October 21, 2021
Supreme Ventures Limited (SVL), for the nine months ended September 30, 2021, reported an increase of 13% in ‘Total Gaming Revenue’ from $27.94 billion in 2020 to $31.71 billion in 2021.
Revenues from the Company’s segments were as follows:
Revenue from ‘Non fixed odd wagering games, horse racing and pin codes’ amounted to $19.26 billion (2020: $15.94 billion), a 21% increase.
Income from fixed odd wagering games, net of prizes totaled $12.45 billion (2020: $11.99 billion), a 4% rise.
The stricter measures imposed during the third quarter ended September 30, 2021, impacted SVL’s performance as revenue from ‘Non fixed odd wagering games, horse racing and pin codes’ increased marginally by 1% to $6.31 billion (2020: $6.27 billion). Income from fixed odd wagering games, net of prizes fell 7% to $3.81 billion (2020: $4.15 billion). The Company stated, “For this quarter, the operations were largely impacted by several external factors including severe Government imposed restrictions and increased lockdown days to contain the devastating spread of the Delta variant of COVID-19. The Company is grateful to have performed creditably under these challenging conditions.”
SVL reiterates, “Our customers have affirmed their confidence in our products and services, as showcased by a steady increase in transactions across our various product categories, and consistent, robust revenue growth in the face of legal and illegal competitive forces. We anticipate improved market conditions as the vaccination numbers continue to rise both in Jamaica and overseas, and the guidelines implemented by the government enable the country to better cope with changes to the pandemic’s protocols.”
Direct expenses for the nine months recorded a 15% uptick to close the period at $25.17 billion when compared to $21.94 billion for the same period in 2020. Third-quarter direct expenses amounted to $7.98 billion (2020: $8.19 billion) as Management highlighted, “Despite the difficult business environment, total prizes paid for the quarter amounted to $14.7 billion, representing an increase of 5.1% compared to Q3, 2020, as we continue to put more money back into the hands of the consumer, and help to drive the overall economy.” Despite this, gross profit improved 9% to close at $6.54 billion relative to $6 billion twelve months earlier. Gross profit for the third quarter dipped 3% year over year to $2.17 billion compared to $2.23 billion for the same quarter of 2020.
Operating expenses grew 23% for the period to $4.48 billion (2020: $3.64 billion), while recording ‘Other income’ of $102.25 million relative to other income of $80.98 million for the prior period in 2020. For the quarter, operating expenses rose to $1.60 billion versus $1.30 billion booked in the previous comparable quarter. The marginal decline in the three months was due to the partial closure of operations during the quarter based on the restrictive measures according to SVL.
Consequently, operating profit for the period decreased 11% to $2.17 billion relative to $2.44 billion reported in 2020. While, for the quarter, operating profit closed at $590.03 million (2020: $925.39 million).
Finance income totaled $24.82 million relative to the finance cost of $159.14 million reported a year prior. Profit before taxation amounted to $2.21 billion, down from $2.28 billion in 2020. For the quarter, profit before taxation totaled $498.34 million (2020: $868.57 million).
Taxation for the nine months fell 7% to close at $673.31 million compared to $725.49 million in 2020, thus resulting in a net profit of $1.54 billion, 1% less than the $1.55 billion recorded in the prior year’s comparable period. For the quarter, the net profit closed at $312.30 million (2020: $622.83 million).
Profit attributable to shareholders amounted to $1.52 billion (2020: $1.54 billion) for the nine months. However, the third quarter, net profit attributable to shareholders totaled $311.26 million (2020: $596.07 million).
Earnings per share totaled $0.58 versus $0.59 in the previous period in 2020, while EPS for the quarter amounted to $0.12 (2020: $0.24). The twelve-month trailing earnings per share amounted to $0.89. The number of shares used in our calculations is 2,637,254,926 units. Notably, SVL’s stock price closed the trading period on October 20, 2021, at a price of $18.00, with a corresponding P/E ratio of 19.61 times.
SVL also noted that “Our Guyana market is showing steady growth, and the improvements in the horse racing product and operations using technology and new product solutions promises to create a profitable, sustainable business for the first time in the history of Caymanas Park. Our flagship lottery product remains strong and has proven itself as Jamaica’s favorite game, exciting the market and satisfying our customers. We are committed to ensuring that this positioning is maintained for the next 20 years to come.”
Looking ahead, Management stated, “The Group continues to focus on expanding channel strategies and terminal expansion, which have been well received by the marketplace. SV Games (Mobile/Online) has seen exponential growth in both usage and growing the number of active online users, due to the increased number of games that can be played on the platform, as well as strong promotional and product enhancement activities. The expansion of the Supa Sellaz program has provided an additional sales channel for both our customers and third-party retailers. The Retailer initiatives continue to cement our relationship with network and enhance value added to the end customers.”
Balance Sheet at a glance:
As at September 30, 2021, Supreme Ventures Limited had assets totaling $15.18 billion relative to $12.30 billion a year earlier. The increase was due mainly to a 51% and 58% increase in ‘Property, plant and equipment and ‘Trade and other receivables’ which closed at $4.16 billion (2020: $2.75 billion) and $2.15 billion (2020: $1.36 billion), respectively.
Shareholders Equity amounted to $3.88 billion (2020: $3.86 billion) with a book value per share of $1.47 (2020: $1.46).
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