The sports betting and horse racing technology company has reported a 39% fall in revenue to £20.2m ($25.9m).
Gross profit fell to £14.4m, while Sportech's loss before tax was £10.7m. However, the group's net cash position only fell by £1.4m despite the impact of the pandemic, which left the company at £9.6m overall, above its projected amount of £8.6m.
Below is an extract from our exclusive interview with CEO McGuire. The full interview will be published in the September/October edition of Gaming America magazine.
How exactly did you manage costs and limit your reduction in cash?
With all the race tracks closing and no content for people to bet on, we feared that would continue through the first half. It’s all very well having a platform – we don’t have online casino. You’ve got to have something people can bet on. A number of tracks did remain open and we started to see people bet on strange things, like Swedish harness racing. There’s a growing appetite from people who want to invest and bet on various products. A couple of race courses in Florida continued and some in the US.
But the online improved for us, which was quite nice. And for some of our US clients, they had their own websites and customers were still betting through their platforms into some of those racetracks, through our technology. So we’re picking up revenue we probably didn’t forecast we’d get. It wasn’t significant but it was very stable. Our international business, where people bet around the globe through our technology, also did much better than we projected in Q2. Then we really took the knife to our cost base; it was a combination of cutting costs more than we thought and having slightly better revenues than we envisaged when we last spoke.
Despite a lack of clarity on sports events and spectators attending those events, how do you forecast 2021 going for Sportech and the wider industry?
In terms of spectator attendances at sports, I think it’ll be a fraction of 2019. They will be spaced out; it’s difficult at a sporting event not to be touching thighs with the person next to you, quite honestly. So they’re going to have to ease back steadily. 2021 we think is going to be a skeleton of 2019, somewhere in the region of 30-40% in terms of spectator attendances. Assuming we don’t get a major second wave, 2022 we would hope we would move back to normal conditions.