Northstar Gaming, a sports betting and online gaming operator based in Ontario, reported mixed results for Q2.
Northstar’s revenue, gross margin and handle all grew in the second quarter. The company reversed its takeover by Canadian real estate business Baden Resources.
This was due to an increase in customer numbers and increased wagering. The losses have only increased by a tiny amount from last year, at $4.8m.
Michael Moskowitz, the chairman and chief executive of the company, highlighted that the integrated editorial content in its gaming platforms was a key factor in the growth in revenues.
The content of the Company Insights is “proving to be more popular among customers who are looking to improve their gambling experience”.
As the company grows, revenue is expected to grow faster than expenses.
Moskowitz also highlighted the recent M&A activities that would support future growth of the company.
He added, “We anticipate that the product and marketing initiatives currently underway will continue to fuel growth through the rest of the year and well into 2024.”
The Slapshot acquisition, which we completed during the second quarter of this year, was an important step in our plan to expand the NorthStar Bets Brand outside Ontario in the Fall and leverage our infrastructure and existing content.
Northstar’s Q2 results are impacted by high costs
Northstar reported CA$4.6m for the period of three months ending June 30, compared with the CA$527,000 it had in the prior year. Revenue was generated by a handle of $160.1m.
The business costs are high, and they eat into potential profits.
The company experienced an increase in general and administrative expenses as a result of the decrease in marketing costs.
The CA$3.8m figure is more than twice the CA$1.3m that was reported for the same time period last year.
The overall costs increased by 17%, to CA$6.4m from the CA$5.5m in Q2 2020.
The company lost CA$4.8m, a slight decrease from CA$5.6m the year before.
The trend continues for six months
The business generated CA$8,3m of revenue in the last six months. Northstar costs increased to CA$16.2m due to CA$2.8m in listing costs.
The loss for the period ending June 30 was $13.5m. It paid no tax on a six-month and three-month basis due to its losses.
Northstar Announces CA$10m New Financing
Northstar announced today a new CA$10m financing. The financing, which will close in September, is funded by issuing shares and entering into new debt agreements.
