Scout Gaming Group managed to decrease its net loss in what Niklas Jonsson, acting chief executive, described as “the most eventful year” in the provider’s history.
The 2022 financial year saw major changes at the fantasy sports provider. This culminated in a restructuring of its B2B section. This resulted in 11 partnerships being closed and a decrease in cooperations to 13.
Jonsson announced the plans at Q3 and stated that the restructuring program would help to ensure profitability in all its partnerships as well as decrease expenses.
After Scout also raised SEK101m through a share issue process in order to save the company, the restructure was made after a SEK17m commitment was discovered in the accounts of the supplier. This was something the supplier claimed it had not known about.
Scout also initiated a major restructuring in personnel – which saw the laying off of 68 of the 131 full-time workers, in addition to in the Lviv office in Ukraine. This left only 63 employees.
Jonsson expressed satisfaction with the group’s financial year and these changes.
Jonsson stated that the “most eventful year in our group’s history” has ended. “We completed a year-long restructuring of our organisation, which included significant reductions in personnel and partner agreements. We also successfully raised rights.
The group must have a restructuring program and a continuous cost control in order to be profitable.
“To continue the transformation to become a profitable business and to create shareholder value, there is still a lot to do. Sharp focus and engagement by all members of the organisation are required.”
Fourth quarter
Looking at Scout’s financial performance and focusing first on the fourth quarter, during which much of the restructuring took place, revenue was 20.8% lower year-on-year at SEK8.0m (PS638,176/EUR725,176/$768,240).
B2B revenue increased by 70% to SEK5.1m because of the increased focus on this vertical. However, B2C revenue fell 45.3% to SEK2.9m mainly due to previous, non-profitable advertising campaigns.
Scout saw a reduction in operating costs of 61.2%, to SEK18.8m. A positive impact of SEK10.8m on financial items allowed Scout to post a small profit of SEK1,000 before taxes, as compared to a SEK39.1m loss the previous year.
Scout didn’t pay any taxes, so it ended the quarter with SEK1,000 net profit, compared to a SEK39.1m loss for 2021. EBITDA also improved from a negative SEK37.9m loss to a loss SEK10.7m.
Full year
Looking at the entire year, group revenue fell 28.1% from SEK35.6m 2021 to SEK25.6m in 2021.
These included SEK14.0m B2B revenue, an increase in 45.8%, as well SEK11.7m from Scout’s B2C operations. This is a drop of 47.3% compared to SEK22.2m the previous year.
Operating expenses fell by 23.6%, to SEK93.8m. After accounting for SEK8.0m of positive financial items, there was a pretax loss in SEK60.1m. This is an improvement over the SEK82.7m loss in 2021.
Scout didn’t pay income tax so the net loss for the year was SEK60.1m. This is a significant improvement on the SEK82.6m loss the previous year. EBITDA lost was SEK67.9m. This is lower than the SEK84.3m loss for 2021.
“A profitable cash-generative company is possible and a target if we execute our plans,” Jonsson said. Jonsson stated that he is determined to fight on.
