28th Oct 2019 13:29
(Alliance News) - Catalyst Media Group PLC said Monday its investee Sports Information Services Holdings Ltd has had to take an additional litigation provision for the year ended March 31.
Catalyst holds a 21% stake in SIS, which supplies content and production services to retail betting markets.
As a result of its ongoing legal battle with The Racing Partnership, SIS now expects its pretax profit for financial 2019 to be GBP2.9 million, lower than previous guidance of between GBP3.5 million to GBP4.5 million.
SIS had a case brought against it earlier in 2019 by the Racing Partnership as well as others, claiming it was in breach of confidence.
In May, Justice Anthony Zacaroli handed down a judgement in the UK High Court which found in favour of the Racing Partnership claim of breach of confidence in relation to certain race day data supplied to SIS by a third party.
Then in July, a judgement by a UK court ruled SIS and The Racing Partnership can appeal parts of the earlier judgement.
Despite this, SIS had successfully defended two other claims made against it. These were with regards to intellectual property infringement and related to conspiracy by unlawful means.
Turning to SIS's current trading, Catalyst said the company has seen an 11% reduction in the number of UK licenced betting offices using its fixed odds betting terminals to 8,250 from 9,250, which is "slightly" below SIS management expectations.
The UK Government reduced the maximum stakes a customer can gamble on fixed odds betting terminals to GBP2 from GBP100 earlier this year.
SIS's overall performance in the six months from April to September is ahead of management expectations, however.
"Six months on from the FOBT change, SIS's performance is ahead of SIS management's expectations and the investment and progress in Digital and International markets has continued, with recent announcements by SIS including the launch of a World Greyhound Tote product launched in the US market, expansion into South America both for retail and online customers, and a number of new retail and online customers in Europe for its Watch and Bet 24/7 channels," Catalyst said.
The company added: "Whilst the core UK and Irish Retail market declines at predicted rates, the business sees its long-term future aligned with the international and multichannel operations of major betting companies. The focus on both International and Online and the move to a new target operating model is also securing significant cost savings across SIS."
Catalyst also noted SIS has declared a GBP5.0 million, which will see Catalyst receive GBP1.0 million. The company intends to distribute this to shareholders, equating to a 5.0 pence per share dividend.
Shares in Catalyst Media were 9.5% higher in London on Monday at 75.00 pence each.
By Paul McGowan; [email protected]
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