Scout set for Q1 revenue growth despite Covid-19 impact
Fantasy sports solutions provider Scout Gaming Group has said it expects year-on-year growth in revenue for the first quarter, despite its business being impacted by the ongoing novel coronavirus (Covid-19) pandemic.
In a trading update, Scout forecast that revenue for the three months to 31 March should amount to between SEK8.2m (£660,738/$813,281) and SEK8.7m, which would represent year-on-year growth of 134-149% compared to SEK3.5m in Q1 last year.
Scout said revenue was positively impacted by strong underlying client activity during the period, up to the suspension of sports in mid-March as a result of the coronavirus.
The mass cancellation of sporting events around the world from the middle of March cut turnover. This, it said, is expected to have a negative impact on revenue of between SEK1.0m and SEK1.5m.
Though Scout did not go into further detail about its performance in Q1, it did set out other measures it has implemented to protect the business from coronavirus.
Scout has allowed employees and critical external contractors, where possible, to work from home. As a result, it said there has not yet been any major disruption to the business.
The provider also said it been able to continue to provide an attractive offering to clients, including daily fantasy sports tournaments, match-up duels and player performance odds on local leagues that were not part of its offering prior to the outbreak.
In addition, Scout has launched a full set of esports-related markets in order to compensate for the lack of traditional sports events.
“Even though it is impossible to foresee the future development of this ongoing pandemic, we currently only expect temporary negative impact on our business from the ongoing coronavirus outbreak,” Scout chief executive Andreas Ternstrom said.
“Our best guess at the moment is that sports will be resuming successively during the summer. In order to maintain financial stability, we have adapted our cost base through overseeing and hence reducing mainly levels of marketing related costs, but also personnel costs as well as operating costs in general.
“The current situation is by no doubt very challenging, but I’m extremely impressed in how our full organisation put their maximum effort and creativity to handle this in an optimal way. I’m very positive on the outlook of Scout Gaming as we continue to agree significant deals with market leading operators.”
In February, Scout reported a 70.6% year-on-year increase in revenue for 2019, but also posted a loss of SEK52.2m, a 14.0% rise on the previous year. However, at the time, Scout maintained that its long-term strategy is paying off, with new client sign-ups also up during the year.