Last year saw a slowdown in revenue at Betway and Spinparent companies Super Group. The firm is working to consolidate its position in North America.
The NYSE international betting group provided an update to investors, detailing preliminary full year and Q4 2022 trading result. It reported that revenue for all twelve months was $1.38bn. This is a slight decline of 3% from the 2021 figures ($1.41bn).
EBITDA also saw a slight decline, dropping 5% to $319.7m (337.2m). However, operational EBITDA suffered a 31% drop to $223.5m (324.6m). Super Group said that this was within 2022 guidance.
The group is still optimistic about its 2023 outlook despite this. It closed 2022 with more monthly average customers than 2021. This figure increased 10% from 2.6million in 2021 to 2.92 million last year.
Super Group’s preliminary results for 2022 show a profit before tax of $250.5m. This is an increase of 3% over $242.1m in the previous year.
Neal Menashe is the CEO of Super Group. He stated: “Super Group, a global leader in pure-play betting and online casinos, seeks to continuously optimize and grow its global footprint, even in the US.
“We continue to invest efficiently in our brand, improve our technology platform, and benefit from our constant cash generation. We believe we are well placed to apply our tried strategies to the US markets, and to capitalize on what we consider a multi-year investment opportunity.
The slowdown in revenue growth continued into fourth quarter. Income fell 3% to $352.7m from $365.5m and profit before taxes declined 39% to $41.1m from $67.1m.
EBITDA declined 32.5% to $60.1m from $89.2m, as did operational EBITDA. Profit also fell 39% to $45.3m from $74.6m. However, customer numbers were a saving grace, increasing 15% from 2.9 to 3.4 millions.
This was due to operating costs increasing slightly to $1.15bn in FY2021 (FY1.09bn). We registered ‘direct expenses’ of $506.9m, and GA expenses of $289.4m. Marketing expenditure however dropped to $368.7m in FY2022 (FY2022: 3776.2m).
It was also pointed out that Super Group’s slow revenue growth was due to the extensive M&A strategy it pursued in recent decades, as part of a larger restructuring to include a variety of independent companies within the group.
In 2022, Smart Business Solutions S.A., Haber Investments and Red Interactive were notable transactions. However, the most significant development was the merger of Sports Entertainment Acquisition Corp. (SEAC), following Super Group’s NYSE listing.
Super Group is confident that it can continue its growth trajectory despite the fact that its preliminary results indicate some volatility in trading in 2022. This is especially after its post-closed acquisition Digital Gaming Corporation (DGC).
DGC, the operating partner of Betway in the US and Spin in America, is an online gaming and betting company with market access in 13 US states. Super Group hopes to capitalize on this position to strengthen its stateside brands.
To further complement US growth, the board of the company has authorized the repurchase up to $25m in Super Group ordinary shares until 31 December 2023.
Alinda Van Wyk, Super Group’s CFO, stated: “Super Group is still financially strong. We continue to manage our business profitably, while investing in marketing and technology to support future growth.
“We will continue to operate more efficiently in 2023, in order for us to increase scale and improve our operating margins moving forward.”
The firm has made predictions for 2023. It expects a continuation of its group-wide recovery. EBITDA guidance is $235.8m (+16% margin) and a 5% increase in revenue to $1.44bn. Operating expenses are expected to drop by $8.6m.
