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HELICOPTER VIEW With the departure of former CEO Richard McGuire and CFO Tom Hearne, Gambling Insider speaks to Sportech’s new leadership, CEO Andrew Lindley and CFO Nicola Rowlands Hi Andrew, Sportech’s H1 2021 interim results show a significant increase in wagering handle since pre-pandemic. What is the main strategy for the business moving forward? Andrew Lindley: The main strategy of the business leading up to now has been to tidy up the whole Sportech model with a view to reducing the size of the business. This also includes reducing the cost base and getting it to a set of manageable businesses with good potential for growth, rather than necessarily nursing some of the older businesses which require significant investment. The Football Pools were sold some years ago, more recently we have divested ourselves of two other businesses, and that leaves us with two or three core competencies. One of which is the venues business in Connecticut, the other is our lottery technical supply, and the other is online retail, again centred in America, which is pari-mutuel only. The venues business has always had the opportunity of being licensed for sports betting, and we have kept hold of that business in anticipation of receiving a licence and powering Connecticut with sports betting as the new and hot product. What are the biggest challenges Sportech has faced (aside from the pandemic)? AL: We obviously had a disappointment in the middle of the year when we were told we wouldn’t be getting a sports betting licence of our own, but we have worked very hard with the third licensee in the state and the three licensees are the two enormous tribal casinos in
Connecticut. We’ve managed to partner with the equally sizeable Connecticut Lottery Corporation (which is a very, very pleasing result for us) to offer their sports betting product in our venues, which will give our venues the opportunity for growth and sustainability for the long term. So one of our key operational focuses is getting that right and making that an operational beacon across America. What are the achievements and attributes that are making Sportech successful? AL: The lottery business is a UK-based technical business, in Chester. We have a young team of dedicated engineers there who have a very modern cloud-based platform for omni-channel gambling. Our own proprietary lottery vertical stands as the core tenet of that platform, albeit the platform has capability to run any vertical in the gambling space, and we expect to take that product forward into the market – and grow the business with that. Then we have the online retail in America, MyWinners, which is Connecticut-based and is the online retail element of the venues business; and largely serves the Connecticut market. We also have another brand called 123bet which serves the rest of the American market to the extent that it’s available, which is quite a lot of the States but not all of them. We have seen some good growth in particular in the online piece in the last year or so with Covid. One of the core opportunities is to continue that growth going forward. And that, in terms of operations and strategy, is the helicopter view of the interim presentation.
Nicola, could you please run through the headline numbers? Nicola Rowlands: Sportech revenue stands at £13.4m (£18.54m) which is 70% up on last year, but obviously last year was Covid-stricken so that explains the increase. We are getting back toward 2019 levels; we are not quite there yet but the recovery is definitely almost there. Bottom line profit and loss saw a £24m profit, mostly due to the profit on disposals, so the consideration and the proceeds from those disposals are what the value of those businesses were on the balance sheet. This has driven quite a positive impact to the valuation of the balance sheet, with the cash being held on there from disposals at the moment, ready and waiting to be returned to shareholders we announced during August; the £35.5m buyback (or up to), leaving us with sufficient cash to drive these remaining businesses forward. Nicola, what are your plans and strategies to execute innovation within your new CFO position? NR: From a finance point of view, it’s very much working closely with RSI (Rush Street Interactive) – who are the technology behind the lottery that we’ve partnered with. It’s about making sure our systems work with their systems in driving the revenue forward, and we work very much together as a team; bringing the financials through with our numbers effectively and working closely with them on that. We definitely have a much smaller condensed team from a finance perspective and that’s kind of leveraging the investment we’ve
“From a finance point of view, it’s very much working closely with RSI (Rush Street Interactive) – who are the technology behind the lottery that we’ve partnered with”
- Nicola Rowlands
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