It has been a tough 18 months for UK-traded racing software company Sportech PLC, culminating with the announcement on Tuesday that its CEO, Andrew Gaughan, would be resigning his post after only 18 months on the job.
According to the press release, Gaughan is leaving to pursue other opportunities, but one can only wonder what has happened in the company since he took the helm in March of this year.
A year to forget
2018 has been a pretty bad year for the publicly-traded Sportech. First, the company announced that is was making itself available for sale, and while there were a couple of suitors, in the end, the company decided not to sell and in turn decided to make some changes in upper management.
CEO Ian Penrose was removed and replaced with Gaughan, and the announcement came with a major tumble in the share price. Now, this wasn’t on Gaughan’s shoulders, but clearly, he was being tasked with repairing the company’s brand (and market cap) in short order.
Recently, Penrose himself has popped back up into the gaming world, being appointed the Non-Executive Chairman of Playtech, with a focus on taking the brand into the newly-regulated sports betting market in the United States.
Profit Warnings Are never a good sign
In early November, the company announced that it was going to miss some revenue and profit targets as a result of not getting signatures on some “expected sales contracts.” This also sent the share price tumbling to one of its lowest marks in a decade, which of course caused major concern for shareholders. The announcement of Gaughan’s departure has had some negative effect on the share price as well, but at this point, it is hard to say if it could get any worse.
Sports Betting to save the day for Sportech?
Earlier in the year, Gaughan and Sportech announced that they would be in the running and would likely receive a sports betting license for operation in the state of Connecticut, where it currently operates the only licensed horse racing betting facilities.
This operation is the key to the future success of the company, along with taking this sports betting solution to their dozens of clients across the United States. As regulation moves across the U.S., Sportech expects to be a player from a B2B perspective as well, but not being able to launch either in 2018 has left Sportech behind its competitors.
What’s next for Sportech?
In the announcement made on Tuesday, Sportech also announced that Richard McGuire, the Non-Executive Board Chairman, would assume the role of Executive Chairman effective immediately, and will work with Gaughan to make the handover as smooth as possible over the next three months.
Following that, the company plans to conduct a thorough search for its next CEO. With the opportunity sitting in front of Sportech in the United States, this could be a very interesting challenge for whoever fills the role. We can expect an announcement on that front to take place in the new year.