SBC News Super Group confident in US strategy despite Q2 hurdles

Super Group confident in US strategy despite Q2 hurdles

Super Group, the parent company of the Betway and Spin brands, has said it remains focused on ‘future growth opportunities’ to strengthen its commercial profile across multiple jurisdictions in its newly posted financial results for Q2 2023.

The NYSE-listed online gambling group revealed a rise of 19% in corporate revenues to €380.8m (Q2 2022: €308.6m), citing accelerated growth across Africa, Europe and the Middle East. 

Specifically, Africa and Middle Eastern revenue increased by 42% in Q2 2023, rising from  €63.5m in Q2 2022 to €110.3m. European income, meanwhile, jumped by 47% to €57.1m, up from €30.5m in the corresponding period last year. 

This growth was partially offset by declines from North America and Asia-Pacific markets. In the former, revenue fell by 4% from €142.1m to €137m, attributed largely to Canada due to recent Ontario regulatory changes. Additionally, Latin American revenue also dropped marginally by 1% from €700,216 to €700,116.

The North American business did contribute to profit, however, as a non-cash charge of €6.1m related to the sale of Digital Gaming Corporation Limited’s (DGC) B2B division was included in the €380.8m figure. DGC was itself acquired by Super Group at the start of this year, and forms a core part of its US operation.

Despite these North American challenges, group profit for the second quarter 2023 was €27.6m. Super Group’s operational EBITDA, meanwhile, stood at €70m compared to €53.6m in 2022, an increase of 23.4%. 

CEO Neal Menashe stated: “Super Group has delivered financial results that reflect our ongoing focus on both an optimised global footprint and investment in long-term growth. 

“This quarter’s strong revenue performance has delivered enhanced economies of scale in multiple markets, resulting in significant year-over-year growth in operational EBITDA, ex-US.”

Menashe also expressed confidence in the company’s business model as he explained how the team will focus on its search for future growth opportunities in the global online casino and sports betting industry.

From a product perspective, Betway revenue rose 17% to €228.9m (€189.7m) and Spin revenue 6% to €151.9m (€142.1m). Total group-wide betting revenue stood at €143m, up 22% on €110.7m, and online casino at €223.7m, up 9% €204.3m.

Meanwhile, looking into the company’s active customers per month, this figure increased by 40% to 3.7 million during Q2 2023 – this stood at 2.7 million in Q2 of last year.

“Our second quarter results, ex-US included record revenue and solid Operational EBITDA of €82.6m,” added CFO Alinda van Wyk. “Our monthly active customer numbers continue to show momentum reaching 3.7 million which we believe is a key driver for future growth.”

However, its cash and cash equivalents came in €228.7m at 30 June 2023, which is down from €254.8m at 31 December 2022. 

Super Group put this net reduction down to inflows from operating activities amounting to €53.2m and inflows from investing activities of €54.1m. 

It also detailed that the outflows from financing activities of €125.2m were ‘primarily due to DGC settling its bank lending facility of €139.5m’, offset by proceeds from interest-bearing borrowings of €18.5m.

Whereas, its loss of €8.1m was reportedly a result of foreign currency fluctuations on foreign cash balances held over the period.

van Wyk continued: “Achieving scale in each of our markets, combined with driving cost efficiencies throughout the business, remain our focus for long-term growth and bringing us back to consistent ex-US EBITDA margin from operations of greater than 20%. 

“With regards to the US, the business is tracking in-line with expectations and we are confident in our strategy.”

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