Super Group

Super Group FY2023 dragged by costly US impairments

Super Group states that it has overcome a challenging 2023, in which its corporate performance was dragged down by US-specific impairments impacting profitability.

This afternoon, the parent company of Betway and Spin brands published its Q4 and full-year 2023 preliminary results, concluding by declaring its “highest ever total revenue for a fourth quarter of €359m,” a 9% increase on 2022 comparatives of €329m.

Period growth was driven by a 38% surge in monthly active customers to 4.7m indexed on Super Group brands, helping the NYSE group generate full-year revenues of €1.4bn, a result exceeding its full-year guidance.

Revenue growth was reflected in Super Group’s Q4 operational EBITDA, which increased by 28% to €54m and to €254m on a full-year basis, exceeding the firm’s expected guidance.

However, Super Group’s Q4 accounts were reduced by the NYSE group booking a €36m impairment charge related to its North American subsidiary of Digital Gaming Corporation Limited (DGC) – a business which Super Group acquired outright in January 2023.

DGC-related impairments saw Super Group declare Q4 corporate losses of €45m and further reduced the firm’s FY2023 profits to €17m as compared to 2022 profits of €216m.

As detailed by the filing: “The profit for 2023 is mainly affected by non-cash charges of €28.6 million relating to an increase in the fair value of a liability for a call option granted to a third party to purchase the B2B division of DGC, which Super Group acquired in January 2023.

“Additionally, included is a non-cash charge of €35.9m relating to the impairment of the DGC cash-generating unit. In 2022, profit included non-cash gains of €246.8m relating to the fair value of warrant and earn-out liabilities and related foreign exchange movements, partially offset by share listing expense of €126.3m, and adjusted RSU expense of €25.4m.”

Including US adjustments, Super Group details that its operating EBITDA is reduced to losses of €17m.On North American proceedings, CFO Alinda van Wyk stated: “For the fourth quarter, we delivered ex-US Revenue of €352m and ex-US operational EBITDA of €54m, which resulted in our December margin hitting 24 per cent, the strongest ever. 

“In the US, the operational EBITDA loss was less than expected for the year and we are actively evaluating all of our options.”

The NYSE group maintains an unrestricted cash reserve of €242m as of 31 December 2023 – down on €254m reported at the end of 2022 – “The decrease in cash is predominantly related to the acquisition of DGC and related technology strategies.”

Concluding the statement, Neal Menashe, CEO of Super Group, commented: “We have made tremendous strides in 2023 and are delighted to have achieved an all-time revenue record of €1.4bn, enabling us to comfortably surpass our guidance for the year.

“Q4 2023 was particularly strong. Despite the challenging start, we set record-breaking totals for revenue, customer numbers, and deposits, cementing our position as a growing, cash-generative, and geographically diverse online sports betting and igaming operator. 

“iGaming continues to be the largest part of our business, allowing us to manage moments of volatility in the sportsbook to deliver record-breaking results. We are confident that we will achieve the double-digit top-line growth that we are projecting for 2024.”

 

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