
------- -------
Discontinued operations
Included in operating costs I(c) 371 1,224
Total included in operating costs 1,472 1,453
------- -------
Included in finance costs - continuing operations:
Interest accrued on corporate tax potentially
due and unpaid at the balance sheet date on
STB refund received in 2016 150 150
Interest paid on VAT settlement reached in 2020 - 83
------- -------
G 150 233
------- -------
Net separately disclosed items 1,622 1,686
------- -------
(a) Corporate activity costs
Costs incurred in relation to the approach by Standard General
LLP to acquire the entire equity of Sportech PLC and other
corporate activity.
(b) Costs in relation to the Sport the Ball refund
Advice continues to be received in relation to the corporate tax
filings in relation to the Spot the Ball VAT refund in 2016.
(c) Costs in relation to exiting the Group's interests in India
The Group is incurring costs in relation to dissolving the
holding company of the joint venture in Mauritius, the issue is
ongoing.
Below is a summary of exceptional cash outflows from separately
disclosed items:
2021 2020
GBP000 GBP000
-------------------------------------------------------- --------- --------
Continuing operations - cash outflows from separately
disclosed items:
Redundancy and restructuring costs (625) (18)
Expenses in relation to the UK defined benefit
pension scheme "buy-out" - (2)
Costs in relation to the Spot the Ball VAT refund (37) -
Costs in relation to corporate activity (71) (127)
Costs in relation to legacy tax disputes - (17)
Transaction costs - disposal of Global Tote Business - (16)
One off start-up costs of new ventures, including
new venue builds and joint ventures - (224)
Costs in relation to the Group's move to AIM (341) -
Costs in relation to the Group's lease in Norco,
California (785) -
Costs in relation to exiting the Group's interests
in India (13) (65)
-------------------------------------------------------- --------- --------
(1,872) (469)
Cash outflows from separately disclosed items -
discontinued operations (net) (535) (15)
-------------------------------------------------------- --------- --------
(2,407) (484)
-------------------------------------------------------- --------- --------
G. Net finance income/(costs)
2021 2020
Continuing operations GBP000 GBP000
Finance costs:
Interest accrued and paid on tax liabilities (150) (233)
Interest on lease obligations (note U) (155) (265)
Foreign exchange loss on financial assets and liabilities
denominated in foreign currency - (70)
Total finance costs (305) (568)
------- -------
Finance income:
Interest received on bank deposits 25 11
Foreign exchange gain on financial assets and liabilities
denominated in foreign currency 436 -
------- -------
Total finance income 461 11
------- -------
Discontinued operations (note I) 54 (68)
Net finance income/(costs) 210 (625)
------- -------
Of the above amounts the following have been excluded for the
purposes of deriving the alternative performance measures in note
D.
Restated
2021 2020
GBP000 GBP000
Foreign exchange gain/(loss) on financial assets
and liabilities denominated in foreign currency 436 (70)
Interest accrued and paid tax liabilities (150) (233)
286 (303)
------- ---------
H. Taxation
The Group's tax charge from continuing and discontinuing
operations comprises:
2021 2020
GBP000 GBP000
Current tax:
Current tax on profit for the year 1,219 1,176
Adjustments in respect of prior years 6 (1,895)
------- --------
Total current tax 1,225 (719)
------- --------
Deferred tax:
Origination and reversal of temporary differences (56) 169
Change in rates (4) (1)
Adjustments in respect of prior years 13 (204)
Derecognition of previously recognised deferred tax
assets - 986
------- --------
Total deferred tax (47) 950
------- --------
Total tax charge 1,178 231
------- --------
Restated
2020
2021
GBP000 GBP000
Total tax charge/(credit) in continuing operations 192 (1,055)
Total tax charge in discontinued operations 986 1,286
------- ----------
Total tax charge 1,178 231
------- ----------
The taxation on the Group's profit/loss) before taxation differs
from the theoretical amount that would arise using the weighted
average tax rate applicable to profits and losses of the
consolidated entities as follows:
2021 2020
GBP000 GBP000
Profit/(loss) for the year 34,563 (12,832)
Total tax charge 1,178 231
-------- ---------
Profit/(loss) before tax 35,741 (12,601)
-------- ---------
Tax calculated at domestic tax rates applicable
to (losses)/profits in the respective countries 8,065 (2,669)
Tax effects of:
- expenses not deductible for tax purposes net of
income not taxable (5,282) 449
- foreign taxes paid not provided for 689 835
- adjustments in respect of prior years - current
tax 6 (1,895)
- adjustments in respect of prior years - deferred
tax 13 (204)
- effect of change in rates (4) (1)
- deferred tax not recognised during the year 319 2,730
- deferred tax not previously provided (2,628) -
- derecognition of previously recognised deferred
tax assets - 986
-------- ---------
Total tax charge 1,178 231
-------- ---------
US deferred tax assets were revalued downwards in 2020 by
GBP986k to GBPnil carrying value (predominantly foreign taxes paid
in the Dominican Republic), following a review of recoverability.
Group cash flow forecasts were used and any assets not showing as
recoverable within five years were considered not recoverable and a
valuation allowance was charged to the income statement. The same
analysis was carried out in 2021 and the review confirmed no
recoverability and therefore no deferred tax asset has been
recognised in the US businesses as at 31 December 2021. There are
no changes expected in the US federal income tax rate from the
current rate of 21%.
These financial statements account for the change in the UK
Corporation Tax rate from 19% to 25% based on enacted legislation.
Deferred tax in the UK would be provided at 25%, however deferred
tax in the UK is valued at GBPnil as losses carried froward are not
expected to be recovered.
Included within the Group's current tax liabilities is a
provision of GBP4.6m for an uncertain tax position in relation to
the treatment of the gain included in the 2016 financial statements
for the Spot the Ball VAT refund. Included in current tax
receivable in the prior year is GBP1.4m in relation to a refund,
which was subsequently received in February 2021, for overpaid tax
in relation to the disposal of The Football Pools trade and assets
in June 2017.
An analysis of the current tax liabilities is as follows:
Restated
2021 2020
GBP000 GBP000
At 1 January 3,258 4,880
Charged to the income statement - continuing
operations 239 (1,770)
Charged to the income statement - discontinued
operations* 791 1,051
Paid during the year - continuing operations (105) 41
Received during the year - continuing operations 1,442 -
Paid during the year - discontinued operations* (904) (1,070)
Transferred to liabilities associated with assets
held for sale - 117
Foreign exchange movements (3) 9
At 31 December 4,718 3,258
------- ---------
Included in:
Current assets - (1,442)
Current liabilities 4,718 4,700
------- ---------
4,718 3,258
------- ---------
* Relating to LEIDSA contract only. Tax paid in the other
discontinued operations was GBP20k.
I. Discontinued operations and assets held for sale
Ia) 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:
2021
GBP000
---------------------------------- --------
Cash consideration received 4,346
Net book value disposed of (1,154)
Right-of-use asset recognised 169
Lease liability recognised (633)
Costs of disposal (153)
------------------------------------- --------
Profit after tax on disposal net
of costs 2,575
------------------------------------- --------
Ib) On 2 June 2021 the Group completed the disposal of its 100%
interest in Bump (Worldwide) Inc. ("Bump") for gross consideration
of GBP4,941k (CAD$8,462k), including a net working capital
settlement of GBP277k. The division was classified as held for sale
as at 31 December 2020 and was part of the Sportech Racing
division. Further deferred contingent consideration is potentially
due of GBP1,165k (CAD$2,000k). This has not been recognised given
the uncertainty of the revenue hurdle required to be achieved.
The profit/(loss) for the period and cashflows from Bump are
shown below:
Period ended
Note 2 June 2021 2020
Bump (Worldwide) Inc.: GBP000 GBP000
------------------------------------------------- ------ ------------- --------
Revenue 810 703
Cost of sales, marketing and distribution and
adjusted operating expenses (487) (1,598)
--------------------------------------------------------- ------------- --------
Adjusted EBITDA 323 (895)
Depreciation and amortisation - (291)
Separately disclosed items - (65)
Finance income 78 45
---------------------------------------------------------
Profit/(loss) before tax 401 (1,206)
Tax, excluding tax arising on disposal - -
------------------------------------------------- ------ ------------- --------
Profit/(loss) after tax 401 (1,206)
Gain from selling discontinued operations after
tax (net of disposal costs) Ie 3,805 -
------------------------------------------------- ------ ------------- --------
Profit/(loss) for the period 4,206 (1,206)
--------------------------------------------------------- ------------- --------
Net cash flow from operating activities 462 (801)
Net cash flow from investing activities (37) (118)
--------------------------------------------------------- ------------- --------
Net decrease in cash generated/(used) 425 (919)
--------------------------------------------------------- ------------- --------
Separately disclosed items within the above table are disposal
costs.
Ic) 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 GBP33,906k including a payment
for cash transferred to the buyer with the business of GBP3,609k
net of debt like items of GBP1,294k, received in July 2021 plus a
settlement of net working capital which was in excess of an agreed
Target working capital (and other adjustments) of GBP559k also
delivered. 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
ended
17 June
Note 2021 2020
Global Tote Group: GBP000 GBP000
------------------------------------------------- ------ ---------- ---------
Revenue 12,245 25,052
Cost of sales, marketing and distribution and
adjusted operating expenses (8,140) (19,525)
--------------------------------------------------------- ---------- ---------
Adjusted EBITDA 4,105 5,527
Other income X 1,057 -
Depreciation and amortisation - (5,083)
Profit on disposal of intangible assets 68 -
Separately disclosed items (371) (1,159)
Finance costs (24) (113)
---------------------------------------------------------
Profit/(loss) before tax 4,835 (828)
Tax, excluding tax arising on disposal (195) (528)
--------------------------------------------------------- ---------- ---------
Profit/(loss) after tax 4,640 (1,356)
Gain from selling discontinued operations after Ie 17,051 -
tax (net of disposal costs)
------------------------------------------------- ------ ---------- ---------
Profit/(loss) for the period 21,691 (1,356)
--------------------------------------------------------- ---------- ---------
Net cash flow from operating activities 1,944 6,099
Net cash flow from investing activities (930) (1,905)
Net cash flow from financing activities (160) (436)
--------------------------------------------------------- ---------- ---------
Net increase in cash generated 854 3,758
--------------------------------------------------------- ---------- ---------
Separately disclosed items incurred in the period were
redundancy and restructuring costs in respect of a rationalisation
of this business and a provision for an employment tax settlement
in Ireland (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).
Id) On 31 December 2021 the Group completed the disposal of its
wholly owned subsidiary, Sportech Lotteries, LLC which had the
legal rights to the service contract with LEIDSA who operates the
Dominican Republic national lottery. Gross Consideration amounts to
GBP9,854k including an estimate for settlement of net working
capital which was in excess of an agreed Target working capital of
GBP431k. GBP9,432k of the consideration was received on 31 December
2021, the final working capital settlement has been received in Q1
2022, there was no variance to estimate as at 31 December 2021.
The profit for the period and cashflows from Sportech Lotteries,
LLC are shown below:
Period ended
31 December
Note 2021 2020
Sportech Lotteries, LLC: GBP000 GBP000
------------------------------------------- ------ ------------- -------
Revenue 3,364 2,594
Cost of sales, marketing and distribution
and adjusted operating expenses (913) (857)
--------------------------------------------------- ------------- -------
Adjusted EBITDA 2,451 1,737
Depreciation and amortisation (372) (381)
Profit on disposal of property, plant and
equipment 47 -
-------------------------------------------
Profit before tax 2,126 1,356
Tax, excluding tax arising on disposal (791) (758)
--------------------------------------------------- ------------- -------
Profit after tax 1,335 598
Gain from selling discontinued operations
after tax (net of disposal costs) Ie 7,769 -
------------------------------------------- ------ ------------- -------
Profit for the period 9,104 598
--------------------------------------------------- ------------- -------
Net cash flow from operating activities 1,068 568
Net cash flow from investing activities (429) (121)
--------------------------------------------------- ------------- -------
Net decrease in cash generated/(used) 639 447
--------------------------------------------------- ------------- -------
Ie) A summary of the gain on disposal of each discontinued
operation is as follows:
Global Sportech
Tote Group Bump (Worldwide) Lotteries
Inc. LLC Total
Note GBP000 GBP000 GBP000 GBP000
-------------------------------------- ------ ------------ ----------------- ----------- --------
Cash consideration received
and receivable 33,906 4,941 9,854 48,701
Cash disposed of (3,609) (116) - (3,725)
Cash consideration received
and receivable net of cash disposed
of If 30,297 4,825 9,854 44,976
-------------------------------------- ------ ------------ ----------------- ----------- --------
Add cumulative foreign exchange
movements recycled to the income
statement 3,234 (101) 240 3,373
Costs of disposal (1,511) (118) (405) (2,034)
Less net assets disposed of:
Intangibles 6,582 274 209 7,065
Property, plant and equipment 5,001 210 180 5,391
Right-of-use assets 761 - - 761
Deferred tax assets 12 - - 12
Trade and other receivables 4,621 380 1,542 6,543
Inventories 2,479 - - 2,479
Income tax payable (44) - - (44)
Trade and other payables (2,660) (63) (11) (2,734)
Lease liabilities (786) - - (786)
Retirement benefit liability (997) - - (997)
---------------------------------------------- ------------ ----------------- ----------- --------
14,969 801 1,920 17,690
Pre-tax gain on disposal of
discontinued operations 17,051 3,805 7,769 28,625
Taxation - - - -
-------------------------------------- ------ ------------ ----------------- ----------- --------
Gain on disposal of discontinued
operations 17,051 3,805 7,769 28,625
---------------------------------------------- ------------ ----------------- ----------- --------
Costs of disposal include bonuses paid to Group employees of
GBP1,173k for Global Tote, GBP85k for Bump and GBP375k for Sportech
Lotteries, LLC (including employer's taxes payable).
If) A summary of the cash consideration received and receivable
net of cash disposed of is as follows:
Global Sportech
Tote Group Bump (Worldwide) Lotteries
Inc. LLC Total
Note GBP000 GBP000 GBP000 GBP000
---------------------------------- ------ ------------ ----------------- ----------- --------
Cash consideration received
in 2021 net of cash disposed
of 24,352 4,825 9,423 38,600
Disposal costs paid in 2021 (1,716) (181) (6) (1,903)
------------------------------------------ ------------ ----------------- ----------- --------
Cash consideration received
net of cash disposed of and
disposal costs paid in the
period 22,636 4,644 9,417 36,697
Add back cash disposal costs
paid in the period 1,716 181 6 1,903
------------------------------------------ ------------ ----------------- ----------- --------
Cash consideration received
net of cash disposed of before
disposal costs paid in the
period 24,352 4,825 9,423 38,600
Cash consideration received
in 2020 (including FX movement) 5,945 - - 5,945
Consideration to be received
in 2022 - - 431 431
------------------------------------------ ------------ ----------------- ----------- --------
Cash consideration received
and receivable net of cash
disposed of before disposal
costs paid in the period Ie 30,297 4,825 9,854 44,976
---------------------------------- ------ ------------ ----------------- ----------- --------
Cash consideration received in 2020 related to an Initial
Payment received from BetMakers Technology Group Ltd for the
disposal of Global Tote, the deposit was unconditional and
non-returnable.
Ig) Reconciliation to profit/(loss) for the period included in
the income statement:
Note 2021 2020
GBP000 GBP000
------------------------- ------ ------- --------
Global Tote Ic 21,691 (1,356)
Bump Ib 4,206 (1,206)
Sportech Lotteries, LLC Id 9,104 598
------------------------- ------ ------- --------
35,001 (1,964)
-------------------------------- ------- --------
J. (Loss)/earnings per share
(a) Basic
Basic earnings/(loss) per share is calculated by dividing the
profit/(loss) attributable to equity holders of the Parent Company
by the weighted average number of ordinary shares in issue during
the year.
Restated
2021 2020
------------------------------------ -------------------------------------
Continuing Discontinued Total Continuing Discontinued Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
(Loss)/profit attributable
to the owners of the
Company (438) 35,001 34,563 (10,868) (1,964) (12,832)
Weighted average number
of ordinary shares
in issue ('000) 169,785 169,785 169,785 188,751 188,751 188,751
----------- ------------- -------- ----------- ------------- ---------
Basic (loss)/earnings
per share (0.3)p 20.6p 20.3p (5.8)p (1.0)p (6.8)p
----------- ------------- -------- ----------- ------------- ---------
(b) Diluted
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. Where there
is a loss attributable to owners of the Company, the earnings per
share is not diluted.
Restated
2021 2020
------------------------------------ -------------------------------------
Continuing Discontinued Total Continuing Discontinued Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Loss)/profit attributable
to the owners of the
Company (438) 35,001 34,563 (10,868) (1,964) (12,832)
Weighted average number
of ordinary shares
in issue ('000) 169,785 169,785 169,785 188,751 188,751 188,751
Dilutive potential
ordinary shares N/A N/A N/A N/A N/A N/A
----------- ------------- -------- ----------- ------------- ---------
Total potential ordinary
shares 169,785 169,785 169,785 188,751 188,751 188,751
----------- ------------- -------- ----------- ------------- ---------
Diluted (loss)/earnings
per share (0.3)p 20.6p 20.3p (5.8)p (1.0)p (6.8)p
----------- ------------- -------- ----------- ------------- ---------
The number of potentially dilutive shares not taken into account
in respect of the VCP in prior year was unlimited. The VCP expired
on 31 December 2021 and there are no longer any potentially
dilutive shares .
( c ) Adjusted
Adjusted EPS is calculated by dividing the adjusted loss after
tax (as defined in note D) attributable to owners of the Company by
the weighted average number of ordinary shares in issue during the
year.
Restated
2021 2020
---------------------------------------- --------------------------------------
Weighted Weighted
Adjusted average Adjusted average
loss after number loss number
tax of shares Per share after of shares Per share
amount tax amount
Continuing operations GBP000 GBP000 Pence GBP000 GBP000 Pence
Basic adjusted EPS (2,807) 169,785 (1.7)p (5,207) 188,751 (2.8)p
Diluted adjusted EPS (2,807) 169,785 (1.7)p (5,207) 188,751 (2.8)p
K. Goodwill
Goodwill cost brought forward arose on the acquisition of Lot.to
Systems Limited (which is now subsumed into Sportech Digital) in
February 2019. The goodwill is attributable to the knowledge and
expertise of the workforce.
Movements in the Group's goodwill are shown below:
2021 2020
Sportech Sportech
Digital Total eBet Digital Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 604 604 5,548 604 6,152
Transferred to held for sale - - (5,548) - (5,548)
--------- ------- -------- --------- --------
At 31 December 2021 604 604 - 604 604
--------- ------- -------- --------- --------
Accumulated impairment charges
At 1 January - - (5,548) - (5,548)
Transferred to held for sale - - 5,548 - 5,548
--------- ------- -------- --------- --------
At 31 December 2021 - - - - -
--------- ------- -------- --------- --------
Closing net book value 604 604 - 604 604
--------- ------- -------- --------- --------
L. Intangible fixed assets
2021
Software Licences Total
GBP000 GBP000 GBP000
Cost
At 1 January 2021 5,353 5,696 11,049
Additions - continuing operations 165 - 165
Additions - discontinued operations 23 - 23
Disposal (965) - (965)
At 31 December 2021 4,576 5,696 10,272
----------- ----------- --------
Accumulated amortisation
At 1 January 2021 3,594 879 4,473
Charge for year - continuing operations 603 35 638
Charge for year - discontinued operations 151 - 151
Disposal (756) - (756)
At 31 December 2021 3,592 914 4,506
----------- ----------- --------
Exchange differences at 1 January 2021 - 767 767
Movement in the year - 71 71
Disposal (247) - (247)
----------- ----------- --------
Exchange differences at 31 December 2021 (247) 838 591
----------- ----------- --------
Net book amount at 31 December 2021 737 5,620 6,357
----------- ----------- --------
Of the amounts capitalised in the year in continuing operations,
GBP165k arose from capitalising staff costs for development
expenditure (2020: GBP230k). Of the amounts capitalised in the year
in discontinued operations, GBPnil arose from capitalising staff
costs for development expenditure (2020: GBP1,420k). Amortisation
has been included within operating costs.
Assets relating to in-house developed proprietary pari-mutuel
software serving racing customers worldwide was sold during the
year to Betmakers Technology Group for proceeds of GBP150k
resulting in a profit on disposal of GBP68k.
Impairment - Licences
The Group holds a licence in perpetuity to offer pari-mutuel
off-track betting in the State of Connecticut in the US for its
Venues division. This asset has a book value in GBP at the
reporting date, prior to any impairment that may be considered
necessary, of GBP5,616k ($7,569k, 2020: GBP5,545k, $7,569k). Given
this licence is in perpetuity, the book value of the asset is not
amortised and the useful economic life allocated to the asset is
indefinite.
As required by IAS 36, an impairment test has been carried out
as at 31 December 2021. In testing for impairment, other assets
used solely to generate cash flows in the Venues CGU are also
included, totalling (together with the licence carrying value)
GBP12,680k, $17,088k (2020: GBP9,876k, $13,479k).
The recoverable amount of the asset has been determined based on
a value-in-use calculation. The key base case assumptions made in
calculating the value-in-use were:
- EBITDA forecasts assume year-on-year handle decline in the
core operating business of 8% in 2022 and 1% per annum thereafter
and 2% decline into perpetuity;
- 3% increase in online handle in 2022, 5% in 2023, 2% in 2024 and 2025 and into perpetuity;
- 7% increase in handle at the Stamford venue in 2022 and handle
is assumed to decline by 5% thereafter through 2025, and 2% decline
into perpetuity;
- a 44% increase in core F&B revenues, which excludes the
Stamford venue, in 2022 reflecting further recovery from COVID-19
restrictions, a 1% increase in 2023, 2024 and 2025 and thereafter
stable revenues into perpetuity;
- F&B revenues at the Stamford venue are forecasted to
increase by 69% in 2022, again reflecting recovery from COVID-19
restrictions, to increase a further 10% in 2023, 5% in 2024 and 3%
in 2025, and remain flat thereafter into perpetuity;
- Sports betting revenues are forecasted to increase by 8% from
2022 budget levels in 2023 and by 6% in 2024 and 2025 and to then
remain flat into perpetuity (is it assumed the 10-year contract
with CLC will be renewed in perpetuity);
- capital expenditure was included in the cash flows at
management's best estimate of industry norm for reinvestment in
retail outlets of the kind under review; and
- a post-tax discount rate of 13.5% (2020: 10.5%) was used
representing a market-based weighted average cost of capital
appropriate for the Sportech Venues CGU. The pre-tax discount rate
was 18.9% (2020: 14.7%).
The above assumptions are together considered by management to
be the most likely trading performance outcome for the CGU, having
taken into account past experience and knowledge of the future
trading environment.
Following the impairment review, the recoverable amount of those
assets was deemed to be GBP16,792k ($22,630k) and accordingly no
impairment was identified (2020: no impairment).
The below assumptions represent a reasonable downside case for
sensitivity purposes. This would reduce the carrying value of the
trading assets in the business to GBP12,946k, being headroom to the
carrying value of GBP266k.
- 2% decline for 2023 through 2025 rather than 1% for core wagering handle;
- 3%, 1% and 1% growth for online handle in 2023 through 2025 rather than 5%, 2% and 2%;
- Stamford's handle remains at 2022 forecast levels;
- All other costs remain constant;
- Core F&B delivers same EBITDA as 2022 budget - $65k throughout the period; and
- Stamford F&B delivers same EBITDA as 2022 budget - loss of $219k throughout the period.
For information, if a 0.5% increase in the post-tax discount
rate to 14.0% was used in the Base Case model this would lead to a
value in use of GBP14,697k.
Restated Customer
2020 contracts
and relationships Software Licences Other Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2020 862 37,558 17,024 2,960 58,404
Additions - continuing operations - 230 - - 230
Additions - discontinued
operations - 1,366 - 54 1,420
Transferred to held for sale (862) (33,801) (11,328) (3,014) (49,005)
At 31 December 2020 - 5,353 5,696 - 11,049
------------------- ----------- ----------- -------- ---------
Accumulated amortisation
At 1 January 2020 862 29,938 13,178 3,715 47,693
Charge for year - continuing
operations - 735 50 - 785
Charge for year - discontinued
operations - 3,585 - - 3,585
Transferred to held for sale (862) (30,664) (12,349) (3,715) (47,590)
At 31 December 2020 - 3,594 879 - 4,473
------------------- ----------- ----------- -------- ---------
Exchange differences at 1
January 2020 - 1,158 1,989 1,077 4,224
Movement in the year - (74) (201) (53) (328)
Transferred to held for sale - (1,084) (1,021) (1,024) (3,129)
------------------- ----------- ----------- -------- ---------
Exchange differences at 31
December 2020 - - 767 - 767
------------------- ----------- ----------- -------- ---------
Net book amount at 31 December
2020 - 1,759 5,584 - 7,343
------------------- ----------- ----------- -------- ---------
M. Property, plant and equipment
2021 Leasehold
improvements
and owned Assets in
land and Plant and Fixtures the course
buildings machinery and fittings of construction Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2021 8,393 3,022 3,553 31 14,999
Additions - continuing operations - 16 45 (30) 31
Additions - discontinued operations - 343 - 64 407
Disposals - (2,879) - (64) (2,943)
-------------- ----------- -------------- ----------------- --------
At 31 December 2021 8,393 502 3,598 1 12,494
-------------- ----------- -------------- ----------------- --------
Accumulated depreciation
At 1 January 2021 4,780 1,513 3,274 - 9,567
Charge for year - continuing
operations 195 19 234 - 448
Charge for year - discontinued
operations - 221 - - 221
Reversal of impairment (335) - - - (335)
Disposals - (1,752) - - (1,752)
-------------- ----------- -------------- ----------------- --------
A t 31 D e c e m b er 2021 4,640 1 3,508 - 8,149
-------------- ----------- -------------- ----------------- --------
Exchange differences at 1 January
2021 122 (672) 195 - (355)
Movement in the year (68) 1 138 1 72
Disposals - 199 - - 199
-------------- ----------- -------------- ----------------- --------
Exchange differences at 31
December 54 (472) 333 1 (84)
-------------- ----------- -------------- ----------------- --------
N e t b o ok am o u nt at
31 D e c e m b er 2021 3,807 29 423 2 4,261
-------------- ----------- -------------- ----------------- --------
Depreciation charges have been included in operating costs.
Reversal of impairment
The assets at the Stamford sports bar venue in Connecticut, USA
were fully impaired in prior periods. Given the new arrangement for
sports betting in the venue which came into force in late October
2021, management have considered whether any of the previous
impairment of assets should be reversed based on the venue's
trading performance. Modelling was undertaken to calculate the
value-in-use of the assets at the venue. The following key
assumptions were made in the value-in-use calculation:
- The break clause in May 2025 will not be activated to end the
lease in June 2026 and the trade at the venue will continue into
perpetuity (this a reversal of the assumption taken in June 2020
that the break would be taken). This has been reflected in the year
with the lease liability remeasured resulting in an increase in the
lease liability of GBP2,835K and a corresponding increase in the
right-of-use asset was made (see note U and M);
- Pari-mutuel handle was assumed to increase by 7% from 2021 to
2022 but then decrease by 5% per annum until 2025 and by 2%
thereafter into perpetuity;
- F&B revenues are forecasted to increase by 69% in 2022
(recovering from the depressed 2020 and 2021 levels due to COVID-19
restrictions), by 10% in 2023 and by 5% in 2024 and 3% in 2025, and
to then remain flat into perpetuity;
- Sports betting revenues are forecasted to increase by 8% from
2022 budget levels in 2023 and by 6% in 2024 and 2025 and to then
remain flat into perpetuity (is it assumed the 10-year contract
with CLC will be renewed in perpetuity);
- Capital expenditure will average at $100k per annum into perpetuity; and
- a post-tax discount rate of 13.5% (2020: 9.5%) was used
representing a market-based weighted average cost of capital
appropriate for the Sportech Venues CGU.
As part of the discounted cashflow exercise with the above
assumptions the recoverable amount of those assets was deemed to be
GBP3,119k. Accordingly a reversal of impairment of GBP335k was
identified and has been credited to the income statement within
operating costs.
No indicators of impairment of other property, plant and
equipment arose in the second half of the year.
Leasehold
Restated improvements Assets
2020 and owned in the
land and Plant and Fixtures course
buildings machinery and fittings of construction Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2020 16,573 11,785 5,423 74 33,855
Additions - continuing operations - - - 29 29
Additions - discontinued operations - 710 - 14 724
T r a ns f e rred to held for
sale (8,180) (9,473) (1,870) (86) (19,609)
------------- ----------- -------------- ----------------- --------
At 31 December 2020 8,393 3,022 3,553 31 14,999
------------- ----------- -------------- ----------------- --------
Accumulated depreciation
At 1 January 2020 11,320 4,260 4,225 - 19,805
Charge for year - continuing
operations 401 31 382 - 814
Charge for year - discontinued
operations 40 1,742 8 - 1,790
T r a ns f e rred to held for
sale (8,869) (4,520) (1,974) - (15,363)
Impairment 1,888 - 633 - 2,521
------------- ----------- -------------- ----------------- --------
A t 31 D e c e m b er 2020 4,780 1,513 3,274 - 9,567
------------- ----------- -------------- ----------------- --------
Exchange differences at 1 January
2020 2,003 1,198 425 - 3,626
Movement in the year (27) (24) (126) (2) (179)
T r a ns f e rred to held for
sale (1,854) (1,846) (104) 2 (3,802)
-------------
Exchange differences at 31 December 122 (672) 195 - (355)
-------------
N e t b o ok am o u nt at 31
D e c e m b er 2020 3,735 837 474 31 5,077
-------------
The table has been restated to show additions which are in
continuing activities and those which are classed as
discontinued.
N. Right-of-use assets
2021
Land and Fixtures
buildings Vehicles and fittings Total
GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2021 6,941 29 53 7,023
Additions 1,240 - - 1,240
Reassessment of lease term 604 - - 604
Transferred from held for sale 96 - - 96
At 31 December 2021 8,881 29 53 8,963
Accumulated depreciation
At 1 January 2021 5,878 2 27 5,907
Charge for year 519 5 10 534
Reassessment of lease term (2,231) - - (2,231)
Transferred from held for sale 51 - - 51
A t 31 D e c e m b er 2021 4,217 7 37 4,261
Exchange differences at 1 January 2021 20 (1) (2) 17
Movement in the year (62) - - (62)
Exchange differences at 31 December 2021 (42) (1) (2) (45)
N e t b o ok am o u nt at 31 D e c e
m b er 2021 4,622 21 14 4,657
Depreciation charges have been included in operating costs.
Reassessment of lease assumption - break clause
During the year ended 31 December 2020, management had judged
that the break clause in the lease of the Stamford sports bar venue
in Connecticut, USA, would be exercised and that the venue would be
exited in May 2025. Following the new arrangement which came into
force in late October 2021 and allowed sports betting to commence
in the venue, management now consider that the break will not be
taken and the Group will continue to operate the venue until at
least the end of the lease in May 2035. As a result, during the
year ended 31 December 2021, the lease liability was remeasured
resulting in an increase of GBP2,835k (see note U) and a
corresponding increase in the right-of-use asset.
This GBP2,835k increase to the right-of-use asset should wholly
be recognised as an increase in cost but GBP2,231k has been taken
against accumulated depreciation with only GBP604k recognised as an
increase in cost. This is to ensure that the correct closing cost
and accumulated depreciation figures are reported as, during the
year ended 31 December 2020, the reassessment of the lease term
which led to a decrease in the right of use asset of GBP2,231k was
shown as an increase in accumulated depreciation when it should
have been recognised as a reduction in cost. This had no impact on
the net book amount of the right-of-use asset reported nor on
profit for the year. Rather than restate the cost and accumulated
depreciation figures for the year ended 31 December 2020 with no
overall impact, management have reversed the GBP2,231k adjustment
to accumulated depreciation during the year ended 31 December 2021
and correctly recognised the excess of GBP604k as an increase in
cost.
Value in use
Management considered that indicators of impairment of the
right-of-use assets of the Stamford sports bar lease in
Connecticut, USA, following the reassessment of the break clause
assumption. The carrying value was considered to be supported by
the discounted future cashflows and as a result no further
impairment was identified. See note M for details of assumptions
used in the forecasting.
No indicators of impairment arose in relation to any other
right-of-use asset during the period.
Plant & Fixtures
Land and buildings Vehicles machinery and fittings Total
2020 GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 1 January 2020 7,698 237 - 40 7,975
Additions - continuing operations 304 29 - 13 346
Additions - discontinued operations 73 30 205 - 308
Transferred to held for sale (1,134) (267) (205) - (1,606)
At 31 December 2020 6,941 29 - 53 7,023
Accumulated depreciation
At 1 January 2020 1,282 97 - 13 1,392
Charge for year - continuing
operations 791 2 - 14 807
Charge for year - discontinued
operations 225 97 58 - 380
Reassessment of lease term 2,231 - - - 2,231
Impairment 1,828 - - - 1,828
Transferred to held for sale (479) (194) (58) - (731)
A t 31 D e c e m b er 2020 5,878 2 - 27 5,907
Exchange differences at 1 January
2020 (263) (6) - (2) (271)
Movement in the year 250 (1) (3) - 246
Transferred to held or sale 33 6 3 - 42
Exchange differences at 31 December
2020 20 (1) - (2) 17
N e t b o ok am o u nt at 31
D e c e m b er 2020 1,083 26 - 24 1,133
O. Trade and other receivables
2021 2020
GBP000 GBP000
N o n -cur r e nt
Other receivables 158 156
N o n -cur r e nt t r ade and o t h er r e c e i v
a bl es 158 156
C ur r e n t
T r ad e r e c e i v a bl es 781 778
L e s s p ro vis i on f or i mp air m e nt of r e c
e i v a bl es - (111)
T r ad e r e c e i v a bl es - n et 781 667
O t h e r r e c e i v a bl es 480 62
A c c ru e d i n c ome 279 292
P r e p a y m e n t s 210 496
C ur r e n t t r ade and o t h er r e c e i v a bl
es 1,750 1,517
T o t a l t r ade and o t h er r e c e i v a bl es 1,908 1,673
The fair value of trade and other receivables is not considered
to be different from the carrying value recorded above. Other
receivables includes GBP423k due from Inspired Entertainment Inc.
for final working capital settlement on disposal of LEIDSA .
P. Deferred tax
T h e m ov e m e nt on t he n et d ef e r r ed tax ba l an ce is
as f o l l o w s:
Asset Liability Net
2021 2021 2021 2020
GBP000 GBP000 GBP000 GBP000
N e t d ef e r r ed tax ass et at
1 Janua ry 4 (94) (90) 808
Income statement (charge)/credit -
continuing operations (4) 51 47 (715)
Income statement charge - discontinued
operations - - - (235)
T a x c r edi t ed di r ectly to other
c omp r ehensi ve in c ome - - - 88
Deferred tax transferred to assets
held for sale - - - (27)
E x c hang e d i f f e r e n c es - - - (9)
N e t d ef e r r ed tax ass et at
31 De c e mb er - (43) (43) (90)
Included in:
Non-current assets - - - 4
Current liabilities - - - (94)
Non-current liabilities - (43) (43) -
- (43) (43) (90)
D eferre d tax a ss e ts
Other
Capital temporary
Pension allowances differences Total
GBP000 GBP000 GBP000 GBP000
A t 1 Janua ry 2020 - 33 957 990
In c om e s t a t e m e nt charge -
continuing operations - 4 (807) (803)
In c om e s t a t e m e nt charge -
discontinued operations (88) (5) (142) (235)
T a x credi t ed di r ectly to other
c omp r ehensi ve in c ome 88 - - 88
Transferred to assets held for sale - (27) - (27)
C ur r e nc y t r a n s l a t i on d
i f f e r e n c es - (1) (8) (9)
A t 31 De c ember 2020 - 4 - 4
In c om e s t a t e m e nt charge -
continuing operations - (4) - (4)
A t 31 D e c e m b er 2021 - - - -
The Group has not recognised further deferred tax assets on
gross timing differences in continuing operations of: GBP6,804k in
the US (2020: GBP21,637k) arising from unutilised trading losses
and carried forward foreign tax credits; GBPnil (2020: GBP6,123k)
from capital tax allowances versus accounting charges; and
GBP5,212k (2020: GBP7,985k) from other short term timing
differences. In the UK, GBP2,177k gross timing differences exist
arising from trading losses and GBP32k on depreciation charged in
excess of capital allowances claimed, which have not been provided
for.
The Directors reviewed the recoverability of the deferred tax
assets in the US and the UK during the year and did not consider
there is sufficient certainty of future profits against which these
losses/credits which could be offset due to expected future profit
generation levels in the respective business units. A significant
proportion of the tax losses unprovided for last year end in the US
were utilised against profits on disposal of the discontinued
operations in the US (as was expected at 31 December 2020, however
accounting prevented the anticipation of such utilisation in the
recognition of deferred tax assets.)
D ef e r r e d tax ass e ts a re r e c o gn i s ed w h en it is
p r oba ble t h at f ut u re ta x a ble p r o f i ts w ill be g e n
e r a t ed ag ain st w hich assets c an be u t ili s e d.
D eferre d tax liabilities
Other
temporary
differences Total
GBP000 GBP000
A t 1 Janua ry 2020 (182) (182)
In c om e s t a t e m e nt credit
- continuing operations 88 88
A t 1 January 2021 (94) (94)
In c om e s t a t e m e nt credit-
continuing operations 51 51
A t 31 De c ember 2021 (43) (43)
Of the deferred tax liability, GBP5k is the remaining balance
from that which was recognised on the acquisition of Lot.to Systems
Limited, in relation to intangible assets identified. The balance
is in relation to the S&S Venues partnership. All of the
deferred tax liability is recorded in non-current liabilities
(2020: current liabilities).
Q. Inventories
2021 2020
GBP000 GBP 000
F in i s h e d goo ds 124 120
124 120
R. Cash and cash equivalents
2021 2020
GBP000 GBP000
Cash and short-term deposits 21,912 11,356
Customer funds 455 465
22,367 11,821
S. Trade and other payables
2021 2020
GBP000 GBP 000
T r ad e p a y a bl es 3,545 3,581
O t h e r ta x es and s o c i al s e cur i ty co s
ts 178 141
A c c rua l s 3,767 3,737
D ef e r r e d i n c ome - 6,180
Pl ay e r l i a b il i ty 455 465
7,945 14,104
T h e r e is no d i f f e r e n ce b e t w een book v a l ues
and f air v a l ues of t r ade and o t h er p a y a bl es. A ll amo
u n ts a re due wi t hin one y ea r. Deferred income in 2020 is c
onsideration received in advance not yet recorded in income related
to an Initial Payment received from BetMakers Technology Group Ltd
for the acquisition of certain parts of the Racing and Digital
division .
T. Provisions
Onerous Other
contracts Provisions Total
GBP000 GBP000 GBP000
A t 1 Janua ry 2020 1,597 8 1,605
Utilised during the year (105) - (105)
Expense discount interest to the income statement - (7) (7)
Cur r enc y dif f e r en c es (50) (1) (51)
A t 1 January 2021 1,442 - 1,442
Utilised during the year (785) - (785)
Transferred to liabilities associated with
assets held for sale 91 - 91
Cur r enc y dif f e r en c es (12) - (12)
A t 31 D e c e m b er 2021 736 - 736
Of which:
Current provisions 736 - 736
736 - 736
P ro vis i o n s h ave b een r e c o gn i s ed w h e re t he G r
o up h as c o n t r ac t ual o b li g a t i o ns to p ro v i de s e
r v i c es w h e re t he es t i m a t ed u n av oi da ble co s ts
to c a r ry o ut t he o b li g a t i on e x c eed t he e x p e c t
ed f ut u re e c ono mic b e n e f i ts to be r e c e i v e d.
The Group had committed financial obligations arising from
leases associated with its joint venture in California. The amounts
provided for in prior year represented management's best estimate
based on scenario analysis of what the Group was expecting to pay
to settle the liabilities. During the period one lease dispute was
settled resulting in a cash outflow of GBP785k (including legal
fees). The second lease dispute was settled subsequent to the
period end but prior to approving these financial statements, for
GBP736k (including estimated legal fees to completion of the legal
process). The estimated legal fees amount to GBP45k and could
differ from management's expectations. The cash was paid in March
2022 .
U. Lease liabilities
2021 2020
Maturity analysis - contractual undiscounted GBP000 GBP000
cash flows
Less than one year 1,211 1,085
Between 2 and 5 years 2,615 3,241
More than 5 years 4,824 -
Total 8,650 4,326
The weighted average incremental borrowing rate applied to the
lease liabilities was 4.16%, lowest rate being 4.00% and highest
rate of 5.75%.
2021 2020
Lease liabilities included in the balance sheet GBP000 GBP000
Current 923 823
Non-current 6,091 3,059
Total 7,014 3,882
Movement on lease liability during the year 2021 2020
GBP000 GBP000
At 1 January 3,882 7,724
New leases entered into 1,698 654
Reassessment of lease term 2,835 (2,231)
Interest charged to the income statement -
continuing operations 155 265
Interest charged to the income statement -
discontinued operations - 74
Lease rentals paid - continuing operations (1,354) (1,219)
Lease rentals paid - discontinued operations - (436)
Disposed of on settlement of lease dispute (169) -
Transferred to held for sale - (998)
Movement as a result of foreign exchange (33) 49
At 31 December 7,014 3,882
V. Ordinary shares
Authorised, issued and fully paid ordinary 2021 2020
shares of 1p
(2020: 20p) each '000 GBP 000 '000 GBP 000
At 1 January 188,751 37,750 188,751 37,750
Cancellation of 19p nominal value - (35,862) - -
Buy-back and cancellation (88,751) (888) - -
At 31 December 100,000 1,000 188,751 37,750
On 28 September 2021. The Scottish Court approved the reduction
of the Company's nominal share value from 20p to 1p per share and
also the cancellation in full of the Capital redemption reserve
(GBP10,312k). Costs associated with the process were expensed to
retained earnings (GBP66k).
On 21 October 2021 the Company completed a tender offer to buy
back 88,751,257 shares for consideration of GBP35,500k (40p per
share). The shares repurchased were cancelled reducing the number
of shares in issue to 100 million. Fees associated with the
buy-back were GBP314k and were expensed to retained earnings.
W. C a s h gene r a t ed f r om o pe r a t i o ns
R e c on c ilia t i o n of loss b ef o re ta x a t i on to cash
g e n e r ated f r om op e r a t i ons, b ef o re separately
disclosed items:
2021 2020
Note GBP 000 GBP 000
Loss before tax - continuing operations (246) (11,923)
Profit/(loss) before tax - discontinued operations I 35,987 (678)
Total profit/(loss) before tax 35,741 (12,601)
Adjustments for:
Separately disclosed items (included in operating
costs) F 1,472 1,453
Other income (2,583)
Depreciation and amortisation L,M,N 1,992 8,161
Profit on disposal of discontinued operations (28,625) -
Profit on disposal of Sports Haven (2,575) -
Profit on sale of property, plant and equipment M (47) -
Profit on sale of intangible assets (68) -
(Reversal of impairment)/impairment of assets M,N (335) 4,349
Net finance costs G (210) 625
Share option expense 334 347
Changes in working capital:
(Increase)/decrease in trade and other receivables (2,162) 2,791
Decrease/(increase) in inventories 192 (179)
Decrease in trade and other payables (448) (1,060)
(Decrease)/increase in customer funds (2,167) 42
Cash generated from operating activities, before
separately disclosed items 511 3,928
X. Other income
Other income recognised in the income statement during the year
is as follows:
2021
Note GBP000
Settlement for early termination of a contract 100
CARES Act credits received - continuing operations 1,426
Profit on disposal of Sports Haven I(a) 2,575
Total - continuing operations 4,101
CARES Act credits received - discontinued operations I(c) 1,057
Total 5,158
CARES Act credits were received given the impact on the Group's
operations of the COVID-19 restrictions imposed in the USA. All
amounts were received in cash during the year. Proceeds from the
settlement for early termination of a contract are due to be
received in early Q2 of 2022.
- Ends -
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END
FR VBLFXLXLFBBD
(END) Dow Jones Newswires
March 31, 2022 02:00 ET (06:00 GMT)
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