October 30, 2020
Supreme Ventures Limited (SVL), for the nine months ended September 30, 2020, reported a marginal decrease of 0.44% in ‘Total Gaming Revenue’ from $28.06 billion in 2019 to $27.94 billion in 2020.
Revenues from the Company’s segments were as follows:
- Revenue from ‘Non fixed odd wagering games, horse racing and pin codes’ amounted to $15.94 billion (2019: $16.70 billion), a 5% decrease.
- Income from fixed odd wagering games, net of prizes totaled $11.99 billion (2019: $11.36 billion), a 6% rise.
Whereas, revenue from ‘Non fixed odd wagering games, horse racing and pin codes’ for the third quarter ended September 30, 2020 increased 7% to $6.27 billion (2019: $5.86 billion). While, for the quarter, Income from fixed odd wagering games, net of prizes closed at $$4.15 billion (2019: $3.59 billion). The Company stated that, regarding revenue growth, “the Group’s performance was impacted by COVID-19 measures such as curfews and social distancing, which affected revenue for some segments for the quarter. The focus is on providing alternative methods to access our products to boost revenues. Overall, year to date gross ticket sales have improved by $2 billion or 3.8% over 2019.”
Direct expenses for the nine months recorded a 2% decrease to close the period at $21.94 billion when compared to $22.31 billion for the same period in 2019. SVL noted, “Direct expenses excluded prizes paid for fixed odds wagering games as these are included in gaming income.” As such, gross profit for the period improved 4% to $6 billion (2019: $5.75 billion). For the quarter, gross profit closed at $2.23 billion (2019: $1.87 billion). Management highlighted that the increase in gross profit “is attributed to improved performance of the segments as well as the addition of Supreme Route Limited and PosttoPost Betting Limited to the group results.”
Operating expenses grew 17% for the period to $3.64 billion (2019: $3.11 billion), while recording ‘Other income’ of $80.98 million relative to ‘Other losses’ of $52.27 million for the prior period in 2019. For the quarter, operating expenses amounted to $1.30 billion versus $1.10 billion booked in the previous comparable quarter. The Company highlighted that, “the increase in the Group’s operating expenses of $531 million year over year is attributed to the consolidation of PosttoPost Betting and Supreme Route Limited, which were not included in the Group’s results in Q3 2019. There was also a one- time strategic expenditure to support the current business objectives and activities associated with our planned acquisitions and expenses that support the increased revenues.”
Consequently, operating profit for the period decreased 6% to $2.44 billion relative to $2.59 billion reported in 2019. While, for the quarter, operating profit closed at $925.39 million (2019: $748.23 million).
Finance costs rose to $159.14 million (2019: $81.86 million) for the nine months. As such, profit before taxation amounted to $2.28 billion, down from $2.50 billion in 2019. For the quarter, profit before taxation totaled $868.57 million (2019: $706.04 million).
Taxation for the nine months period fell 2% to close at $725.49 million compared to $742.22 million in 2019, thus resulting in net profit of $1.55 billion, a 12% decrease from the $1.76 billion recorded in the prior comparable period. For the quarter, net profit closed at $622.83 million (2019: $526.53 million).
Profit attributable to shareholders amounted to $1.54 billion (2019: $1.75 billion) for the nine months. However, the third quarter, net profit attributable to shareholders totaled $596.07 million (2019: $512.77 million).
SVL stated that, “the reduced profitability for the nine-month period continues to be as a result of the second quarter performance which was significantly impacted by COVID19.”
Earnings per share totaled $0.59 versus $0.67 in the previous period in 2019, while EPS for the quarter amounted to $0.24 (2019: $0.20). The twelve months trailing earnings per share amounted $0.85. The number of shares used in our calculations 2,637,254,926 units. Notably, SVL’s stock price closed the trading period on October 29, 2020 at a price of $14.80.
The Company mentioned, “In addition to the expansion of Sports Betting and VLTs, SVL is in the final stages to export the lottery signal to South Africa which will expand our earnings potential for our lottery products. The subsidiaries are expected to make a positive contribution to the Group’s results despite the impact of COVID-19 on the operations.”
SVL also noted that, “Guyana resumed operations mid-August, where our primary focus is retailer recruitment to increase the network. These activities were significantly affected by COVID-19 measures implemented by the Government; however, we have since resumed operations and are focusing on activating the target retailers by close of year.”
Looking ahead, Management stated, “the Group looks forward to the continuation of improvements, the launch of key initiatives and products through our retail channel, the continued drive to grow our mobile channels through increased registration across our gaming segments, the continued build out of our business in Guyana and the improvement in the horse racing product through technological and new product initiatives. Our Lottery portfolio continues to be a primary focus while improving and strengthening our internal infrastructure and capabilities.”
Balance Sheet at a glance:
As at September 30, 2020, Supreme Ventures Limited had assets totaling $12.30 billion relative to $8.30 billion a year earlier. The increase was due mainly to a 16% and 257% increase in ‘Property, plant and equipment’ and ‘Goodwill’ which closed at $2.75 billion (2019: $1.60 billion) and $3.42 billion (2019: $1.06 billion), respectively. Notably, “the major additions are due to the acquisition of Champion Gaming Limited assets,” as per SVL.
Shareholders Equity amounted to $3.86 billion (2019: $3.46 billion) with a book value per share of $1.46 (2019: $1.31)
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