Scout reduces net loss during group’s “most eventful” year
The fantasy sports provider underwent major change during its 2022 financial year, with this culminating in a restructure of its B2B segment, which led to the closure of 11 partnerships and a reduction in the total number of cooperations to 13.
Upon announcing the plans at the end of Q3, Jönsson said that the restructuring programme would aim to secure profitability in all of its partnerships and also decrease expenses.
The restructure came after Scout also raised SEK101m in a share issue process to help save the business, which came in the wake of a SEK17m commitment being discovered in the supplier’s accounts that it stated it had been previously unaware of.
In addition, Scout initiated a major restructuring of personnel – laying off 68 of 131 full time workers, including in the company’s Lviv office in Ukraine, leaving just 63 remaining staff.
Reflecting on these changes and the financial year as a whole, Jönsson said the group was confident the restructure would allow it transition to become a more profitable business in the long run.
“The most eventful year in the group’s history has come to an end,” Jönsson said. “We have during the year executed a restructuring concerning our organisation with significant reductions of personnel, our partner agreements and a successful rights issue.
“This restructuring programme together with a continued cost control is a requirement for the group to come to profitability.
“To continue the transition to become a profitable company and to create shareholder value a lot of work remains, more efficiencies to achieve and sharp focus and engagement from all of us in the organisation is required.”
Fourth quarter
Looking at Scout’s financial performance and focusing first on the fourth quarter, during which much of the restructuring took place, revenue was 20.8% lower year-on-year at SEK8.0m (£638,176/€725,176/$768,240).
Revenue from B2B operations increased 70.0% to SEK5.1m due to the increase focus on this vertical, but B2C revenue slipped 45.3% to SEK2.9m, mainly as a result of previous, non-profitable marketing campaigns.
The restructuring meant that operating costs were cut 61.2% to SEK18.8m, while a positive impact of SEK10.8m in financial items meant Scout was able to post a small pre-tax profit of SEK1,000, compared to a SEK39.1m loss in the previous year.
As Scout did not pay any tax, it ended the quarter with a net profit of SEK1,000, in contrast to a SEK39.1m loss in 2021. In addition, EBITDA improved from a negative of SEK37.9m to a loss of SEK10.7m.
Full year
Turning to the full year, group revenue declined 28.1% from SEK35.6m in 2021 to SEK25.6m.
This included SEK14.0m in B2B revenue, an increase of 45.8%, and SEK11.7m from Scout’s B2C operations, a drop of 47.3% from SEK22.2m in the previous year.
Operating expenses were cut by 23.6% to SEK93.8m, while after accounting for SEK8.0m in positive financial items, this left a pre-tax loss of SEK60.1m, an improvement on the SEK82.7m loss posted in 2021.
As Scout did not pay any income tax, the group ended the year with a net loss of SEK60.1m, compared to an SEK82.6m loss in the previous year. In addition, EBITDA loss amounted to SEK67.9m, lower than the SEK84.3m loss in 2021.
“As we execute on our plans a profitable cash generative company is a possibility and a target, even if more transformative work is needed. I am determined to continue this fight,” Jönsson said.