AGTech first-quarter revenue drop ‘in line’ with strategy

Chinese sports lottery software and systems developer AGTech Holdings has reported that a year-on-year fall in revenue during the first quarter of 2014 was “expected” and is “in line” with an ongoing transitional strategy.

The company posted revenue of HK$25.7 million (€2.4 million/$3.3 million) in the period, which is down on the corresponding quarter last year.

AGTech reported that gross profit also fell to HK$12.3 million during the first quarter of this year.

The company said the decline in revenue was expected and is in line with its strategy of transitioning its core business from the “legacy, lower-growth lottery management business to fully integrated service involving its advanced, high-growth gaming technologies business”.

AGTech said that as certain contracts in its lottery management division expired in April 2013, the negative effect of this was fully expected in the first quarter of 2014.

Elsewhere, the company did report that its gaming technologies division performed in line with expectation and towards the end of the quarter, its virtual sports betting sales experienced “meaningful improvement” after its ‘e-Ball Lottery’ game in the Jiangsu province of China was refined and localised.

John Sun, chairman and chief executive officer of AGTech, said: “We are very satisfied with the progress of our virtual sports division where we expect to launch Lucky Racing in more provinces later this year and e-Ball has launched successfully.

“More broadly, we believe that the Chinese government will start to regulate the development of the online and mobile lottery systems and distribution market.

“AGTech is well positioned to react to any such regulatory progress and we believe that such developments would bring great opportunities for the group to further expand its business into more innovative lottery games and distribution channels in the future.”

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