BetMakers saw its share price fall 15% after announcing negative adjusted EBITDA of AU$27.9m for the year.
While revenue grew during the 12 months to 30 June 2023, the gambling technology group missed consensus earnings estimates. BetMakers’ earnings were impacted by an impairment of its assets to the value of $8.9m. Its shares were down 15.4% to $0.110 at the close of trading on the ASX.
The Australia-headquartered group’s revenue grew by 3.7% to $95.0m compared to $91.7m in 2022.
BetMakers said revenue growth was boosted by the launch of the Next Gen wagering platform and managed trading service technology. The expansion of content distribution rights and partnerships in global markets also contributed.
Its global betting services division accounted for $43.1m of that total, which was up 6.1%. This was aided by revenue derived from the acquisition of Punting Form in November 2022. Other developments included its launch in Jamaica and advancements in New Jersey.
Global tote remained its largest division, although this was down 3.5% year-on-year to $45.3m. During the course of the year it became the exclusive provider of pari-mutuel racing services for Caesars Entertainment in Nevada.
The global racing network division was up more than 60% to $6.7m. This growth was attributed to its new fixed-odds offering in New Jersey.
Costs pressures lead to operational restructure
In terms of outgoings, cost of goods sold was up from $25.4m in 2022 to $35.9m. Gross margin was down from $66.3m to $59.2m in 2023.
Major outgoings during the year included investment in new technology totalling $8m and $7m spent on its international fixed odds offering.
BetMakers said “significant” resource was used for the development of its Next Gen platform in the first half of the year. The platform is powering the Betr brand and it is hoped this will enhance other areas of the business.
BetMakers said it was able to reduce costs across product manufacturing and operating, staff and administration following an operational restructure based on efficiency. The group announced a $20m cost reduction programme in May.
Over the course of the year, headcount was reduced by 23% compared to the peak in December 2022. The restructure also included the simplification of the global operating model and the consolidation of key software offerings.
BetMakers narrows loss
BetMakers posted negative adjusted EBITDA of $27.9m for the year. Its loss after income tax benefits was $38.8m, compared to $89.2m a year ago.
Chief executive Jake Henson, who was appointed in January, said the year had been “transformative for the group”. He said the business will seek to deliver growth by advancing current opportunities with Norsk Rikstoto, Penn Entertainment and Caesars Entertainment.
Henson said: “FY24 has been identified as a period to aggressively drive further simplification to the operating model and to retire legacy systems in order to establish a solid foundation for growth and generate positive operating cash flow.”
Henson replaced long-time CEO Todd Buckingham in January after the group warned that it could experience negative growth throughout FY2023.
