London-listed gambling company Sportech is inviting offers for the company after it reported a jump in revenue.
Revenue in the year to date has reached £54.7m, marking an increase of 5.8 per cent. For the third quarter the increase was six per cent.
The group's activities are split into two areas: racing and digital, and venues. In racing and digital, a sports raffle product called Bump 50:50 increased revenue by 41.5 per cent in the third quarter compared to last year.
Meanwhile revenue from the group's venues operations doubled to £1.2m in the third quarter.
Why it's interesting
Following approaches from unnamed potential buyers, Sportech has instigated a strategic review and is now going into the due diligence process with the interested parties. The company also invited any other parties interested in acquiring it to contact its adviser.
The potential sale is unlikely to surprise investors in a gambling industry which is in the process of consolidating. Major player GVC last week sold its Turkish business, leaving the way clear to acquire a rival.
Ian Penrose, Sportech's chief executive, and its CFO, Mickey Kalifa, are both leaving the business in December, it added, with no replacements planned.
Much of Sportech's revenue growth came from the fast-growing Bump 50:50 product. The raffle app is used by several major sporting events in the US including the NFL and NBA. Half the takings are shared among punters and half goes to charities.
The group said it was focusing on expanding the range of its partnerships for Bump 50:50 across Canada and the US.
But Sportech also noted its racing and digital business had felt the impact of hurricane season, which affected some clients' operations in Puerto Rico.
Meanwhile, the group's venues business, which operates betting boutiques as well as sports bars with gambling facilities, was bolstered by the opening of a new sports bar in Stamford, Connecticut in June.
What Sportech said
"The group has continued to trade well in the first few weeks of the current quarter and the outcome for the full year remains in line with board expectations," said Richard McGuire, non-executive Chairman of Sportech.
"During the coming weeks, we expect to provide a further update on the proposed distribution to shareholders and, at the appropriate time, provide further comments relating to the ongoing formal sale process. Our financial position remains robust, and will benefit further from annualised cost savings of at least £2m."