REGISTERED NUMBER: SC069140 (Scotland, United Kingdom)
SPORTECH LIMITED (FORMERLY SPORTECH PLC)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
SPORTECH LIMITED
Contents of the Financial Statements
for the Year Ended 31 December 2024
Page
Company Information
1
Strategic Report
2
Report of the Directors
7
Independent Auditors’ Report to the Members of
Sportech Limited
9
Consolidated Income Statement
13
Statement of Comprehensive Income
14
Balance Sheet
15
Statement of Changes in Equity
18
Consolidated Cashflow Statement
21
Notes to the Financial Statements
23
1
SPORTECH LIMITED
Annual Report and Financial Statements
for the Year Ended 31 December 2024
DIRECTORS:
R McGuire
C Whiley
P Humphreys
REGISTERED OFFICE:
Collins House
Rutland Square,
Edinburgh,
EH1 2AA
REGISTERED NUMBER:
SC069140 (Scotland, United Kingdom)
INDEPENDENT AUDITORS:
Sumer Auditco Limited,
Chartered Accountants & Statutory Auditors
14th Floor,
33 Cavendish Square,
London,
W1G 0PW
Cautionary statement
Sections of this annual report, including but not limited to the Strategic Report and the Directors’ Report may
contain forward-looking statements with respect to certain of the plans and current goals and expectations
relating to the future financial condition, business performance and results of the Company. These have been
made by the Directors in good faith using information available up to the date on which they approved this
report. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future
events and circumstances that are beyond the control of the Company and depend upon circumstances that
may or may not occur in the future. There are a number of factors that could cause actual future financial
conditions, business performance, results or developments of the Company to differ materially from the plans,
goals and expectations expressed or implied by these forward-looking statements and forecasts. Nothing in
this document should be construed as a profit forecast.
2
SPORTECH LIMITED
Strategic Report
for the Year Ended 31 December 2024
The Director presents the Strategic Report of the Company for the financial year ended 31 December 2024.
REVIEW OF BUSINESS
Sportech Limited, a private company incorporated in Scotland (formerly Sportech PLC), operates in the U.S.
gaming market, focusing on pari-mutuel wagering and sports betting in Connecticut, alongside online betting
platforms. The 2024 Annual Report outlines the company's financial performance, strategic developments,
and operational focus for the year, reflecting a period of stabilization and strategic realignment post-delisting
from AIM in 2023.
Sportech has two main businesses. Firstly, it runs Sports Bars and other betting venues in Connecticut, USA,
where it has an exclusive license to offer pari-mutuel wagering, it also has a distribution agreement with the
Connecticut Lottery Corporation to provide retail sports betting across retail locations. Secondly, Sportech
provides online gaming through two separate lines of business. Mywinners.com operates under an exclusive
license to offer pari-mutuel betting online in Connecticut, while 123bet.com offers pari-mutuel betting outside
of Connecticut.
FINANCIAL OVERVIEW
The financial performance for the year ended 31 December 2024 reflects a year of stabilization and strategic
focus, with the following key figures:
Revenue
£23.1m
(2023 £26.5m restated)
Gross Profit
£12.7m
(2023 £14.1m restated)
Adjusted EBITDA1
£1.5m
(2023 £ 1.6m)
Profit/(Loss) before Tax £0.1m
(2023 £(0.8)m)
Cash2
£3.6m
(2023 £ 3.8m (restated))
1Adjusted EBITDA includes exceptional items
2 Excludes customer balances
The revenue decline in 2024 was primarily driven by a lower Pari-Mutuel (Tote) betting handle, as competition
for discretionary wagering dollars intensified with the continued expansion of Sports Betting, iCasino gaming,
and the launch of online lotteries in Connecticut. Additionally, Food and Beverage sales at three locations saw
a slight dip, while adverse weather conditions in the early and late parts of the financial year impacted both the
quality of available betting products we received and customer footfall at physical venues.
Despite these challenges, Sportech was successful in largely mitigating the impact through our growth in
Sports Betting net commission, growth in other diversified income streams and aggressively managed costs,
resulting in only a modest reduction in reported EBITDA.
The Group’s Connecticut Venues business recorded a Gross Betting Handle of $179.5 million*, with sports
betting contributing 49.7% and the remainder from Sportech’s long-standing core Tote (Pari-Mutuel or Pool)
retail betting. With nine physical locations and a digital platform, the average annual betting handle per retail
venue remained strong at approximately $17.6 million, with the additional $21.5 million wagered through
Sportech’s digital channel. Outside of Connecticut, the company’s digital platform handled a further $9.8 million
in betting activity during the period.
Corporate initiatives in 2024 were focused on delivering further capital returns to shareholders through rigorous
cost management, expanding business partnerships, divesting non-core assets, implementing key
maintenance initiatives, and returning surplus capital to shareholders. While these strategic actions reduced
EBITDA by approximately £200,000, they helped counterbalance the £3.9 million revenue decline.
As part of its ongoing commitment to shareholders, Sportech returned a further £3.4 million in 2024, bringing
the total returned since 2017 to £124.6 million. The Group’s year-end cash position remained stable at £3.6
million, (2023 £3.8m) reflecting prudent financial management and a solid foundation for further capital returns
to shareholders.
3
* Sportech Revenue recorded is not the betting handle we manage through our physical locations and Pari-Mutuel digital
channels. For Sports Betting revenue booked is the commission received under agreement with the Connecticut Lottery
Corporation. For Pari-Mutuel, the revenue booked is the net ‘take-out’ of each betting pool, this is approximately 20%
of the Handle (the remaining c 80% is the pool shared among successful winners. The $179.5 million referenced is the
customer betting handle through Sportech retail venues, plus its pari-mutuel digital channel in Connecticut.
BUSINESS MODEL
Sportech Limited is an international betting business that owns and operates restaurant/bars and retail gaming
venues in Connecticut, USA, alongside online pari-mutuel betting platforms across the U.S. where legally
permitted. The Group aims to maximize long-term shareholder value by leveraging its exclusive gaming
licenses, advanced technologies, and established brand relationships, while pursuing strategic investments,
trading opportunities, and divestitures to enhance its asset base and deliver tangible returns.
Venues
Since exiting several legacy business lines in 2021, Sportech has streamlined its operations into a more
efficient and focused entity, emphasizing growth in Connecticut and the broader U.S. market. Its Connecticut
venues, enhanced by the 2021 legalization of sports betting, offer a unique combination of pari-mutuel
wagering, Food and Beverage services, and sports betting, positioning Sportech as a pioneer in the U.S. sports
bar and betting sector.
Online
Mywinners.com complements Sportech’s Connecticut venues with pari-mutuel betting, focusing on innovative
products to differentiate from competitors and meet customer needs. Meanwhile, the non Connecticut digital
channel, 123Bet.com has expanded its pan-U.S. pari-mutuel platform, growing its handle from approximately
$2.7 million in 2019 to $9.8 million in 2024. Management’s 2025 initiative to consolidate these online operations
under unified management promises enhanced growth and cost efficiencies.
Strategy
In 2024, Sportech continued its strategic transformation, building on the 2023 delisting from AIM, the exit from
international legacy agreements, and cost reductions that will benefit the Group in 2025 and beyond.
Management remains laser-focused on managing the challenges of a physical retail consumer business,
generating positive operational cash flow, and delivering tangible returns to shareholders, as evidenced by the
£3.4 million capital distribution in 2024.
Under the updated sports betting agreement with the Connecticut Lottery Corporation (CLC), Sportech
transitioned its sports book provider to Fanatics Sportsbook in December 2023 and in 2024 successfully
transitioned its pari-mutuel betting provider, entering new commercial arrangements with leading U.S. betting
operators. These partnerships strengthen Sportech’s position in the U.S. gaming market, driving valuation
growth and supporting further capital returns.
The Group’s strategic aims for 2025 remain:
1.
Delivering further shareholder capital returns
2.
Executing further corporate opportunities
3.
Effectively managing corporate cost base
4.
Maximising further growth opportunities and partnerships across gaming sector
GROUP DEVELOPMENTS
Disposals: As outlined in the FY 2023 Annual Report and subsequent shareholder communications, the
Company was approached by an independent third party expressing interest in acquiring the Group’s major
operating assets. While discussions continued throughout 2024, no binding offer was presented, and no
agreement was reached. As a result, that particular initiative is now closed. During the year the Group sold
and leased back the freehold premises at its Windsor Locks, CT location.
4
Management continue to explore opportunities to divest non-core operational assets and will update
shareholders when appropriate.
Corporate: During 2024 the Group returned £3.4 million to shareholders and continues to evaluate the
required cash to effectively manage the business, balancing maintenance and growth capital investment
against shareholder capital returns. During 2024 there were some senior management changes within the
Connecticut Venues business. The costs savings from the 2023 delisting, further management changes and
general cost saving initiatives should benefit net performance and cash flow in 2025 and beyond.
Connecticut Venues: The Group’s core business line remains Pari Mutuel betting on horse racing. This sector
of the US gaming market noted an industry decline of between 8-10%, the variation depending on specific
States. In Connecticut we noted a similar decline on a like-for-like basis. The weather in north east of the US
in the early and later months of 2024 unfortunately impacted our betting product and customer handle.
Throughout the year, the Group focused on investing in building a solid foundation to expand opportunities for
delivering Sports Betting to retail customers. We continued to invest in maintenance across our locations
during the year and further marketing in Q4 should deliver digital channels improved performance.
Sports Betting: In late 2023, the sports betting licensee the Connecticut Lottery Corporation (CLC) changed
sports betting platform from Rush Street to Fanatics Sportsbook. This change had a negative impact in Q1
2024 as the new sportsbook sought to rebuild market share. Q1 2024 retail sports betting handle declined
22%, however the retail handle improved during the year to close down 12% vs. FY 2023. However, due to
a marginally higher hold and improved digital performance, the net 2024 performance was an increase in
commission to Sportech from Sports Betting and we are confident of future growth under our agreement with
CLC. The gross retail sports betting handle during the year was a healthy $89.2 million (2023 $101.9m), from
which Sportech received a percentage of the 10.03% net hold.
The Company continues to remind investors of the different risk in fixed odds sports betting versus
its traditional pari-mutuel or ‘pool’ business which does not carry the risks of being exposed to the
results of the sporting events.
The key difference in risk between Pari-Mutuel (Tote) betting and Fixed-Odds Sportsbook betting lies in how
liabilities are managed and the exposure to financial risk:
1. Pari-Mutuel (Tote) Betting Risk
Low Risk for Sportech as Operator: In pari-mutuel betting, all wagers go into a pool, and pay-outs are
determined by the total amount wagered minus the take-out (gross commission).
Guaranteed Margin: Sportech as the operator does not have direct financial exposure to the outcome since it
takes a percentage of the pool regardless of the results.
Risk Spread Among Bettors: Since pay-outs fluctuate based on how much is bet on each outcome, the risk is
borne by the bettors, not Sportech.
Key Risk Factors:
Declining betting pools can reduce profitability.
Competition from fixed-odds sportsbooks and other gambling opportunities may impact pari-mutuel handle.
2. Fixed-Odds Sportsbook Risk
Higher Risk for the Operator: In fixed-odds betting, the sportsbook sets odds and accepts bets at
predetermined prices. If the sportsbook misprices an outcome, it can suffer significant losses. Sportech is
exposed to these results.
Direct Exposure: The sportsbook must pay out at the agreed odds, meaning it can take a financial hit if too
many bettors win on a particular outcome.
Requires Risk Management: Operators use tools like odds adjustments, betting limits, and hedging to balance
their books and mitigate large losses. Sportech have initiated a hedging policy and utilised this on two
occasions only during FY 2024.
Key Risk Factors:
5
Liability Management: A sportsbook must balance bets on both sides to minimize exposure.
Sharp Bettors & Line Movements: Professional bettors can exploit mispriced odds.
Unpredictable Outcomes: Unexpected results (e.g., major upsets) can lead to significant payouts and financial
losses.
Summary:
Pari-Mutuel betting is lower risk for operators because they take a percentage of the pool regardless of the
outcome.
Fixed-Odds sportsbooks assume direct financial risk, as they must pay out at fixed odds, requiring active risk
management to remain profitable.
Digital: In recent years the Company has advanced two online pool betting sites in the US, both of which
delivered revenue growth in the year. The 2025 initiative is to bring these separate business under single
management creating further opportunities and efficient cost management.
Sportech Limited Board: The Board continues to provide valuable support and guidance to the management
team as the Company’s evaluates and executes its core strategy.
CHAIRMAN STATEMENT
Sportech’s 2024 performance demonstrates resilience in a challenging market environment, supported by
strategic cost management, asset optimization, and key that helped offset revenue pressures. The company’s
debt-free position, stable cash reserves, and exclusive licensing arrangements provide a solid platform for
2025, as it pursues operational streamlining and opportunitiesd in the expanding U.S. gaming sector.
Nevertheless, sustained progress will require proactive management of ongoing competitive pressures and
external challenges, including regulatory developments and weather-related impacts.
2024 marked another year of consolidation for Sportech Limited, transitioning further from a listed entity to a
private company while deepening partnerships with leading U.S. betting and lottery operators. Positive
progress enabled the Group to return an additional £3.4 million to shareholders through distributions, bringing
total shareholder repayments to £124.6 million since 2017. The Group maintains a debt-free position, with a
net cash balance of c.£3.6 million.
The 2023 delisting from AIM, driven by the unfeasibility of listing costs for a smaller Group post-2021 disposals,
continues to yield cost savings into 2024, enhancing operational efficiency. Looking ahead to 2025, Sportech
remains committed to executing core strategies, fostering growth in its operating businesses, and creating
opportunities for shareholder value.
I extend gratitude to our dedicated employees and Board colleagues for their efforts during this transformative
period, as well as to our shareholders and stakeholders for their ongoing support. Above all, I thank our
customers, whose engagement drives our business, as we strive to enhance our offerings in the coming years.
GROUP OUTLOOK
Sportech Limited stands as a resilient retail consumer operator, having navigated recent global challenges
without issuing equity or increasing debt, delivering superior products to customers in 2024.
Our employees’ passion and purpose inspire the Board, fostering a culture of pride and ownership that enabled
consolidation in 2023 and redefined growth opportunities in 2024. Operating within an attractive U.S. gaming
segment, Sportech leverages its exclusive licenses and builds commercial partnerships, positioning for
sustained growth in 2025.
PRINCIPAL RISKS AND UNCERTAINTIES
The management of the business and the execution of the Company's strategy are subject to a number of
risks. The principal risks that the Company faces relate to the value of its investments. This value is at risk
6
from the principal risks that affect those subsidiaries. Those risks are:
−
Industry competition - this is mitigated through maintaining good customer relationships with current and
potential customers, providing a first-class service to our customers, and developing new and innovative
products to differentiate the Company from the competition.
−
Third party technology - the Company mitigates the risk of dependency on third parties for technology provision
through having punitive clauses in service agreements and also having the option to novate provisions at the
end of contract terms if needed.
−
Regulation – the Company mitigates the risk by ensuring compliance with the requirement of licences and to
oversee regulatory and legal compliance and the Company engages third-party specialist legal counsel to
provide specialist local advice. Regular updates and training are provided to employees and policies and
procedures are in place to which staff are required to adhere.
−
Fixed odds sports betting carries higher financial risk for the Group given the significant handle exposure to
sports betting, compared to the Groups historical pari-mutuel betting significance. In fixed odds, the operator
sets odds and must pay out winnings regardless of the betting pool, exposing them to significant losses if
outcomes deviate from predictions or if they misprice bets. In our case the group is exposed to its share of the
sports book gross gaming revenue or gross profit.
7
SPORTECH LIMITED
Strategic Report (continued)
for the Year Ended 31 December 2024
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
−
Product – the Company mitigates the risk by investing significant amounts in developing new and innovative
products and constructing new Venues with diverse product offerings.
−
Foreign exchange – the Group considers hedging to mitigate significant fluctuations.
−
Political marginalisation in Connecticut – the Group retains lobbying resources in Connecticut.
Directors' statement of compliance with duty to promote the success of the Group
Section 172(1) statement
The board of directors of Sportech Limited consider, both individually and together, that they have acted in the
way they consider, in good faith, would be most likely to promote the success of the company for the benefit
of its members as a whole (having regard to the stakeholders and matters set out in s172(1) of the Companies
Act 2006.
The Board regularly reviews the Group’s principal stakeholders and how it engages with them. This is achieved
through information provided by management and by direct engagement by all of the Group’s Directors with
stakeholders themselves.
The Board continuously enhances its methods of engagement with the workforce. In that regard, the Executive
Chairman of the Board regularly meets with staff and actively encourages dialogue and feedback. The Chair
and Senior Independent Non-Executive Director continued to visit operations during 2024, meeting business
partners, customers and employees in field operations, and human resources. This helps the Board maintain
direct lines of communication.
We aim to work responsibly with our stakeholders, including suppliers, and the anti-corruption and anti-bribery,
equal opportunities and whistleblowing policies are reviewed annually and updated where required.
ON BEHALF OF THE BOARD:
..........................................................
R McGuire
Director
Date: 20 May 2025
8
SPORTECH LIMITED
Report of the Directors
for the Year Ended 31 December 2024
The directors present their report and the financial statements for the year ended 31 December 2024
Directors' responsibilities statement
The Directors are responsible for preparing the Strategic report, Director's report and annual report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law
the directors are required to prepare the group and company financial statements in accordance with UK
adopted International Financial Reporting Standards (IFRS). Under company law the directors must not
approve the financial statements unless they are satisfied that they give a true and fair view of the state of
affairs of the group and company and of the profit or loss of the group for that period.
In preparing these financial statements, the directors are required to:
•
select suitable accounting policies and then apply them consistently;
•
make judgements and accounting estimates that are reasonable and prudent;
•
state whether they have been prepared in accordance with UK adopted IFRS subject to any material
departures disclosed and explained in the financial statements; and
•
prepare the Group and parent's financial statements on the going concern basis unless it is
inappropriate to presume that the Group or parent company will continue in business.
•
assess the group and Parent company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern
The directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the parent company’s transactions and disclose with reasonable accuracy at any time the financial
position of the parent company and enable them to ensure that the financial statements comply with the
requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the group
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the company's website. Legislation in the UK governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
The Directors are responsible for ensuring that the annual report and accounts, taken as a whole, are fair,
balanced, and understandable and provides the information necessary for shareholders to assess the
group’s performance, business model and strategy.
Principal activity
The principal activity of the Group is the operation of betting venues in the state of Connecticut, USA and a
website for online wagering from Connecticut residents under an exclusive and perpetual licence. Revenues
are derived from handle (betting stakes) net of return to bettors for wagering on horse and greyhound racing
and jai alai and customer incentives and is recognised on the day the event takes place. In addition, the
group receives income from sub licensing agreements.
Going Concern
The Directors have prepared detailed financial forecasts with a supporting business plan covering the
medium-term future. These forecasts capture both a base plan and downside scenarios which take into
account macro-economic potential indirect impacts to the business.
Both the base plan and downside scenario forecasts led the Directors to have a reasonable expectation that
the Company and the Group have adequate resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial
statements.
9
Results and dividends
The profit for the year, after taxation and minority interests, amounted to £122k (2023 –(£812k)).
Directors
The directors who served during the year were:
R McGuire
C Whiley
P Humphreys
Insurance
Throughout the period the Group maintained insurance to provide protection to clients against losses arising
from any negligent or dishonesty of the Company's employees.
Disclosure of information to auditors
The director at the time when this Directors report is approved has confirmed that:
•
so far as the Director's are aware, there is no relevant audit information of which the Group's
auditors are unaware, and
•
he has taken all the steps that ought to have been taken as a director in order to be aware of any
relevant audit information and to establish that the Group's auditors are aware of that information
Auditors
The auditors, Sumer Auditco Limited, were appointed during the year and will be reappointed for the ensuing
year in accordance with section 485 of the Companies Act 2006.
ON BEHALF OF THE BOARD:
..........................................................
R McGuire
Date: 20 May 2025
10
SPORTECH LIMITED
Independent Auditors’ report to the Members of
Sportech Limited
Opinion
We have audited the financial statements of Sportech Limited (the ‘parent company’) and its subsidiaries (the
‘group’) for the year ended 31 December 2024 which comprise the Group Income Statement, Group Statement
of Comprehensive Income, Group and Company Balance Sheet, Group and Company Statement of Changes
in Equity, Group Statement of Cash Flows and notes to the financial statements, including a summary of
significant accounting policies. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom
and, as regards the parent company financial statements, as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion:
•
the financial statements give a true and fair view of the state of the Group’s and of the parent
Company’s affairs as at 31 December 2024 and of the group’s profit for the year then ended;
•
the group financial statements have been properly prepared in accordance with IFRSs as adopted by
the United Kingdom;
•
the parent company financial statements have been properly prepared in accordance with UK adopted
international accounting standards and as applied in accordance with the provisions of the Companies
Act 2006; and
•
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities
for the audit of the financial statements section of our report. We are independent of the group in accordance
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the
FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Conclusion relating going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
the accounting preparation of the financial statements is appropriate,
Based on the work we have performed, we have not identified any material uncertainties relating to the event
or conditions that, individually or collectively, may cat significant doubt on the Group’s or the parent Company’s
ability to continue as a going concern for a period of at least twelve months from when the financial statements
are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information contained
within the annual report. Our opinion on the financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
11
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
•
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the parent Company and their environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the parent Company, or returns adequate for our
audit have not been received from branches not visited by us; or
•
the parent Company financial statements are not in agreement with the accounting records and
returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 8 the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the Group or
the parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
In order to identify and assess the risks of material misstatements, including fraud and non-compliance with
laws and regulations that could be expected to have a material impact on the financial statements, we have
considered:
•
the results of our enquiries of management and those charged with governance of their assessment
of the risks of fraud and irregularities;
•
the nature of the group including its management structure and control systems (including the
opportunity for management to override such controls); and
•
management’s incentives and opportunities for fraudulent manipulation of the financial statements
including the company’s group’s remuneration and bonus policies and performance targets; and
the industry and environment in which it operates.
We also considered UK tax and pension legislation and laws and regulations relating to employment and the
preparation and presentation of the financial statements such as the Companies Act 2006.
12
Based on this understanding we identified the following matters as being of significance to the group:
•
the details of the accounting policies applied during the year are set out in the Basis of accounting
section of the financial statements;
•
laws and regulations considered to have a direct effect on the financial statements including UK
financial reporting standards, Company Law, tax and pension legislation and distributable profits
legislation;
•
the timing of the recognition of commercial income;
•
compliance with legislation relating to GDPR, health and safety, local employment law, food safety,
operating licenses and alcohol licenses;
•
management bias in selecting accounting policies and determining estimates;
•
Impairment of investments (parent company only);
•
Impairment of intangible and tangible fixed assets;
•
inappropriate journal entries;
•
manipulation of specific performance measures to meet remuneration targets; and
recoverability of debtors.
We communicated the outcomes of these discussions and enquiries, as well as consideration as to where and
how fraud may occur in the entity, to all engagement team members.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud
and non-compliance with laws and regulations) comprised:
•
we developed an understanding of the key revenue processes from inception to disclosure in the
financial statements and assessed the design and implementation of the controls over the revenue
cycle on betting revenue in Venues;
•
inquiries of management and those charged with governance as to whether the entity complies with
such laws and regulations;
•
assessing impairment of land and buildings and investments and challenging assumptions made by
management;
•
enquiries with the same concerning any actual or potential litigation or claims;
•
discussion with the same regarding any known or suspected instances of non-compliance with laws
and regulation and fraud;
•
assessment of matters reported to management and the result of the subsequent investigation;
•
obtaining an understanding of the policies and controls over the recognition of income and testing their
implementation during the year;
•
identifying and testing journal entries;
•
accessing the recovery of debtors in the period since the balance sheet date and challenging
assumptions made by management regarding the recovery of balances which remain outstanding;
•
reviewing the financial statements for compliance with the relevant disclosure requirements;
•
performing analytical procedures to identify any unusual or unexpected relationships or unexpected
movement in account balances which may be indicative of fraud;
•
reviewing the minutes of Board meetings; and
•
evaluating the underlying business reasons for any unusual transactions.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities,
including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s
controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from
fraud might be inherently more difficult to detect than irregularities that result from error. As explained above,
there is an unavoidable risk that material misstatements may not be detected, even though the audit has been
planned and performed in accordance with ISAs (UK).
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of
our auditor’s report.
13
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company
and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Atulya Mehta FCCA (Senior Statutory Auditor)
For and on behalf of Sumer Auditco Limited
Statutory Auditors
14th Floor
33 Cavendish Square
London
Date 20 May 2025
14
SPORTECH LIMITED
Consolidated Income Statement
for the Year Ended 31 December 2024
Restated
2024
2023
Note
£000
£000
Revenue
4
23,053
26,505
Cost of sales
(10,363)
(12,398)
Gross profit
12,690
14,107
Marketing and distribution costs
(253)
(328)
Contribution
12,437
13,779
Operating costs
(12,943)
(14,344)
Other income
27
596
-
Operating profit/(loss)
90
(565)
Finance costs
9
13
(289)
Finance income
9
13
42
Profit/(Loss) before tax
116
(812)
Tax
10
6
-
Profit/(Loss) for the year – continuing operations
122
(812)
Profit after taxation from discontinued operations
-
-
Profit/(loss) for the year
122
(812)
Attributable to:
-
-
Owners of the Company
122
(812)
15
SPORTECH LIMITED
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December 2024
2024
2023
Note
£000
£000
Profit/(loss) for the year
122
(812)
Other comprehensive income/(expense):
Items that may be subsequently reclassified to profit and loss
Currency translation differences
296
(438)
418
(1,250)
Total other comprehensive income/(expense) for the year, net of tax
418
(1,250)
Total comprehensive income/(expense) for the year
418
(1,250)
Attributable to:
Owners of the Company
418
(1,250)
16
SPORTECH LIMITED
Consolidated Balance Sheet
As at 31 December 2024
Restated
2024
2023
Note
£’000
£’000
ASSETS
Non-current assets
Goodwill
11
-
-
Intangible fixed assets
12
6,140
6,164
Property, plant and equipment
13
732
4,142
Right-of-use assets
14
7,847
3,834
Trade and other receivables
17
172
169
Deferred tax assets
15
15
Total non-current assets
14,906
14,324
Current assets
Trade and other receivables
17
532
4,851
Inventories
16
121
133
Current tax receivable
102
102
Cash and cash equivalents
18
3,923
4,196
Total current assets
4,678
9,282
TOTAL ASSETS
19,584
23,606
LIABILITIES
Current liabilities
Trade and other payables
19
(4,209)
(8,658)
Lease liabilities
15
(998)
(2,852)
Current tax liabilities
-
(6)
Total current liabilities
(5,207)
(11,516)
Net current assets
14,377
12,080
Non-current liabilities
Lease liabilities
15
(8,461)
(3,193)
Total non-current liabilities
(8,461)
(3,193)
TOTAL LIABILITIES
(13,668)
(14,710)
NET ASSETS
5,916
8,897
EQUITY
Ordinary shares
23
972
972
Other reserves
4,461
4,165
Retained earnings
483
3,760
TOTAL EQUITY
5,916
8,897
17
These financial statements on pages 9 to 16 were approved by the Board of Directors on 20 May 2025 and were
signed on its behalf by:
..........................................................
R McGuire
Director
Company Registration Number: SC069140
18
SPORTECH LIMITED
Company Balance Sheet
As at 31 December 2024
Note
2024
£000
2023
£000
ASSETS
Non-current assets
Intangible fixed assets
12
2
109
Investment in subsidiaries
11,095
15,860
11,097
15,969
Current assets
Trade and other receivables
17
29
203
Cash and cash equivalents
431
1,106
460
1,309
TOTAL ASSETS
11,557
17,278
LIABILITIES
Current liabilities
Trade and other payables
19
(6,057)
(2,709)
Current tax payable
-
(6)
(6,057)
(2,715)
Net current liabilities
(5,598)
(1,406)
NET ASSETS
5,500
14,563
EQUITY
Ordinary shares
23
971
971
Other reserves
1,231
1,231
Retained earnings carried forward
3,298
12,361
TOTAL EQUITY
5,500
14,563
The loss after tax for the Company for the year was (£5,664k) (2023: (£2,795k))
The Company financial statements on pages were approved and authorised for issue by the Board of Directors on 20 May 2025
and were signed on its behalf by:
R McGuire
Director
Company Registration Number: SC069140
19
SPORTECH LIMITED
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2024
Other reserves
Ordinary
shares
Capital
redemption
reserve
Other
reserve
Foreign
exchange
reserve
Retained
earnings
Total
£000
£000
£000
£000
£000
£000
At 1 January 2024
971
917
314
2,934
3,761
8,897
Comprehensive income
Profit for the year
-
-
-
-
122
122
Other comprehensive items
Currency translation differences arising in year
-
-
-
296
-
296
Total other comprehensive items
-
-
-
296
122
418
Transactions with owners
Capital Distribution paid
-
-
-
-
(3,399)
(3,399)
Total transactions with owners
-
-
-
-
(3,399)
(3,399)
Total changes in equity
-
-
-
296
(3,277)
(2,891)
At 31 December 2024
971
917
314
3,230
483
5,916
20
Other reserves
Ordinary
shares
Capital
redemption
reserve
Other
reserve
Foreign
exchange
reserve
Retained
earnings
Total
£000
£000
£000
£000
£000
£000
At 1 January 2023
1,000
888
314
3,372
8,464
14,038
Comprehensive income
Loss for the year
-
-
-
-
(812)
(812)
Other comprehensive items
Currency translation differences arising in year
-
-
-
(437)
-
(437)
Total other comprehensive items
-
-
-
(437)
(812)
(1,249)
Transactions with owners
Capital Distribution paid
(3,399)
(3,399)
Share buy back
(29)
29
-
-
(493)
(493)
Total transactions with owners
(29)
29
-
-
(3,892)
(3,892)
Total changes in equity
(29)
29
-
(437)
(4,704)
(5,141)
At 31 December 2023
971
917
314
2,935
3,760
8,897
21
SPORTECH LIMITED
Company Statement of Changes in Equity
for the Year Ended 31 December 2024
Other reserves
Ordinary
shares
Capital
redemption
reserve
Other
reserve
Retained
earnings
Total
£000
£000
£000
£000
£000
At 31 December 2022
1,000
888
314
19,048
21,250
Comprehensive expense
Loss for the year
-
-
-
(2,795)
(2,795)
Transaction with owners
Share buy back
(29)
29
-
(493)
(493)
Distribution
(3,399)
(3,399)
At 31 December 2023
971
917
314
12,361
14,563
Comprehensive expense
Loss for the year
-
-
-
(5,664)
(5,664)
Transaction with owners
Distribution
(3,399)
(3,399)
At 31 December 2024
971
917
314
3,298
5,498
22
SPORTECH LIMITED
Consolidated Statement of Cashflows
for the Year Ended 31 December 2024
Note
2024
£000
2023
£000
Cash flows from operating activities
Cash generated from operations, before separately disclosed items
1,440
900
Tax received
10
11
108
Net cash generated from operating activities before separately disclosed items
1,451
1,009
Cash outflows - separately disclosed items
5
(253)
(364)
Cash generated from operations
1,198
645
Cash flows from investing activities
Disposal of Bump 50:50 (net of cash disposed of and transaction costs)
-
1,012
Consideration paid for Lot.to Systems Limited, net of cash acquired
-
500
Disposal of Windsor Locks, Bradley (net of disposal costs)
27
3,566
-
Purchase of property, plant and equipment
13
(132)
(290)
Net cash (used in)/generated from investing activities
(3,434)
1,222
Cash flows used in financing activities
Principal paid on lease liabilities
(1,246)
(1,201)
Interest paid on lease liabilities
(334)
(278)
Share buy-back
-
(493)
Dividend paid
(3,399)
(3,399)
Interest received
13
42
Cash used in financing activities
(4,966)
(5,328)
Net decrease in cash and cash equivalents
(335)
(3,460)
Effect of foreign exchange on cash and cash equivalents
61
(155)
Cash and cash equivalents at the beginning of the year
4,196
7,811
Group cash and cash equivalents at the end of the year
18
3,923
4,196
Represented by:
Cash and cash equivalents
18
3,923
4,196
Less customer funds
18
(353)
(367)
Adjusted net cash at the end of the year
18
3,570
3,829
23
SPORTECH LIMITED
Company Statement of Cashflows
for the Year Ended 31 December 2024
Note
2024
£000
2023
£000
Cash flows from operating activities
Cash (used in)/generated from operations, before separately
disclosed items
(698)
1,029
Interest received
13
42
Net cash (used in)/generated from operating activities before
separately disclosed items
(685)
1,071
Cash outflows from separately disclosed items
(157)
(364)
Net cash (used in)/generated from operating activities
(842)
707
Cash flows from investing activities
Disposal of Windsor Locks, Bradley (net of disposal costs)
3,566
-
Net cash from investing activities
3,566
-
Cash flows from financing activities
Shareholder distribution
(3,399)
(3,892)
Net cash used in financing activities
(3,399)
(3,892)
Net decrease in cash and cash equivalents
(675)
(3,184)
Net cash and cash equivalents at the beginning of the year
1,106
4,291
Net cash and cash equivalents at the end of the year
431
1,107
24
SPORTECH LIMITED
Notes to the Financial Statements
for the Year Ended 31 December 2024
1.
GENERAL INFORMATION
The company is a private limited company, limited by shares and is incorporated in Scotland. The
address of its registered office is Collins House, Rutland Square, Edinburgh, Midlothian, Scotland EH1
2AA
2.
CRITICAL JUDGEMENTS AND ESTIMATES
Critical judgements and estimates have been made in the following areas:
Assets held for sale and discontinued operations
The Board is required to consider the requirements of IFRS 5 Non-current Assets Held for sale and
Discontinued Operations as to whether the assets of any disposal group or asset which is potentially
going to be disposed of, should be classified as Held for Sale. In general, the following conditions must
be met for an asset (or 'disposal group') to be classified as held for sale:
• management is committed to a plan to sell;
• the asset is available for immediate sale;
• an active programme to locate a buyer is initiated;
•
the sale is highly probable, within 12 months of classification as held for sale (subject to
limited exceptions);
• the asset is being actively marketed for sale at a sales price reasonable in relation to its
fair value; and
actions required to complete the plan indicate that it is unlikely that plan will be significantly
changed or withdrawn.
In addition, a discontinued operation is a component of the Group that either has been disposed of, or
is classified as held for sale, and
(a) represents a separate major line of business or geographical area of operations;
(b) is part of a single co-ordinated plan to dispose of a separate major line of business or geographical
area of operations; or
(c) is a subsidiary acquired exclusively with a view to resale.
Carrying value of Sportech Venues tangible and intangible assets
To determine whether an impairment of the tangible or intangible assets held by the Sportech Venues
division has occurred, the Group considered in isolation the assets and leasehold improvements at its
sports bar venue in Stamford, Connecticut and then the assets (tangible and intangible) of the cash
generating unit (“CGU”) as a whole. The key assumptions used in estimating future cash flows for value-
in-use measures, for both the stand-alone venue and the CGU as a whole were:
Stamford alone:
-
handle and food and beverage (“F&B”) earnings achieved since the venue’s opening in June
2017 and the likely growth achievable in the next four years;
-
costs of sale percentages and overhead cost levels achievable;
-
sports betting commission likely to be earned at the venue; and
-
the length of the lease during which the venue would be operated.
CGU as a whole:
-
rates of industry handle growth/decline impacting the retail and online product;
-
the enforcement by the State of Connecticut of the Company’s exclusive rights to operate online
wagering and the CGU’s ability to drive value from its exclusivity in the State; and
-
discount rate, which appropriately reflect the risks associated with the CGU.
25
These assumptions, and the judgements of management that are based on them, are subject to change
as new information becomes available. Economic conditions and government policy changes can also
impact on the assumptions and discount rates applied, which are reviewed annually. Further details are
disclosed within notes 13 and 14 of the Annual Report. Critical judgements and estimates have been
made in the carrying value of investments and in the recoverability of the intercompany receivable. To
determine whether an impairment exists in any of the investments or intercompany receivables held by
the Company, management estimate the recoverable value of each of those items. Estimating the
recoverable value is subject to a number of key assumptions in forecasting future cash flows for value-
in-use. Those key assumptions applied are:
-
Industry handle rates;
-
F&B revenues achieved;
-
commissions achieved from sports betting;
the retention of the agency agreement to provide sports betting past the end of the current contract
term;
-
levels of capital expenditure required; and discount rates, which appropriately reflect the risks
associated with specific cash generating units.
Those assumptions, and the judgements of management that are based on them, are subject to change
as new information becomes available. Economic conditions and government policy changes can also
impact on the discount rates applied, which are reviewed annually.
3.
ACCOUNTING POLICIES
3.1 Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively IFRSs).
Details of the Company's accounting policies, including changes during the year, are included in note 3.2.
The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006
and elected not to present its own Profit and loss account or Statement of comprehensive income in these
consolidated financial statements.
Transition from FRS 101 to Full IFRS
Effective from 1 January 2024, the parent company transitioned from using FRS 101 to the full International
Financial Reporting Standards (IFRS) framework. This change aims to enhance the consistency, transparency,
and comparability of our financial statements in line with global accounting standards. There is no impact
expected from this transition
In preparing these consolidated financial statements, management has made judgments, estimates and
assumptions that affect the application of the Company accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised
prospectively.
The areas where judgments and estimates have been made in preparing the consolidated financial statements
and their effects are disclosed in note 2
3.1.1 Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis.
3.1.2 Changes in accounting policies
i) New standards, interpretations and amendments effective from 1 January 2023
The company has applied the following standards and amendments for the first time for their annual reporting
period commencing 1 January 2023.
26
•
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2
•
Definition of Accounting Estimates – Amendments to IAS 8
•
Deferred Tax related to Assets and Liabilities arising from a Single Transaction– Amendments to IAS 12
ii) New standards, interpretations and amendments not yet effective
The following new standards, interpretations and amendments, which are not yet effective and have not been
adopted early in these consolidated financial statements, will or may have an effect on the Company's future
consolidated financial statements:
Standards with effective date from …
•
International Tax Reform—Pillar Two Model Rules – Amendments to IAS 12
Standards with effective date from 1 January 2024
•
Non-current Liabilities with Covenants – Amendments to IAS 1 and Classification of Liabilities as Current or
Non current – Amendments to IAS 1
•
Lease Liability in a Sale and Leaseback – Amendments to IFRS 16
•
Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7
•
IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS
S2Climate-related Disclosures
Standards with effective date from 1 January 2025
•
Lack of Exchangeability – Amendments to IAS 21
The director anticipates that the adoption of these Standards in future periods may have an impact on the results
and net assets of the Company, however, it is too early to quantify this.
The director anticipates that the adoption of other Standards and interpretations that are not yet effective in
future periods will only have an impact on the presentation in the consolidated financial statements of the
Company.
3.2 Accounting policies
A summary of more important Group accounting policies follows. These policies have been applied
consistently to all the years presented.
(a) Subsidiaries
Subsidiaries are all entities over which the Group has control. Control of an entity is deemed to exist when
the Group is exposed to, or has rights to, variable returns through its power over that entity. The existence
and effect of potential voting rights that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The
consideration transferred for the acquisition of a subsidiary is the fair value of the assets given, equity
instruments issued and liabilities incurred or assumed at the date of exchange. The consideration transferred
includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
27
Contingent consideration is recognised at fair value at the acquisition date and remeasured at each balance
sheet date until settlement. The revaluation amount is debited/credited to the income statement in the period
in which the estimated fair value is increased/decreased. Acquisition related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The excess of the cost of acquisition over the fair
value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of
acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised
directly in the income statement.
Transactions between subsidiaries are performed on an arm’s-length basis. Inter-company transactions,
balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses
are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the
Group.
(b) Revenue
The Group generally recognises revenue at a point in time when it transfers control over a product or
delivers a service to a customer. The following is a description of principal activities (separated by reportable
segment), from which the Group generates its revenues.
Sportech Venues:
This division operates betting venues in the state of Connecticut, USA and a website for online wagering
from Connecticut residents under an exclusive and perpetual licence. Its revenues are derived from handle
(betting stakes) net of return to bettors for wagering on horse and greyhound racing and jai alai and
customer incentives and is recognised on the day the event takes place. Betting stakes for future events that
have not taken place at the balance sheet date are deferred. It also generates revenue from:
Other revenue type
Providing a full turn-key service for the operation of racebooks at casinos
Food and beverage sales in venue
Programme sales
Rental of space in venues for parties/events
Sale of lottery tickets on behalf of the state lottery
ATM transaction fees
Source market fees
Parking lot rental for events e.g. carnival, rodeo
Sports Betting revenue share
Sports Betting - Principal versus Agent:
The Group evaluates the principal versus agent considerations, in determining whether it is appropriate to
record the gross amount of revenues and related costs, or the net amount earned as commissions. If the
Group were the principal in a transaction and controlled the specific good or service before it is transferred to
the customer, revenue would be recorded gross; however, in the arrangement with CLC, revenue is
recorded on a net basis as this is not the case. For retail sports services, the Group does not control the
promised goods or services and, therefore, records the net amount of revenue earned as a commission.
Evidence for the agent conclusion comprises amongst other indicators;
i.
The terminals used in the retail venues for sports betting are not the property or responsibility of
Sportech and were not purchased or rented by Sportech;
ii.
The risk on transactions is not Sportech’s and Sportech does not manage the sportsbook risk;
iii.
Sportech does not set the sportsbook prices;
iv.
Sportech is not responsible for credit risk (chargebacks);
v.
The Connecticut Lottery Corporation is the licence holder and the customer contracts with CLC not
Sportech; and
vi.
If a loss is made on the sportsbook, that loss is carried forward until covered
Sportech Digital:
28
123Bet.com Revenue
The Group owns the brand 123Bet.com and operates a pari-mutuel betting site taking bets on horse and dog
racing from customers through its affiliate provider eBet Technologies Inc. Wagers net of customer winnings
and loyalty awards is recognised as revenue with associated costs included in cost of sales.
Lottery software supply
The Group’s subsidiary Lot.to Systems Limited provided online lottery software to customers globally. The
service fees are either fixed monthly fees, percentages of handle through the software or a combination of both
and most contracts can have fixed monthly “minimums”. Revenue was recognised as the obligations under the
contract are met. This unit was sold in early 2023.
(c) Deferred income
Deferred income includes the value of stakes placed prior to the end of the financial period in respect of
competitions and sporting events held subsequent to the end of the financial period and income received in
advance of a service or product being delivered.
(d) Taxation
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation and establishes provisions, where appropriate, on the basis
of amounts expected to be paid to the tax authorities.
Tax is recognised in the income statement, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.
However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability
in a transaction other than a business combination that, at the time of the transaction, affects neither
accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the balance sheet date and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where
the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income
taxes levied by the same taxation authority, on either the same or different taxable entities, where there is an
intention to settle the balances on a net basis.
The Group applies IFRIC 23 Uncertainty over Income tax treatments. IFRIC 23 provides guidance on the
accounting for current and deferred tax liabilities and assets in circumstances in which there is uncertainty over
income tax treatments. The interpretation requires; the group to determine whether uncertain tax treatments
should be considered separately, or together as a group, based on which approach provides better predictions
of the resolution; the group to determine if it is probable that the tax authorities will accept the uncertain tax
treatment; and if it is not probable that the uncertain tax treatment will be accepted, measure the tax
uncertainty based on the most likely amount or expected value, depending on whichever method better
predicts the resolution of the uncertainty. This measurement is required to be based on the assumption that
each of the tax authorities will examine amounts they have a right to examine and have full knowledge of all
related information when making those examinations.
29
(e) Foreign currencies
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of
the primary economic environment in which the entity operates (the ‘functional currency’). The consolidated
financial statements are presented in Sterling (£), which is the Company’s functional currency and the Group’s
presentation currency.
Transactions and balances
Transactions in foreign currencies are translated into the functional currency at the rate of exchange ruling at
the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of
exchange ruling at the balance sheet date. Foreign exchange gains and losses, resulting from the settlement
of such transactions and from the translation at year end exchange rates of monetary assets and liabilities
denominated in foreign currencies, are recognised in the income statement, except where deferred in other
comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in
the income statement within finance income or costs. All other foreign exchange gains and losses are
presented in the income statement within operating profit.
Group companies
The results and financial position of all the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
– assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that
balance sheet;
– income and expenses for each income statement are translated at average exchange rates (unless this
average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at the rate on the dates of the transactions); and
– all resulting exchange differences are recognised in other comprehensive income.
(f) Property, plant and equipment
Property, plant and equipment are carried at historical cost less accumulated depreciation and any impairment.
Cost includes the original purchase price of the asset and the costs attributable in bringing the asset to its
working condition for its intended use and any associated borrowing costs. Assets in the course of construction
are not depreciated until the asset is completed. Subsequent costs are included in the asset’s carrying amount
or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying
amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are
recognised within administrative expenses in the income statement.
Assets in the course of construction are capitalised when first brought into use and depreciated from this date.
(g) Depreciation
Depreciation is provided on a straight-line basis to write off the cost of property, plant and equipment down to
residual value over their anticipated useful lives as following period:
Owned land and buildings
Not depreciated
Leasehold Improvements
Over the period of the lease or 25 years whichever is shorter
Plant and machinery
Between 3 and 12 years
Fixtures and fittings
Between 3 and 12 years
30
Assets in the course of construction are not depreciated until they are ready for use.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet
date.
(h) Right-of-use assets and lease liabilities
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease
incentives received, and increased for:
•
lease payments made at or before commencement of the lease;
•
initial direct costs incurred; and
•
the amount of any provision recognised where the group is contractually required to dismantle, remove or
restore the leased asset (typically leasehold dilapidations).
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate
(taking into account the lease term being considered) in the jurisdiction in which the asset resides as the discount
rate.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease
payments made. It is remeasured when there is a change in the future lease payments arising from a change in an
index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or
as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be
exercised or a termination option is reasonably certain not to be exercised.
The Group has applied judgement to determine the lease term for some lease contracts in which it is a
lessee that include renewal options and break clauses. The assessment of whether the Group is reasonably
certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities
and right-of-use assets recognised.
(i) Goodwill
Goodwill arising on consolidation represents the excess of the fair value of consideration given over the fair
value of the separately identifiable net assets acquired. Goodwill arising on acquisitions before the date of
transition to IFRSs (4 January 2005) has been frozen at the previous UK GAAP net book value at the date of
transition, subject to being tested for impairment annually at the year end date. There is potential contingent
consideration receivable of up to a further £500k which has been fair valued at £nil. The receipt of further
amounts are contingent on certain activities being transacted through digital channels within a time period
which the Directors believe are unlikely to be met.
Goodwill is allocated to specific CGUs for the purpose of impairment testing. The allocation is made to the
CGU that is expected to benefit from the business combination in which the goodwill arose.
Goodwill is carried at cost less accumulated impairment losses.
(j) Intangible fixed assets
Intangible fixed assets are held at cost less accumulated amortisation and impairment. Amortisation is charged
on a straight-line basis over the estimated useful life of the intangible fixed asset.
Software
Externally acquired computer software licences are capitalised on the basis of the costs incurred to acquire
and bring to use the specific software. These costs are amortised over their estimated useful lives or
contractual period if shorter (five to ten years).
Development costs that are directly attributable to the design and testing of identifiable and unique software
products controlled by the Group are recognised as intangible assets when the following criteria are met:
– it is technically feasible to complete the software product so that it will be available for use;
31
– management intends to complete the software product;
– it can be demonstrated how the software product will generate probable future economic benefits;
– adequate technical, financial and other resources to complete the development and to use or sell the
software product are available; and
– the expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software product include the software
development employee costs and an appropriate proportion of relevant overhead. Other development
expenditure that does not meet these criteria are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset in a subsequent period.
Software development costs are amortised over their estimated useful lives, which do not exceed 12 years.
Licences
Licences acquired in a business combination are recognised at fair value at the acquisition date. Licences that
have a finite useful life are carried at cost less accumulated amortisation. Amortisation is calculated using the
straight-line method to allocate cost of licences over their estimated useful lives of 15 to 20 years. Licences
with an infinite life (licences granted in perpetuity) are held at cost or fair value at acquisition date and tested
annually for impairment.
(k) Investments in subsidiaries
Investments in subsidiaries are carried at historic cost less any impairment. Annual impairment reviews are
performed.
(l) Impairment reviews
Assets that are subject to amortisation or depreciation are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill and intangible
assets with indefinite lives are subject to an annual review for impairment in accordance with IAS 36
‘Impairment of Assets’. The recoverable amount is the higher of an asset’s fair value less costs to sell and
value-in-use. For the purpose of assessing impairments, assets are grouped at the lowest levels at which there
are separately identifiable cash flows. Any impairment losses are recognised in the income statement in the
year in which they occur. Any impairment loss recognised on goodwill is not reversed.
All other individual assets are tested for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. With the exception of goodwill, all assets are subsequently
reassessed for indications that an impairment loss previously recognised may no longer exist at each reporting
date.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is
increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had no impairment loss been recognised for
the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in
profit or loss to the extent that it eliminates the impairment loss which has been recognised for the asset in
prior years. Any increase in excess of this amount is treated as a revaluation increase.
(m) Pension obligation
The Group operates various pension schemes.
The schemes are generally funded through payments to insurance companies. The Group now only has
defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed
contributions into a separate entity.
The Group has no legal or constructive obligations to pay further contributions if the fund does not hold
sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
32
A defined benefit plan is a pension plan that is not a defined contribution plan. Typically, defined benefit plans
define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or
more factors such as age, years of service and compensation.
For defined contribution plans, the Group pays contributions to privately administered pension insurance
plans on a mandatory, contractual or voluntary basis.
The Group has no further payment obligations once the contributions have been paid. The contributions are
recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an
asset to the extent that a cash refund or a reduction in future payments is available.
(n) Financial instruments
(i) Recognition
Trade receivable and debt securities issued are initially recognised when they are originated. All other
financial assets and liabilities are initially recognised when the Group becomes a party to the contractual
provisions of the instruments.
Financial assets
(ii) Classification
The Group classifies its financial assets in the following measurement categories:
· those to be measured subsequently at fair value (either through OCI or through profit or loss), and
· those to be measured at amortised cost.
The classification depends on the Group's business model for managing the financial assets and the
contractual terms of the cash flows.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its
business model for managing financial assets, in which case all affected financial assets are classified on the
first day of the first reporting period following the change in business model.
(iii) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit
or loss. Changes in the fair value of financial assets at FVTPL are recognised in the statement of
comprehensive income.
Financial assets measured at amortised cost arise principally through the provision of services to customers
(e.g. trade receivables), but also incorporate other types of contractual monetary asset. They are initially
recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are
subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary
course of business. They are generally due for settlement within 365 days and are therefore all classified as
current, those due after a longer period are classified in non-current assets. Trade receivables are recognised
initially at the amount of consideration that is unconditional. The Group holds the trade receivables with the
objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost
using the effective interest method. Due to the short-term nature of the current receivables, their carrying
amount is considered to be the same as their fair value.
Other receivables consist of amounts generally arising from transactions outside the usual operating
activities of the Group such as the proceeds from disposal of investment. Due to the short-term nature of the
other current receivables, their carrying amount is considered to be the same as their fair value. For the
majority of the non-current receivables, the fair values are also not significantly different to their carrying
amounts.
(iv) Derecognition
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which
33
substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the
Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain
control of the financial asset.
The Group enters into transactions whereby it transfers assets recognised in its statement of financial
position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these
cases, the transferred assets are not derecognised.
(v) Impairment
The Group assesses all types of financial assets that are subject to the expected credit loss model:
· trade receivables
· debt investments carried at amortised cost
· cash and cash equivalents
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. Trade receivables are grouped based on their days past due.
The historical credit losses assessed are adjusted to reflect current and forward-looking information on
macroeconomic factors affecting the ability of the customers to settle the receivables.
Financial liabilities
(vi) Classification and measurement
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as
at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition.
Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest
expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised
cost using the effective interest method. Interest expense and foreign exchange gains and losses are
recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
(vii) Derecognition
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or
expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the
modified liability are substantially different, in which case a new financial liability based on the modified terms
is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the
consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or
loss.
(viii) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial
position when, and only when, the Group currently has a legally enforceable right to set off the amounts and it
intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
(o) Cash and cash equivalents
Cash and cash equivalents shown on the balance sheet represent cash in hand, cash in vaults and cash
held in current accounts, both owned by the Group and held on behalf of customers. Any bank overdrafts used
by the Group are shown within trade and other payables. Positive cash balances and overdrafts are only offset
within cash and cash equivalents to the extent that they form part of a cash-pooling arrangement implemented
by the Group where the balances will be settled on a net basis.
(p) Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the
redemption value is recognised in the income statement over the period of the borrowings using the effective
interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to
defer settlement of the liability for at least twelve months
after the balance sheet date.
(q) Trade receivables
34
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using
the effective interest method, less provision for impairment, being the difference between the assets’ carrying
amounts and the present value of the estimated future cash flows, discounted at the original effective interest
rate. Individually significant receivables are considered for impairment when they are past due or when other
objective evidence is received that a specific customer will default or delinquency in payment will arise. Any
subsequent recovery of amounts written off is credited to the income statement.
(r) Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method.
(s) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first in, first
out method. Net realisable value is the estimated selling price in the ordinary course of business.
(t) Provisions
Provisions for onerous contracts, legal claims and dilapidations are recognised when the Group has: a
present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will
be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised
for future operating losses where the Group has no contractual obligation to deliver the service or product.
Provisions payable over a period greater than 12 months are discounted using an appropriate market risk-free
discount rate.
(u) Leases exempt from IFRS 16
The Group excludes leases with low-value assets (<£4,000 asset values) and leases with terms of less than
12 months from IFRS 16 requirements to capitalise the lease and hold a corresponding liability on the balance
sheet. Instead, payments made under these leases (net of any incentives received from the lessor) are
charged to the income statement on a straight-line basis over the period of the lease.
(v) Separately disclosed items
The Group defines separately disclosed items as those items which, by their nature or size, if not separately
identified, would distort the comparability of the Group’s results from year to year.
(w) Government grants
Grants for revenue expenditure are shown gross in the income statement in other income. Where retention
of a government grant is dependent on the Group satisfying certain criteria, it is initially recognised as deferred
income. When the criteria for retention have been satisfied, the deferred income balance is released to the
income statement.
(x) Share capital and reserves
Ordinary shares are classed as equity. Incremental costs directly attributable to the value of new shares or
options are shown in equity as a deduction from the proceeds in the share premium account where the
shares were issued at a premium or, where issued at par or where the issue costs exceed the premium on
the issue, to retained earnings.
The capital redemption reserve represents the nominal value of shares cancelled.
Other reserve includes the cumulative actuarial gains and losses charged/credited to this reserve in
relation to defined benefit pension schemes and also merger relief.
Foreign exchange includes gains/losses arising on retranslating the net assets of overseas operations
Retained earnings includes cumulative net gains and losses recognised in the consolidated statement of
comprehensive income.
(y) Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be
recovered principally through a sale transaction rather than through continuing use and a sale is considered
35
highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell,
except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and
investment property that are carried at fair value and contractual rights under insurance contracts, which are
specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to
fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of
an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A
gain or loss not previously recognised by the date of the sale of the noncurrent asset (or disposal group) is
recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while
they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group
classified as held for sale continue to be recognised. Non-current assets classified as held for sale and the
assets of a disposal group classified as held for sale are presented separately from the other assets in the
balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other
liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for
sale and that represents a separate major line of business or geographical area of operations, is part of a
single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired
exclusively with a view to resale. The results of discontinued operations are presented separately in the
statement of profit or loss.
36
4.
TURNOVER
Restated
Note
2024
2023
By type
£000
£000
Full turn key Take-out
15,526
17,608
Commission Revenue (including Sports Betting)
2,365
2,627
SM Fee Revenue
779
1,993
F&B Revenue
3,223
3,478
Other Revenue
1,160
799
Revenue
23,053
26,505
By geographic segment
US
23,053
26,454
UK
-
51
Total
23,053
26,505
5.
SEPARATELY DISCLOSED ITEMS
2024
2023
Note
£000
£000
Included in operating costs:
Redundancy and restructuring costs
239
-
Corporate activity costs
(4)
54
Release of provision for Spot the Ball VAT refund
(55)
-
Costs in relation to exiting India
18
13
Costs in relation to delisting from London Stock Exchange
-
297
198
364
Below is a summary of cash outflows from separately disclosed items:
2024
2023
£000
£000
37
Cash outflows from separately disclosed items:
Redundancy and restructuring costs
239
-
Corporate activity costs
11
54
Release of provision for Spot the Ball VAT refund
-
-
Costs in relation to exiting India
18
13
Costs in relation to delisting from London Stock Exchange
-
297
Cash outflows from separately disclosed items – total
268
364
6. Auditor remuneration
Fees paid to the Auditors of the consolidated financial statements during the period comprise:
2024
2023
£000
£000
Audit fees
98
100
Total fees
98
100
7. Employment costs
Average number of monthly employees (full-time equivalents) including Executive Directors comprised:
Continuing and discontinued operations
Total
2024
Total
2023
Number
Number
Sales and marketing
5
5
Operations and distribution
115
141
Administration and management
15
16
Total employees
135
162
Their aggregate remuneration comprised:
Total
2024
2023
£000
£000
38
Wages and Salaries
5,385
5,711
Social security costs
506
513
Pension costs – defined contribution scheme (note 20)
68
62
Employee remuneration, excluding share option charges
5,959
6,286
Share option expense
-
-
Total remuneration
5,959
6,286
8. Directors remuneration
Total
2024
2023
£000
£000
Short-term employee benefits
289
396
Pay in lieu of notice
-
-
Total remuneration
289
396
9. Net finance costs
2024
2023
£000
£000
Finance costs:
IFRS 16 liability remeasurement
651
-
Interest on lease obligations (note 15)
(334)
(278)
Foreign exchange loss on financial assets and liabilities denominated in
foreign currency (continuing operations)
(304)
(11)
Total finance costs
13
(289)
Finance income (continuing operations):
Interest received on bank deposits
13
42
Total finance income
13
42
Net finance income/(costs)
26
(247)
39
10. Taxation
The Group’s tax charge comprises:
2024
2023
£000
£000
Current tax:
Current tax on profit for the year
-
-
Adjustments in respect of prior years
6
-
Total current tax
6
-
Deferred tax:
Origination and reversal of temporary differences
-
-
Change in rates
-
-
Adjustments in respect of prior years
-
-
Derecognition of previously recognised deferred tax assets
-
-
Total deferred tax
-
-
Total tax charge
6
-
11. Goodwill
Movements in the Group’s goodwill are shown below:
2024
2023
£000
£000
Cost
At 1 January
-
604
Disposal
-
(604)
At 31 December
-
-
Accumulated impairment charges
At 1 January
-
517
Impairment charge
-
-
Disposal
-
(517)
At 31 December
-
-
Closing net book value
-
-
40
12. Intangible fixed assets
2024
Software
Licences
Total
£000
£000
£000
Cost
At 1 January 2024
4,764
5,696
10,460
Additions – continuing operations
-
-
-
Disposals - continuing operations
-
-
-
At 31 December 2024
4,764
5,696
10,460
Accumulated amortisation
At 1 January 2024
4,351
918
5,269
Charge for year
145
-
145
Disposal
-
-
-
At 31 December 2024
4,496
918
5,414
Exchange differences at 1 January 2024
(244)
1,217
973
Movement in the year
-
121
121
Exchange differences at 31 December 2024
(244)
1,338
1,094
Net book amount at 31 December 2024
24
6,116
6,140
2023
Software
Licences
Total
£000
£000
£000
Cost
At 1 January 2023
4,770
5,696
10,466
Additions – continuing operations
-
-
-
Disposals - continuing operations
(6)
-
(6)
At 31 December 2023
4,764
5,696
10,460
Accumulated amortisation
-
-
-
At 1 January 2023
3,871
918
4,789
Charge for year
95
-
95
41
Disposal
385
-
385
At 31 December 2023
4,351
918
5,269
Exchange differences at 1 January 2023
(247)
1,509
1,262
Movement in the year
3
(292)
(289)
Exchange differences at 31 December 2023
(244)
1,217
973
Net book amount at 31 December 2023
169
5,995
6,164
Intangible fixed assets (Company)
2024
Software
Total
£000
£000
Cost
At 1 January 2024
717
717
Additions
-
-
Disposals
-
-
At 31 December 2024
717
717
Accumulated amortisation
At 1 January 2024
608
608
Charge for year
107
107
Disposal
-
-
At 31 December 2024
715
715
Net book amount at 31 December 2024
2
2
42
2023
Software
Total
£000
£000
Cost
At 1 January 2023
717
717
Additions
-
-
Disposals
-
-
At 31 December 2023
717
717
Accumulated amortisation
At 1 January 2023
528
528
Charge for year
80
80
Disposal
-
-
At 31 December 2023
608
608
Net book amount at 31 December 2023
109
109
13. Property, plant and equipment
2024
Leasehold
improvements
and owned
land and
buildings
Plant and
machinery
£000
Fixtures
and
fittings
Assets in
the course
of
constructio
Total
£000
Cost
At 1 January 2024
8,200
515
3,617
32
12,364
Additions
-
-
132
132
Disposals
-
-
-
-
-
At 31 December 2024
8,200
515
3,749
32
12,496
Accumulated depreciation
-
-
-
-
-
At 1 January 2024
4,812
34
3,586
-
8,432
Charge for year
246
10
167
-
423
Reversal of impairment
-
-
-
-
-
Disposals
2,970
-
-
-
2,970
At 31 December 2024
8,028
44
3,753
-
11,825
Exchange differences at 1 January 2024
315
(470)
360
3
208
Movement in the year
(152)
-
5
-
(147)
Disposals
-
-
-
-
-
Exchange differences at 31 December 2024
163
(470)
365
3
61
43
Net book amount at 31 December 2024
335
1
361
35
732
Depreciation charges and the loss on disposal of PPE have been included in operating costs.
2023
Leasehold
improvements
and owned
land and
buildings
Plant and
machinery
£000
Fixtures
and
fittings
Assets in
the course
of
constructio
Total
£000
Cost
At 1 January 2023
8,200
505
3,333
36
12,074
Additions
-
10
284
(4)
290
Disposals
-
-
-
-
-
At 31 December 2023
8,200
515
3,617
32
12,365
Accumulated depreciation
-
-
-
-
-
At 1 January 2023
4,562
22
3,375
-
7,959
Charge for year
440
12
211
-
663
Reversal of impairment
(190)
-
-
-
(190)
Disposals
-
-
-
-
-
At 31 December 2023
4,812
34
3,586
-
8,432
Exchange differences at 1 January 2023
495
(470)
379
1
405
Movement in the year
(180)
-
(19)
2
(197)
Disposals
-
-
-
-
-
Exchange differences at 31 December 2023
315
(470)
360
3
208
Net book amount at 31 December 2023
3,703
11
391
35
4,140
14. Right-of-use assets
2024
Land and
buildings
£000
Vehicles
£000
Fixtures
and
fittings
Total
£000
Cost
At 1 January 2024
9,648
29
53
9,730
Additions
4,976
-
-
4,976
ROU asset reclassification
(651)
(651)
Disposals
-
-
-
-
At 31 December 2024
13,973
29
53
14,055
Accumulated depreciation
At 1 January 2024
6,103
12
49
6,164
Charge for year
1,266
-
-
1,266
ROU asset reclassification
(651)
(651)
Disposals
-
-
-
-
At 31 December 2024
6,718
12
49
6,779
44
Exchange differences at 1 January 2024
260
2
6
268
Movement in the year
301
1
1
303
Exchange differences at 31 December 2024
561
3
7
571
Net book amount at 31 December 2024
7,816
21
10
7,847
The addition in year relates to the extension of the existing lease of the Sports Haven venue.
Depreciation charges have been included in operating costs.
2023
Land and
buildings
£000
Vehicles
£000
Fixtures
and
fittings
Total
£000
Cost
At 1 January 2023
9,431
29
53
9,513
Additions
217
-
-
217
Disposals
-
-
-
-
At 31 December 2023
9,648
29
53
9,730
Accumulated depreciation
At 1 January 2023
4,897
12
49
4,958
Charge for year
1,206
-
-
1,206
Disposals
-
-
-
-
At 31 December 2023
6,103
12
49
6,164
Exchange differences at 1 January 2023
478
3
6
487
Movement in the year
(218)
(1)
-
(219)
Exchange differences at 31 December 2023
260
2
-
268
Net book amount at 31 December 2023
3,805
19
10
3,834
15. Lease liabilities
2024
2023
Maturity analysis – contractual undiscounted cash flows
£000
£000
Less than one year
1,775
859
Between 2 and 5 years
5,044
2,736
More than 5 years
5,295
3,902
Total
12,114
7,497
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%.
45
Lease liabilities included in the balance sheet
2024
£000
2023
£000
Current
998
2,852
Non-current
8,461
3,193
Total
9,459
6,045
Movement in lease liability during the year
Note
2024
£000
2023
£000
At 1 January
6,045
7,356
New leases entered into
4,976
217
Re-assessment of lease term
(651)
-
Interest charged to the income statement
9
334
278
Lease rentals paid
(1,580) (1,479)
Movement as a result of foreign exchange
335
(327)
At 31 December
9,459
6,045
16. Inventories
2024
£000
2023
£000
Finished goods
121
133
121
133
The cost of inventories (food and beverage inventory) recognised as an expense and included in cost of sales
amounted to £1,054k (2023: £1,100k). Food and beverage inventory is included in finished goods. There was no
provision for obsolescence held against inventories at 31 December 2024 (2023: £nil).
17. Trade and other receivables
Restated
2024
£000
2023
£000
46
Non-current
Other receivables
172
169
Non-current trade and other receivables
172
169
Current
Trade receivables -net
285
483
Other receivables
173
4,048
Accrued income
21
95
Prepayments
53
225
Current trade and other receivables
532
4,851
Total trade and other receivables
704
5,020
The fair value of trade and other receivables is not considered to be different from the carrying value recorded above.
The carrying amounts of trade and other receivables are denominated in the following currencies:
2024
£000
2023
£000
Sterling
12
205
US Dollar
693
4,815
Total
704
5,020
Trade receivables that are not more than three months past due are not considered impaired. As at 31 December 2024,
£98k (2023: nil) of trade receivables were more than three months past due and not impaired. Management considers that
these receivables are recoverable in full.
Trade and other receivables (Company only)
2024
2023
£000
£000
Non-current
Amounts owed by Group companies
17
-
Current
Prepayments
12
203
Current trade and other receivables
29
203
Total
29
203
18. Cash and cash equivalents
Note
2024
£000
2023
£000
Cash and short-term deposits
3,570
3,829
Customer funds
19
353
367
3,923
4,196
47
The fair value of cash and cash equivalents is not considered to be different from the carrying value recorded in the financial
statements.
Cash balances of £353k (2023: £367k) are held on behalf of customers in respect of certain online and telephone betting activities
(amounts deposited by telephone betting customers in Connecticut, USA are held in separate accounts). The corresponding liability
is included within trade and other payables (see note 20).
19. Trade and other payables
Restated
Note
2024
£000
2023
£000
Trade payables
2,694
3,237
Other taxes and social security costs
195
2,727
Accruals
967
2,327
Player liability
18
353
367
4,209
8,658
There is no difference between book values and fair values of trade and other payables. All amounts are due within one year.
Trade and other payables (Company only)
2024
2023
£000
£000
Trade payables
28
144
Amounts owed to Group companies
5,917
1,734
Social security and other taxes
28
9
Accruals
84
822
Total
6,057
2,709
Amounts due to Group companies are repayable on demand and carry interest charges of Bank of England base rate plus 3%
20. Pension schemes
The Group now solely operates a single defined contribution scheme in the UK. Prior to their transfer in February 2023, Lot.to
employees contributed to a separate defined contribution scheme to that of Sportech PLC employees. In previous years, the Group
operated a funded defined benefit scheme and two defined contribution schemes in the US.
Summary of pension contributions paid:
2024
£000
2023
£000
Defined contribution scheme contributions
68
62
Defined contribution schemes
In the UK, employer contributions for Sportech are set at a maximum of 8% of pensionable salaries.
Pension risks
The Group is no longer subject to risks associated with defined benefit pension schemes having transferred the US scheme
with the disposal entities to Betmakers Technology Group Limited.
48
21. Financial instruments (continuing and discontinued operations)
Financial risk management policies and objectives
The key financial risks borne by the Group, and the policy of managing those risks, are outlined below:
Liquidity risk
The Group is exposed to liquidity risk and has to manage its cash requirements. In managing short term divisional liquidity risks,
cash flow forecasting is performed on a weekly basis in the operating entities and is aggregated by Group finance. This weekly
forecasting recognises committed short-term payables of the Group which are monitored and managed through regular
discussions with suppliers. Group Finance monitors rolling forecasts of the Group’s liquidity requirements to ensure each
operating entity has sufficient cash to meet operational needs. Cash surpluses are managed centrally by Group finance and
cash swept up/pushed down as cash surpluses/requirements arise.
Credit risk
The Group’s main exposure to credit risk is in accounts receivable and is influenced mainly by the individual characteristics of
each customer. However, management also considers the factors that may influence the credit risk of its customer base,
including the default risk associated with the industry, country in which customers operate. Credit risk is managed locally by
assessing the creditworthiness of each new customer before agreeing payment and delivery terms.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on
shared credit risk characteristics and the days past due. The expected loss rates are based on annual revenue and the
corresponding historical credit losses experienced over the past five years as annual percentages. On that basis, no loss
allowance as at 31 December 2024 (2023: £nil) was determined other than specific provisions for bad debts in trade receivables.
The Group does not hold significant amounts of deposits with banks and financial institutions and the cash which is deposited is
spread over a few of financial institutions with Moody’s ratings of A or above (defined as upper-medium grade and subject to low
credit risk). Amounts held in cash for the Sportech Venues division are held in highly secure environments.
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily
with respect to the US Dollar. Foreign exchange risk arises from transactions undertaken in foreign currencies, the translation of
foreign currency monetary assets and liabilities and from the translation into Sterling of the results and net assets of overseas
operations.
The Group continually monitors the foreign currency risks and takes steps, where practical, to ensure that the net exposure is
kept to an acceptable level. In doing so, the Group considers whether use of foreign exchange forward contracts would be
appropriate in fixing the economic impact of forecasted profitability. As at 31 December 2024, there were no outstanding
commitments on foreign exchange forward contracts (2023: none). The Group did not enter into any forward contracts during the
year (2023: the Group did not enter into any forward contracts).
The functional currencies of the individual entities in the Group is kept under review.
The average rate for the US Dollar in both the current and previous reporting period are as outlined below.
2024
2023
Average
Closing
Average
Closing
US Dollars
1.28
1.24
1.25
1.26
If the exchange rates in 2024 were comparable to those in 2023, profit after tax would have been £662k and the net assets
would have been £4,662k at 31 December 2024.
If exchange rates had been 1% higher/lower in 2023 than the prevailing rates during the year, profit for the year would have
been £62k higher/lower and net assets as at 31 December 2023 would have been £192k higher/lower.
49
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to
provide returns for shareholders, benefits for other stakeholders and to achieve an efficient capital structure to minimise the
cost of capital.
Financial assets and liabilities
At each reporting date, the Group had the following categories of financial assets and liabilities:
Maturity of financial liabilities
Except for lease obligations (see note 16) all non-derivative financial liabilities are all payable within twelve months.
22. Contingencies and commitments (continuing and discontinued operations)
Capital commitments
The Group had no contracts placed for capital expenditure that were not provided for in the financial statements at the current or
prior year end dates.
Operating lease commitments
The Group includes all leases on balance sheet as Right-of-use assets with a corresponding lease liability, other than leases
which are short leases (terms of 12 months or less) or low value leases, being leases with asset value of less than £4,000
($5,000). Leases that qualify for these exemptions are included within the disclosures below.
The expenditure charged to the income statement was £15k (2023: £27k).
The future aggregate minimum lease payments under non-cancellable leases not accounted for elsewhere under IFRS 16, are
as follows:
2024
£000
2023
£000
No later than one year
-
4
Later than one year and no later than five years
-
-
Total
-
4
Contingent items
Restated
2024
£000
2023
£000
Financial assets measured at amortised cost
4,517
9,216
Financial liabilities measured at amortised cost
13,120
11,621
50
Tax
The Group’s only remaining case was in relation to the treatment of the £4.6m gain included in the 2016 financial statements for
the Spot the Ball VAT refund. The case and all accompanying cash liabilities were settled in full during the year.
Certain contingent items exist at the reporting date with respect to tax liabilities as outlined below.
Other contingent items
M&A activity
The 2021 sales of the Bump 50:50, the Global Tote business and Sportech Lotteries, LLC have customary seller warranties under
the terms of the Sale and Purchase Agreements. Those warranties have been provided in good faith by management in light of
the probability of certain events occurring. The possibility of material claims being made under the seller warranties in either deal
is considered by management to be remote.
Legal
The Group is engaged in certain disputes in the ordinary course of business which could potentially lead to outflows greater than
those provided for on the balance sheet. The maximum possible exposure considered to exist, in view of advice received from the
Group’s professional advisors, is up to £0.1m (2023: £0.1m). Management is of the view that the risk of those outflows arising is
not probable and accordingly they are considered contingent items.
23. Ordinary shares
Authorised, issued and fully paid ordinary shares of 1p
2024
2023
‘000
£000
‘000
£000
At 1 January
97,100
971
100,000
1,000
Buy-back and cancellation
-
-
(2,900)
(29)
At 31 December
97,100
971
97,100
971
24. Related party transactions
The extent of transactions with related parties of Sportech PLC and the nature of the relationships with them are
summarised below:
a. Directors compensation is disclosed in note 8.
b. No cash was invested in and there were no trading transactions between the Group and any of its joint ventures
during the year or prior year, and no amounts outstanding at the reporting date (2023: £nil)
c. During the period, Grey Wolf Investments Limited, a company controlled by the executive chairman of Sportech Ltd, provided
services to the Sportech group in connection with the completion of the sale and leaseback of the Windsor Locks property. This
transaction is disclosed elsewhere in the financial statements, a fee of £110.5k was charged for these services to the group upon
the successful sale of the property.
.
51
25. Related undertakings
Subsidiaries, excluding
dormant companies
Country of incorporation
Registered address
Class of shares held
Shareholding
Sportech Group
Holdings Limited
England & Wales
6th Floor 60
Gracechurch Street,
London, United
Kingdom, EC3V 0HR
Ordinary
85%
Lot.to Systems Limited England & Wales
6th Floor 60
Gracechurch Street,
London, United
Kingdom, EC3V 0HR
Ordinary
100%
Sportech Holdco 2
Limited
England & Wales
6th Floor 60
Gracechurch Street,
London, United
Kingdom, EC3V 0HR
Ordinary
100%
Sportech, Inc.
United States
600 Long Wharf Drive,
New Haven, CT 06511
Ordinary
100%
Sportech Venues, Inc.
United States
600 Long Wharf Drive,
New Haven, CT 06511
Ordinary
100%
Sportech Retail, Inc.
United States
601 Long Wharf Drive,
New Haven, CT 06511
Ordinary
100%
Joint ventures and
associates
Country of incorporation
Registered address
Class of shares held
Shareholding
Sportshub Private
Limited
India
Arias, Fabrega &
Fabrega, Plaza 2000
Building, 50th Street,
Panama
Ordinary
50%
DraftDay Gaming
Group, Inc
United States
Trident Chambers,
POB 146, Road Town,
Tortola, British Virgin
Islands
Ordinary
30%
Dormant companies
Country of incorporation
Registered address
Class of shares held
Shareholding
Sportech Gaming
Limited
England & Wales
6th Floor 60
Gracechurch Street,
London, United
Kingdom, EC3V 0HR
Ordinary
100%
Sportech Pools Limited England & Wales
6th Floor 60
Gracechurch Street,
London, United
Kingdom, EC3V 0HR
Ordinary
100%
Sportech Pools
Competitions Company
Limited
England & Wales
6th Floor 60
Gracechurch Street,
London, United
Kingdom, EC3V 0HR
Ordinary
100%
52
Pools Promotions
Limited
England & Wales
6th Floor 60
Gracechurch Street,
London, United
Kingdom, EC3V 0HR
Ordinary
100%
Sportech Mauritius
Limited
Mauritius
Intercontinental Trust
Limited, Level 3,
Alexander House, 35
Cybercity, Ebene,
Mauritius
Ordinary
100%
Sportech Pools Games
Limited
England & Wales
6th Floor 60
Gracechurch Street,
London, United
Kingdom, EC3V 0HR
Ordinary
100%
Bet 247 Limited
England & Wales
6th Floor 60
Gracechurch Street,
London, United
Kingdom, EC3V 0HR
Ordinary
100%
Sportech Racing
Limited
British Virgin Islands
CSC North America
Inc., 45 O’Connor
Street, Suite 1600,
Ottawa, Ontario K1P
1A4
Ordinary
100%
Sportech Games
Holdco, LLC
United States
600 Long Wharf Drive,
New Haven, CT 06511
Ordinary
100%
26. Investments in subsidiaries (Company)
A full list of the Company’s subsidiaries and other related undertakings is included in note 25 of the Group Consolidated Financial
Statements.
At 31 December 2024 the Company held direct investments in the following entities:
Company
Nature of business
Sportech Group Holdings Limited (“SGHL”)
Holds investments in Group companies
Lot.to Systems Limited
Lottery software supplier
Movement in the book value of the Company's investments is shown below:
2024
£000
2023
£000
At 1 January
15,860
17,999
Impairment
(4,765)
(2,139)
At 31 December
11,095
15,860
53
The Directors considered the carrying value of the investments for impairment during the year. It was concluded that as at 31
December 2024 the enterprise value of the subsidiaries of SGHL amounted to £11,051k and the enterprise value of the Company’s
Lot.to Systems Limited subsidiary was £54k. As a result, an impairment of £4,765k was charged to operating costs in the income
statement. Following the impairment, the Directors consider the carrying value of £11,095k to be supported by the underlying net
assets and cashflows of the Group including those forecasts outlined in note 13 of the consolidated financial statements. Significant
judgement is involved in forecasting the cashflows of the Group and if these forecasts are not achieved impairment to the investment
in SGHL would result. Principal risks of the Group are identified in the Risk Management section of the Consolidated Financial
Statements.
27. Other income
On 17 October 2024 the Group completed the disposal of its freehold property in Bradley, Connecticut, known as
“Windsor Locks” for gross consideration of £3,867k ($5,139k). Costs related to the disposal amounted to £301k. The
property is to be leased back for 10 years to 30 November 2034 at a rental of c£29k per month ($35k)
2024
£000
Cash consideration received
3,867
Net book value disposed of
(2,970)
Costs of disposal
(301)
Profit after tax on disposal net of costs
596
28. Reconciliation of EBITDA
The Board of Directors assesses the performance of the business 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. This
measure provides the most reliable indicator of underlying performance of the business 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:
Note
2024
£000
2023
£000
Operating costs per income statement
(12,943)
(14,344)
Add back:
Depreciation
13,14
1,726
1,868
Amortisation, excluding acquired intangible assets
12
107
95
Amortisation of acquired intangible assets
12
-
-
Impairment of goodwill
11
-
88
(Profit)/Loss on sale of intangible assets
12
-
(109)
(Profit)/Loss on sale of property, plant and equipment
13
596
-
Reversal of impairment of property, plant and equipment
13
-
(190)
Separately disclosed items (net)
5
(398)
364
Adjusted operating costs
(10,912)
(12,228)
54
Adjusted EBITDA is calculated as below:
Continuing and discontinued operations
2024
£000
2023
£000
Revenue
23,053
26,505
Cost of sales
(10,363)
(12,398)
Gross profit
12,690
14,107
Marketing and distribution costs
(253)
(328)
Contribution
12,437
13,779
Adjusted operating income and costs
(10,912)
(12,228)
Adjusted EBITDA
1,525
1,551
29. Prior year adjustments
Background and Reassessment
In the financial statements for the year ended 31 December 2023, certain major operating assets of the Group were classified
as held for sale and presented as discontinued operations, in accordance with IFRS 5. This classification was based on an
advanced-stage process following an approach by an independent third party who expressed interest in acquiring these assets.
The 2023 financial statements reflected the assumption that a binding offer, likely comprising a combination of cash and
deferred, non-contingent cash consideration, might be presented.
However, subsequent to 31 December 2023, no binding offer was received, and the proposed acquisition did not proceed. As
a result, management has reassessed the classification of these assets and determined that they no longer meet the criteria for
classification as held for sale under IFRS 5, paragraph 7 (e.g., due to the absence of a committed plan to sell and an active
market).
Restatement of Comparatives
In accordance with IFRS 5, paragraph 38, the comparative financial information for the year ended 31 December 2023 has
been restated to reflect the reclassification of these assets from held for sale to their original categories (e.g., property, plant,
and equipment or other non-current assets, as applicable). The restatement removes the assets from the “Assets Held for Sale”
line item and adjusts the presentation of discontinued operations in the Consolidated Income Statement and Consolidated
Balance Sheet. Additionally, the remeasurement of these assets, which were previously measured at the lower of carrying
amount and fair value less costs to sell, has been reversed. The assets have been reinstated at their carrying amounts as of 31
December 2023, with depreciation and other relevant expenses reinstated for the period they were classified as held for sale
Impact of Restatement
The restatement affects the following line items in the Consolidated Financial Statements for the year ended 31 December
2023:
55
Original
Adjustment
Restated
2023
2023
2023
Note
£000
£000
£000
Consolidated Income Statement
Revenue
4
51
26,454
26,505
Cost of sales
5
(116)
(12,283)
(12,398)
Gross profit
(65)
14,171
14,107
Marketing and distribution costs
5
-
(328)
(328)
Contribution
(65)
13,843
13,779
Operating costs
5
(2,446)
(11,897)
(14,344)
Operating loss
(2,511)
1,946
(565)
Finance costs
10
(11)
(278)
(289)
Loss before tax from continuing operations
(2,480)
1,668
(812)
Loss for the year – continuing operations
(2,480)
1,668
(812)
Profit after taxation from discontinued operations
1,668
(1,668)
-
56
Original
Adjustment
Restated
2023
2023
2023
Note
£000
£000
£000
Consolidated Balance Sheet
Intangible fixed assets
13
113
6,051
6,164
Property, plant and equipment
14
-
4,142
4,142
Right-of-use assets
15
-
3,834
3,834
Trade and other receivables
18
-
169
169
Trade and other receivables
18
206
4,645
4,851
Inventories
17
-
133
133
Current tax receivable
-
111
111
Cash and cash equivalents
19
1,527
2,669
4,196
Assets classified as held for sale
21,754
(21,754)
-
Trade and other payables
20
1,360
7,298
8,658
Lease liabilities
16
0
2,852
2,852
Current tax liabilities
15
(8)
6
Liabilities directly associated with assets classified as held for sale
13,343
(13,343)
-
Lease liabilities
15
0
3,193
3,193
Other reserves
4,165
0
4,165
Retained earnings
3,761
(1)
3,760