Worldspreads Group 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 based on the sports division management team meeting revenue targets of at least €1 million per annum over the next three years.
However, as none of the potential earn out is being realised at the time of the sale, Worldspreads will writedown the carrying value of this unit of €1.5 million in 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 that the division would not have to shut and the five staff would be retained.
"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 although Mr O'Kelly said 2009 looked like a difficult year and it would report a trading loss in the 12 months to March 31st, 2009.
He said the disposal will allow group resources to be concentrated on its financials business.
“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.”
