Sportingbet to Move up from Aim
By Pan Kwan Yuk
Financial Times UK
Sportingbet has confirmed plans to leave Aim for the main London market, in a move that underscores how far the online betting operator has come since a US regulatory clampdown in 2006 nearly wiped out its business.
Shares in the company, which traded at little over 20p less than two years ago, rose 2¼p on Thursday to 76¼p, giving it a market capitalisation of £381m ($590m).
That could be enough to put it into the FTSE 250 and attract index trackers and investors who are not allowed to put money into Aim companies.
Sportingbet said it believed the Official List was "the most appropriate platform for the continued growth of the group".
The company added that the move would increase its profile, help the liquidity of its shares and give it access to a wider range of potential investors, a view echoed by many analysts on Thursday.
"This is a strategically attractive move for Sportingbet as it should bring greater liquidity and a wider potential investment pool to the stock, enhancing its reputation and, ultimately we believe, its stock value," said analysts at Daniel Stewart, the investment bank.
Like its peers, Sportingbet has experienced a phoenix-like rise from the ashes of the US clampdown on online gambling over the past three years.
The company, which had to give up two-thirds of its revenue when legislation forced its exit from the lucrative US market, has spent much of the past couple of years restructuring in the fast-growing sports betting market in Europe.
The strategy appears to have paid off as Sportingbet now receives almost 90 per cent of its bets from Europe. The company restored its dividend payment in October.
For the six months to January 31, it reported a 17 per cent rise in pre-tax profits to £16.3m following a 19 per cent lift in revenue to £101m. It is now hoping that the football World Cup in South Africa in June will help to keep the momentum going.
The company's shares will be admitted to the Official List and simultaneously cancelled on Aim on or around May 14.
