PointsBet expects to break even in mid-2024 following US business sale
In its full year results ended 30 June 2023, ASX-listed PointsBet generated net revenue of AU$383.1m ($248.1m/€227.4m/£195.3m). This was up 7.6% year-on-year. Revenue from continuing operations – removing the US business it sold to Fanatics for $225.0m earlier this year – was up from AU$195.4m to AU$210.3m.
Looking ahead to 2024, PointsBet said it expects total net win to be 10%-20% higher than FY23. Without the cashflow requirements for fuelling growth in the US, it expects EBITDA to be at or close to break even from April 2024.
Total turnover for all operations was up 15% to AU$5.7bn, with continuing operations minus the US up 11% to AU$2.8bn.
Chairman Brett Paton and CEO Sam Swanell said the group intends to build on its “strategically important place” in Australia. They aim to grow its online share in this market from a current 5% position with the benefit of a more focused approach from a people, tech and product perspective.
“We are equally excited in the outlook for our Canadian business,” they said. “The Canadian business provides shareholders continued exposure to the North American Market through a jurisdiction that is more attractive than most US states.
“The lower capital requirements and higher operating margins benefited from lower gaming tax relative to most US states create strong prospects for attractive future economics with additional provinces going live over the next two year. Our technology is a real competitive advantage in both markets.
“We believe the early stage of the Canadian business complements our more mature Australian business.”
Marketing expenses set to drop
PointsBet’s total net win was up 26% to AU$391.1m, with continuing operations up 7% to AU$230.0m. Within that, sports betting from continuing operations was up 2.0% to AU$218.5m, with igaming at AU$11.5m.
Cost of sales in 2023 was AU$220.4m, with AU$104.6m from continuing operations. Gross profit stood at AU$162.7m, with continuing operations at AU$105.7m.
Total operating expenses of AU$394.1m included AU$154.7m from continuing operations. PointsBet expected to drop to less than AU$60m in 2024 following the sale of the US business.
The AU$90.3m spent on sales and marketing in Australia and Canada is set to drop by up to 20% in 2024. PointsBet reported a negative EBITDA of AU$230.6m for 2023, with AU$49.0m of that coming from its continuing operations.
“Significant growth”
In total, PointsBet generated turnover of AU$194.8m and revenue of AU$18.2m during its first full year of trading in Canada. It saw “significant growth” in sports betting net win to AU$6.8m.
Net win for igaming was at AU$11.5m in Canada, for total net win of AU$18.3m with 30,423 cash active clients. Total sportsbook turnover in Canada was AU$194.8m, which was driven by North American sports and the Fifa World Cup.
Australian turnover increased 4% to AU$2.6bn compared to the previous year, with sports turnover increasing by 47%. That offset declines in racing turnover.