BetMakers set out plans for an operational restructure in May last year with the aim of reducing costs. This included reducing its total staff headcount to around 440.
The restructure of Global Tote restructure means BetMakers now has a global headcount of 430 full-time staff. This is slightly below the target number, with the staff reduction leading to AU$400,000 (£209,219/€239,354/US$254,182) in costs.
Alongside the restructure, BetMakers has been further boosted by extensions with several key clients. During Q1, Global Tote extended with Penn Entertainment, while the Global Betting Services division renewed with Pointsbet, Dabble and 888.
Elsewhere, testing on an embedded tote solution for point-of-sale wagering with Caesars in Nevada is entering its final stages. Both BetMakers and Caesars hope to go live before the end of the calendar year.
A new national tote system with Norsk Rikstoto in Norway is on schedule to go live in early 2024. In addition, new pricing agreements were signed in Africa and talks were held over further fixed-odds wagering in the US.
“The quarter marked one of further progress for the company,” BetMakers executive chair Matt Davey said. “We continued to focus on reducing and normalising the cost base and simplifying the operating model.
“The restructure of the US operations is now complete. This provides a strong footing to build further scale in the US in a profitable way.
“We were able to extend contracts with key partners. This helps underpin our revenue for the remainder of FY24 and beyond. Importantly, it also shows our technology is delivering value to our customers.
“We also upgraded our hardware monitoring technology and signed an embedded race book agreement with TonyBet, further strengthening our technology capabilities.”
BetMakers may look to cut more costs
However, Davey hints that BetMakers could look at making further cost savings. This, Davey says, will help to further improve its cash performance.
“There is still significant room for improvement with our cash performance, but we expect to see some of this improvement come through in the second quarter of FY24 with significantly reduced outflows and a continued focus on costs,” Davey said.
“We remain confident in our ability to reduce our annualised cost base through FY24 to move the business to cashflow breakeven.”
Jake Henson, who took over as CEO at BetMakers earlier this year, agrees. He said: “The team has done a great job in simplifying our operating model and sharpening our focus over the past six months.
“There will be a continued focus on reducing and normalising the cost base and we expect to achieve stronger underlying cash receipts in Q2 due to, among others, the commencement of a new racing season and the onboarding of new clients.
“We expect further commercial launches in coming months will keep our top-line growing while we are continuing to strive for reaching positive underlying EBITDA and operational cash flows.”
Revenue growth at BetMakers in Q1
Turning to financial performance in Q1 and the good news continues for BetMakers. For the three months to 30 September, revenue was 9.3% higher at $26.1m. BetMakers says this was driven by new customer growth.
Cost of goods sold was 19.0% higher at $9.9m, leaving an increased gross profit of $16.2m, up 4.0%. However, costs were reduced elsewhere as part of the wider restructuring programme.
Staff expenses were cut by 25.5% to $12.1m and other operating costs were down 16.8% to $4.8m. As such, underlying EBITDA loss was reduced by 88.2% to $767,000, in contrast to the $6.5m loss in Q1 last year.
“While we were very pleased with the operational progress, we were also pleased to see solid revenue growth in the quarter driven by new customers and our new technology,” Davey added.