The provider of fantasy sports and sports betting, Scout Gaming, said that a slower third quarter in sports was largely responsible for the 18.7% decline year-over-year.
Revenue for the three months to 30 September reached SEK12.2m (PS1.0m/EUR1.2m/$1.3m), down from SEK15.0m in the corresponding period last year.
Scout explained that this was due to fewer sporting events than the same period in 2017. Sports leagues were postponed and other events cancelled in the third quarter of 2020 due to the pandemic of novel coronaviruses (Covid-19).
Scout has been able to carry on with its plans for expansion in the third quarter, making its US debut in conjunction with the Masters Cup Series Pool Tournament. Other deals were signed with Skylands Events, University Sports, for the Baseball Frontier League and Backal Hospitality Group, who will use it as a platform to play sports in bars.
Scout launched new products for top clients including Norsk Tipping, a Norwegian company that rolled out Scout’s fantasy sports real money solution.
Andreas Ternstrom, Scout’s chief executive officer said: “We worked hard to launch our Tier-one customers.” These […] customers will drive growth in 2022, as well as beyond. Launching tier-one clients is the cornerstone of Scout’s strategy.
Total operating costs for the third-quarter were SEK21,4m. This is down by 25.4% compared to SEK28,3m in last year’s quarter. Personnel expenses increased by 42.7% to SEK11.7m. Depreciation and amortisation charges for property, equipment and plant grew 70.6%, to SEK2.9m. Other external costs decreased 63.0%, to SEK6.8m.
After accounting for SEK2.7m of finance costs, the pre-tax loss was SEK12.0m, compared to SEK13.4m in Q3 2019. Pre-tax losses were SEK12.0m after accounting for SEK2.7m of finance costs. This compares to SEK13.4m last year. Net loss after paying SEK20,000 tax was SEK11.9m, compared with SEK13.m4 in the previous year.
The loss before tax, depreciation, and amortization (EBITDA), which was SEK11.6m the year prior, has now been reduced to SEK6.3m.
Scout’s first-nine months performance in 2021 saw revenue increase by 31.7% to SEK39.5m. Operating costs also increased 20.6%, reaching SEK81.9m.
The SEK4.2m gain from financial items was subtracted, resulting in a SEK38.2m pre-tax profit, compared to the SEK40.7m last year.
In 2020, the net loss of the business was SEK40.7m.
Billy Degerfeldt will also leave his position as Chief Financial Officer after the end of this quarter. Degerfeldt is taking on the same role with another company, but will first have to serve a three-month notice period.
Ternstrom stated: “We have made several organisational and business changes, both during the third quarter, as well as afterward, to further strengthen our focus on tier one clients, who are primarily located in Europe.”
We see tremendous opportunities to grow in the future with the help of tier one clients, the launch and support we receive from them and their interest in our product.
