Super Group: ‘solid foundation’ for 2024 following Q1 growth

Image: Shutterstock

Super Group has reported its highest first quarter revenue ever to begin 2024, with revenue improving by over 10 per cent year-over-year.

In response to the strong start to 2024, CEO Neal Manshe stated that the Betway and Spin parent company has a “solid foundation” for the remainder of the year thanks to its “global team’s ongoing focus and investment into core markets that are yielding strong returns”.

However, US operations are still under review, as the region reported an adjusted EBITDA loss of €22m for the period.

Publishing its Q1 results, Super Group declared a 12 per cent increase YoY in revenue to €379.3m (Q1 2023: €338.5m). In constant currency, revenue rose by 17 per cent to €389.3m.

The operator stated that revenue improvements occurred following “growth from Africa and North America (predominantly Canada) markets partially offset by declines from the Middle East and Asia-Pacific market”.

Per region, North America alongside Africa and Middle East tied at 37 per cent of the total revenue share during Q1, followed by Europe at 15 per cent, Asia-Pacific at nine per cent and South/Latin America at two per cent.

Excluding US operations, total revenue for the quarter stood at €374m, up 13 per cent YoY or 17 per cent in constant currency.

Per brand, Betway reported €222m in revenue during the quarter (2023: €198.3m), while Spin had €157.3m in revenue (2023: €140.2m).

Per vertical, online casino revenue stood at €292.2m (2023: €243m), sports betting revenue was €76.9m (2023: €81.5m), brand licensing revenue was €5.9m (2023: €8.8m) and other revenue was €4.3m (2023: €5.24m).

Super Group reported profit for the period was €41m (2023: €1.9m loss), which included “a gain on disposal of the B2B division of Digital Gaming Corporation Limited of €40.1m” in addition to “a non-cash charge of €13.1m related to the increase in fair value of option liability”.

Adjusted EBITDA improved by 29 per cent YoY to €46.5m (2023: €36.1m). Excluding US business, adjusted EBITDA stood at €69m, up 29 per cent YoY (2023: €53m) with a margin of 18 per cent.

While active in nine states, Super Group stated that it is still assessing its US operations, with the region reporting an adjusted EBITDA loss of €22m (2023: €16.5m loss). 

Monthly active customers for the quarter rose by 33 per cent to 4.7 million in comparison to 3.5 million during the same period last year.

Menashe commented: “We’ve had a phenomenal start to the year, continuing our momentum from a strong end to 2023.

“This robust performance has been delivered by our global team’s ongoing focus and investment into core markets that are yielding strong returns, providing us with a solid foundation for the remainder of the year.”

As of March 31, cash and cash equivalents stood at €289.2m (2023: €241.9m). 

The operator noted that a cash increase occurred due to inflows of €69.8m from operating activities, as well as outflows of investing activities of €20.4m and financing activities of €1.7m due to lease payments, in addition to a loss of €0.5m as a result of foreign currency fluctuations on foreign cash balances held over this period.

Post Q1, Super Group has entered into a definitive agreement to assume full control of sportsbook software technology licensed by its software partner, Apricot.

The technology is being acquired for a total consideration of c.€140m, consisting of c.€100m set off against a current loan receivable and an additional €40m payable in two equal instalments over the next two years, of which up to €20m may be paid in ordinary shares of Super Group at its sole discretion. 

In addition, further payments of up to €210m could be made through a contingent earn-out mechanism if sportsbook revenue more than doubles during the earn-out period, which runs through December 31, 2035. This is calculated as a percentage of monthly sportsbook net gaming revenue, ranging from a low single-digit to a high single-digit percentage.

Alinda van Wyk, CFO of Super Group, added: “We achieved record results for a first quarter of €374m of revenue and €69m of adjusted EBITDA, for the ex-US business. 

“Our laser focus on creating a leaner, more efficient operating model has delivered results, with Q1 operating expenses as a percentage of net revenue falling to below 19 per cent. Investment into high-growth areas of the business continues at pace and we remain confident that we are in a strong position to realise our goals set for 2024.”