
Sportech PLC
05 January 2006
Sportech's Interactive Gaming Contract with ITV is terminated
Sportech PLC ('Sportech' or 'the Company'), announces today that by mutual
consent, its interactive gaming contract with ITV has been terminated with
immediate effect.
The contract with ITV was signed in March 2002 by Sportech to capitalise on the
projected growth market of interactive TV betting. Sportech, through Littlewoods
Gaming, agreed to supply interactive betting and gaming services linked to ITV
programming. The contract has been loss making for Sportech since inception,
including an expected operating loss of £4m in 2005 due to low revenues.
The termination will result in Sportech eliminating the operating loss in 2006
and avoiding additional potential payments of £22.2m (with pro rata reduction of
up to £8.4m as long as the service is not launched on cable) over the remaining
three years of the contract. Sportech and ITV will have no further engagement.
As a consequence of the termination, the 2005 results are expected to be
impacted by an additional exceptional charge of approximately £14m reflecting
the write off of payments already made to ITV, related assets and redundancies.
The direct cash cost of the termination is expected to be less than £1m. The
2005 results, excluding exceptional charges, are expected to be in line with
market expectations.
Sportech will focus on profitable business and remains committed to interactive
gaming. The Company will update the market about new product launches in early
2006.
Ian Penrose, Chief Executive, Sportech, commented;
'Following a thorough review of the business, it has been established that our
contract with ITV is commercially unviable. After negotiations with ITV we have
ascertained that this position will not change and have agreed to terminate the
contract by mutual consent. Given the huge contractual payments due under the
contract from February 2006 onwards, we are not prepared to expose the Company
to this ongoing liability.
'Sportech will continue to participate in the interactive betting market and we
look forward to updating the market about new launches we have in the pipeline
early in 2006.'
- ENDS -
Enquiries
Sportech plc
Ian Penrose, Chief Executive Officer 0151 288 3561
Gary Speakman, Finance Director 0151 288 3244
Bell Pottinger Corporate & Financial
David Rydell / Zoe Sanders 020 7861 3232
This information is provided by RNS
The company news service from the London Stock Exchange
|