Legal costs hit SIS profits as yearly accounts revealed

Legal costs have led to a fall in profits at SIS according to the betting industry content and data provider's accounts for the year to the end of March.

The company was last year involved in litigation with rival service The Racing Partnership, in which a high court judge found that SIS had unlawfully breached confidentiality in raceday data. Both sides have been given leave to appeal aspects of the judgement.

The accounts stated that operating profit before "individually significant items" had fallen to £7.4 million from £8.4m. However, after those items were taken into account, operating profit decreased to £2.2m from £6.6m the previous year.

"The reduction is largely due to increased litigation fees incurred in the year," the accounts said. Those litigation fees amounted to £5,147,000.

The accounts' strategic report said the retail betting market had contracted during the last four years, culminating in the government's decision to cap FOBT stakes at £2.

"Although the group has several contracts in place now that enable SIS to share the risk of LBO closures there remains exposure to a decline in LBOs [licensed betting offices]," SIS said.

"In anticipation of the decline in LBO numbers the group has made a significant investment in its capabilities to deliver bespoke services to both retail and online bookmakers in the UK and globally."

The period covered by the results included the first full year of SIS's betting shop deal with Racecourse Media Group and also ended just before the new £2 maximum stake on FOBTs was implemented.

Analysts at Regulus Partners said the figures therefore represented a "watershed" for SIS.

They added: "It is unsurprising that SIS’s strategic priorities are to reduce dependence on traditional content (horses and dogs) into UK and Irish retail betting markets.

"Given that sales to UK and Ireland represent 95.4 per cent of total revenue...it can be seen that this is something of a mountain to climb."

SIS is currently without a chairman, with Barry Gibson having stepped down in December. Gibson will take over as chairman of GVC Holdings in February.

Industry veteran Trevor Beaumont is understood to be acting as interim chairman while a permanent successor is found.

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