Date: October 29, 2018
Supreme Ventures Limited (SVL) for the nine months ended September 30, 2018 reported a 12% in revenues to $46.32 billion, up from $41.24 billion in 2017. Notably, “with the adoption of IFRS 15 (Revenue from contracts with customers), the sale of PIN codes are no longer classified as revenue, but the net commission is classified as other income” the Company noted . For the third quarter revenues amounted to $15.38 billion relative to $13.87 billion in 2017. Revenues from the company’s segments were as follows:
- Lottery – $32.98 billion (2017: $29.75 billion), a 11% increase. SVL noted, “Lottery games continue to show a strong growth trend, driven by the successful deployment of marketing and retail initiatives. Major promotional activities for the year to date include Mega Pot, Mega Cup and Cash Pot in The Streets.”
- Sports Betting – $839.59 million (2017: $516.37 million) a 63% climb. This has “benefitted from the execution of key initiatives and the JustBet Goal Rush World Cup campaign momentum,” stated SVL.
- Gaming & Hospitality – $7.62 billion (2017: $281.04 million) a significant surge. The company highlighted that “this was due to increased customer activity”.
- Horseracing – $4.62 billion (2016: $3.27 billion). The company noted, “management is focused on consistent delivery of an improved product to maintain the momentum achieved. The segment incurred a loss for the period, particularly resulting from increased expenditure on necessary repairs and maintenance. The Amote platform was officially launched in July 2018 and fully integrated in SVREL operations, which represents a significant investment in the infrastructure and earning potential of the segment.”
- Other revenue – $196.99 million (2016: $5.62 million) a significant year over year increase.
- Unallocated – $61.58 million (2017: $13.54 million).
Direct expenses recorded an increase to close the period at $41.59 billion when compared to $37.07 billion for the same period of 2017. SVL mentioned that, “There was a 12% statutory fees to the Government of Jamaica, totalling $4.12 billion for the period under review.”
As such, gross profit for the period improved 14% to $4.73 billion (2017: $4.17 billion). For the quarter gross profit amounted to $1.57 billion, 10% higher versus $1.43 billion booked for the corresponding quarter of 2017. SVL added that this was “attributed to higher amounts for key Lottery products, Horse racing, VLT and Sport Betting. PIN codes are no longer reported in Gross profits in 2018 unlike 2017.”
Operating expenses grew by 17% for the period to $2.83 billion (2017: $2.42 billion). Management noted, “This translated into profit from operations to rise year over year to $1.90 billion in contrast to the $1.75 billion recorded last year, by 9% .”
Interest income and while finance costs fell 33% and 9% for the period to $47.52 million (2017: $71.43 million) and $41.31 million (2017: $45.49 million) respectively.
Net foreign exchange loss of $16.15 million was recorded for the period compared to a loss of $3.18 million booked in 2017. SVL reported $157.52 million for ‘Other gains’ during the period compared to $3.74 million in 2017. Thus Profit before Taxation amounted to $2.05 billion, up from $1.77 billion of last year.
Net Profit after tax amounted to $1.52 billion, a 15% increase from the $1.33 million recorded for the nine months ended September 30, 2017, subsequent to taxes of 532.04 million (2017: $445.58 million). Net profit for the third quarter totaled $468.87 million relative to $409.22 million in 2017, a 15% uptick.
Earnings per share totaled $0.58 (2017: $0.50) for the nine months, while earnings per share for the quarter amounted to $0.18 relative to a earning per share of $0.16 in 2017. The twelve month trailing EPS amounted to $0.53. The number of shares used in our calculations 2,637,254,926 units. SVL’s stock price closed the trading period at a price of $16.52 as at October 26, 2018.
SVL also added, “During the quarter, the company took the decision to dispose of the Harbour Street property for $66 million, which is included in the Cash Flow Statement. This decision was made in an effort to dispose of assets not being utilized efficiently.”
In addition, SVL’s outlook includes:
- The performance of the Horse racing segment in particular is being closely monitored in order to stem losses experienced year to date, and several key initiatives are already being deployed to positively impact the business, which are beginning to show improved results.
- A key strategic and operational focus is the development of a mobile solution to further enhance the Group’s product offerings and customer experience. The company will be continuing on its strategic focus on building and growing its mobile solutions.
- The Guyana project has entered the buildout phase with the objective of a rollout in the coming months.
Balance Sheet at a glance:
As at September 30, 2018, Supreme Ventures Limited had assets totaling $6.14 billion relative to $7.01 billion a year prior. This decrease was due mainly to an 94% decline in ‘Long-term receivables’ to $28.91 million (2017: $455.41 million). ‘Goodwill’ also contributed to the overall decrease in SVL’s asset base which fell by 54% to close at $296.85 million relative to $648.05 million in 2017.
Shareholders Equity amounted to $2.93 billion (2017: $4.10 billion) with a book value per share of $1.11 (2017: $1.55).
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