PointsBet igaming net win fuels capital return for investors
Net win for igaming alone totalled AU$5.5m (£2.8m/€3.3m/$3.5m), which all came from PointsBet’s Canadian operations. Net win for sports betting hit $65.1m, up by 22.3% yearly. This brought the total net win to $70.6m, an increase of 24.5%.
PointsBet released its third quarter results one day before it announced its second capital return – one of two confirmed at its annual general meeting in August 2023. The plan was put in place to deliver up to $458m back to shareholders after the sale of PointsBet’s US business to Fanatics.
PointsBet agreed to sell PointsBet US for $225.0m in June 2023, following a lengthy bidding war against DraftKings.
This second capital return totals $127m, representing $0.39 per share. PointsBet said this number – which was projected to be between $125m and $143m – was based on trading conditions and the process of selling PointsBet US. Adding up both the first and second capital return, shareholders have received $442.37m back. The second capital return will be paid on 16 May 2024.
Australian and Canadian performances on the up
For sports betting in Q3, overall handle was $676.4m, representing a rise of 7.2%. Gross win was $83.4m, an increase of 12.2%.
Looking at PointsBet’s performance in each of its markets, its operations in Australia accounted for most of the total net win and handle. Australian net win was $60.8m, up by 19.9%, while gross win climbed 9.4% to $76.9m. In this market, there was a 1.0% quarter-on-quarter rise in cash active clients to 221,000. Cash active clients are players who have placed a cash bet in the previous 12 months.
PointsBet paid $24m in goods and services tax (GST), point of consumption tax and product fee payments to Australian governments and racing and sports bodies during Q3. This accounted for 43.4% of the net win.
In Canada, sports betting handle was $70.8m, representing year-on-year growth of 39.0%. Gross win climbed 65.0% to $6.6m, while sports betting net win was $4.3m, jumping 79.1%. PointsBet noted that the net win was heightened by an improved trading margin and gains in promotions efficiency. There were also 43,000 cash active clients in Canada in Q3, a quarterly rise of 12%.
Also during the quarter, PointsBet competed its integration with Strive Gaming.
Costs lessen in Q3
Receipts from customers – including GST – totalled at $70.6m.
PointsBet noted a decline in cost of sales for the quarter. This came out at $29.7m, compared to $31.6m in the previous quarter. Sales and marketing costs also lessened, falling by $8.0m to $14.0m. However, staff costs crept up by 12.6% to $9.8m, as did administration, corporate costs and GST paid on net win, which came to $11.9m.
This brought the net cash inflow from operating activities to $5.4m – excluding movement in player cash. Net cash inflow from investing activities grew $22.1m to $14.2m, while net cash flow from financing activities was $100,000.
Net cash flow was $2.0m for the quarter, marking the first positive net cash flow in PointsBet’s history. PointsBet also reconfirmed its guidance for its FY24 normalised group EBITDA loss between $9m and $14m. It also said that it expects to deliver positive group EBITDA in 2025.