Super Group ‘well positioned’ for US growth in face of 2022 revenue slump

Revenue at Betway and Spin parent company Super Group slowed last year, as the firm continues to work towards a more consolidated position in North America.

In an update to its investors detailing preliminary full-year and Q4 2022 trading results, the NYSE international betting group reported revenue across all 12 months at $1.38bn, a small decline of 3% on 2021 figures ($1.41bn).

A marginal decline was also experienced regarding EBITDA, which dipped 5% to $319.7m ($337.2m), but a sharper fall was seen for operational EBITDA at a decline of 31% to $223.5m ($324.6m), although Super Group stated this was ‘within 2022 guidance’.

Despite this, the group remains confident in its 2023 outlook, having closed 2022 with more average monthly customers across the full year than in 2021, with the figure increasing 10% from 2.6 million in 2021 to 2.9 million last year.

In the face of declining revenues and increasing costs due as a result of its NYSE listing and expanded US ambitions, Super Group’s preliminary results suggest profit before tax for 2022 of  $250.5m, up 3% on $242.1m the year prior.

Neal Menashe, Super Group CEO, said: “Super Group is a leading global pure-play sports betting and online casino company seeking to continually optimize and grow our global footprint, including in the US.

“We continue to efficiently invest in our brand, enhance our technology platform and benefit from our consistent cash generation. We feel we are well positioned to apply our well-tested strategies to the US markets and capitalize on what we see as a multi-year investment opportunity.”

The slowdown in revenue growth continued into the fourth quarter of the year, which – similar to full-year revenue – saw income fall 3% to $352.7m (from $365.5m) and profit before tax declining 39% to $41.1m (from $67.1m).

EBITDA also declined by 32.5% to $60.1m (from $89.2m), as did operational EBITDA, which like profit slumped 39% to $45.3m (from $74.6m) – however, customer numbers were again a saving grace for the firm, rising 15% from 2.9 million to 3.4 million.

Much of this was a result of operating costs rising slightly to $1.15bn (FY2021:$1.09bn), registering  ‘direct expenses’ of $506.9m and GA expenses of $289.4m – although marketing expenditure notably dropped to $368.7m (FY2022: $376.2m).

The firm also noted that much of the barriers to Super Group’s revenue growth were due to its extensive M&A strategy pursued in recent years, part of a wider restructuring to incorporate a number of standalone companies into the group. 

Notable transactions conducted in 2022 were Smart Business Solutions S.A., Haber Investments, and Red Interactive, although the most prominent development was the merger with Sports Entertainment Acquisition Corp. (SEAC) after Super Group’s NYSE listing.

Although its preliminary results suggest some shaky trading in 2022, Super Group remains confident in its growth prospects moving forward, particularly following the post-close acquisition of Digital Gaming Corporation (DGC).

The operating partner of Betway and Spin in the US, DGC is an online betting and gaming firm with market access in 13 states, eight of which are currently live – Super Group hopes to leverage this standing to further bolster its brands’ stateside position.

Furthermore, to complement US growth even more, the company’s board has authorized the repurchase of up to $25m of Super Group ordinary shares through to 31 December 2023.

Alinda van Wyk, Super Group CFO, remarked: “Super Group remains financially strong, and we continue to run our business profitably while investing in technology and marketing to support future growth. 

“We remain focused on operating more efficiently in 2023 in order to improve scale and our operating margins going forward.”

Making predictions for 2023, the firm anticipates the continuation of its group-wide recovery, eyeing up a 5% revenue increase to $1.44bn, with an EBITDA guidance of $235.8m (+16% margin), and expecting operating expenses to decrease by $8.6m.