DUBLIN-BASED financial spread-betting group Worldspreads has sold its sports division to the head of the unit Fergus Rice for a fee that could rise to €1.5 million.

The sale is based on an initial payment of €250,000, with the remainder linked to the sports division’s management team meeting revenue targets of at least €1 million per annum over the next three years.

However, as the potential earn- out is not being realised at the time of the sale, Worldspreads will write down the carrying value of this unit of €1.5 million in its financial statements for the full-year ending March 31st, 2009.

Niall O’Kelly, chief financial officer with Worldspreads, said one of the positives of the deal was the division would not have to shut with the loss of five jobs.

“The sports spread betting business is a niche market business and the group’s emphasis in recent years has been primarily on expanding its rapidly growing financial spread betting business,” Mr O’Kelly said.

Last year, the sports division reported an after-tax profit of €350,000 on revenues of €1.6 million. Mr O’Kelly said 2009 looked like a difficult year for the unit and it would report a trading loss this year.

“As highlighted in the group’s recent market update, the sports business has experienced a very difficult trading period in the year to 31st March, 2009, and will report a trading loss for the period on revenues materially lower than in the prior year.”

The disposal would allow group resources to be concentrated on its financials business, he added.