Home > Finance > Full year results > Scout continues “path to profitability” as net loss shortens in 2023

Scout continues “path to profitability” as net loss shortens in 2023

| By Robert Fletcher
Scout Gaming Group CEO Niklas Jönsson said he remains confident of the provider becoming a profitable business after net loss shortened in 2023 following a cost-cutting initiative.

The provider completed its transformation programme in August 2023, which led to some staff being let go. At the time, Scout said this would allow it to become a leaner business and more efficient in delivering services to B2B partners.

The programme, which launched in March 2022 under former CEO Andreas Ternström, already showed signs of working in Q3. Net loss was lower in the quarter after costs were reduced.

With the initiative complete, Jönsson said this places Scout in a better position to achieve profitability in the longer term.

“We are continuing our path to become a profitable company and to create shareholder value,” Jönsson said. “We have achieved many things but we are still working and executing on more efficiencies and continued sharp focus and engagement in the organisation.

“Also, we continue to see interest from new partners and increased focus from existing partners which give us a positive view on 2024, with regards to B2B. During the past year we have also adjusted our B2C operation and developed that offering further to prepare for a year with both Euro 2024 and Copa America in June and July.

“I want to thank all partners, shareholders and employees of the group for all the support and belief in us.”

B2B growth offsets B2C decline in 2023

Total revenue in the 12 months to 31 December 2023 was SEK31.0m (£2.4m/€2.8m/$3.0m), which translated to a rise of 21.1% year-on-year.

b2b growth was up 21.1% year-on-year: Offsetting b2c’s declines

The past year was a tale of two businesses for Scout. While the provider saw B2B revenue rocket by 80.7% to SEK25.3m, B2C revenue declined 50.9% to SEK5.7m.

However, Scout maintains that B2C operations have the potential to generate profitable growth under controlled measures. Scout added that it is starting this process in Q1 of 2024.

Lower costs mean reduced net loss for Scout

Turning to expenses and total operating costs during 2023 were 42.4% lower at SEK56.5m. Furthermore, Scout declared SEK25.9m in financial income, meaning pre-tax loss improved from SEK64.4m in 2022 to SEK41.1m.

As Scout did not pay tax in 2023, this meant net loss for the year also stood at SEK64.4m, compared to the previous year’s SEK64.4m.

In addition, Scout noted that EBITDA for 2023 improved from negative SEK55.6m to a loss of SEK25.4m.

Financial expenses hit bottom line in Q4

As for the final quarter of the year, revenue increased 8.8% to SEK8.7m. B2B revenue was up 47.1% to SEK7.5m but B2C revenue declined 58.6% to SEK1.2m.

Operating costs were almost halved from SEK23.1m to SEK12.3m but Scout noted SEK1.4m in additional financial expenses. This left a pre-tax loss of SEK5.0m, wider than SEK4.3m in 2022.

With no tax paid in Q4, net loss also hit SEK5.0m, compared to SEK4.3m in the previous year. However, adjusted EBITDA loss improved from SEK15.1m to SEK3.6m during the quarter.

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