SIS warns of profits below expectations due to ongoing litigation with TRP

SIS has warned that profits for its last financial year will be lower than expected, with the betting industry content and data provider having to make extra provisions for ongoing litigation with rival The Racing Partnership (TRP).

Catalyst Media Group (CMG), which holds a 20.54 per cent stake in SIS, revealed the news in a statement to the stock market on Monday.

CMG said it had been advised that SIS's profits before tax for the year to March 31 would be £2.9 million, having said in March it would be "towards the upper end" of previous guidance of £3.5m to £4.5m.

SIS has had to make additional provisions due to continued litigation with TRP after a trial earlier this year in which a high court judge found that SIS had unlawfully breached confidentiality in raceday data belonging to Arena Racing Company, the driving force behind TRP. SIS successfully defended two other claims made against it.

It is believed costs for each side amounted to around £3 million each and both sides were subsequently granted leave to appeal.

CMG said SIS's cash balance was not affected by the provision and stood at approximately £70m at the end of March.

As one of the two main betting shop picture providers, SIS was one of the companies exposed to closures caused by the government's decision to limit the stakes on FOBTs to £2.

However, CMG's statement said the reduction in shop numbers since the new regime came into force on April 1 was "slightly lower than SIS's management expected" and that the company's performance was "ahead of SIS management's expectations".

CMG 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."

It was also revealed SIS had declared a dividend of £5m.

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