Today’s bullish trading update from Sportech PLC (AIM:SPO) was not enough to dissuade the sports betting and hospitality hybrid from ploughing ahead with its plan to delist from London’s junior AIM market.
Sportech, which operates nine licensed gaming entertainment venues in the US and pool betting site 123Bet, tripled its underlying profit from £300,000 to £900,000 year on year, while reducing losses before tax from operations from -£800,000 to -$300,000.
The group’s contribution margin improved from 50.8% in the first half of 2022 to 53.4% this year, while cash at the end of the period was a healthy £7.8 million (subsequently reduced to £3.5 million post-period via a share buyback programme).
But following a review of the benefits and drawbacks of its AIM listing, executive chairman Richard McGuire made the following announcement: "Despite delivering improving operational results announced today, the substantial financial cost associated with maintaining a public listing, given our current scale, and the increasing volatility in the market valuation is adversely impacting net returns and future prospects.
“Regrettably, in light of these circumstances, we find it necessary to take the difficult but pragmatic step of proposing delisting from the AIM market today."
Pending shareholder approval, Sportech will reregister as a private limited company following the proposed delisting.
Sportech thus follows in the footsteps of many small caps in 2023 in exiting the London capital markets, unfortunately, a running theme in 2023.
Following the delisting announcement, Sportech shares fell 34% to 63.9p.