SkyBet looks to future after posting 30% full-year revenue growth

SkyBet looks to future after posting 30% full-year revenue growth

Tuesday, September 18, 2018 Posted by News Team
No alternative text provided
Company posts loss as rising costs cancel out strong growth across all verticals

Sky Betting & Gaming chief executive Richard Flint said he was excited about the opportunities presented by The Stars Group’s acquisition of his company after reporting revenue growth across all verticals for the fiscal year ended June 30th. 

SkyBet saw revenue for the period rise 36.5% year-on-year to £670.5m. This was driven by a 36.7% increase in revenue from betting to £406.5m, with the vertical boosted by operator-friendly sporting results. This was aided by increased customer stakes, which were up 13% to £3.9bn, and a betting net win margin, which increased 1.8 percentage points to 10.5%. 

Sports betting revenue growth was boosted by a number of innovative new products and features launched during the year. These include Soccer Saturday Super Boost, a feature offering customers enhanced pricing on certain teams that is part of a broader campaign to enhance customer loyalty, and MyBets, a simplified bet tracking solution. 

SkyBet has also launched a new Fast Withdrawals service, allowing customers to withdraw funds and receive them almost instantly. This has been launched in partnership with one bank, and could be rolled out for others in future. Finally it has launched ITV7, a horse racing prediction game with UK broadcaster ITV, which is designed to create a new customer acquisition and retention channel.

The operator also enjoyed a strong World Cup, with 1.3m active users on its sportsbook over the tournament. It generated revenue of £33m over the course of the competition, with the majority of this generated before The Stars Group acquired the business on July 10th. 

Gaming revenue, meanwhile, was up 19.1% to £239.2m, which was credited to product innovation and exclusive content launches. Among the new products launched for Sky Vegas was Bonus Time, which randomly awards players bonus games if they are playing on the site at certain times. Customers can also use the Fast Withdrawals service for their gaming wallets. 

SkyBet generated an additional £24.7m in revenue from other sources such as free-to-play games during the year. 

Quarterly active uniques for the year were 1.8m, up 17% compared to FY2016, with the increase driven by the year’s product enhancements and new launches.

“The 2018 fiscal year was another strong year for SBG, with continued product leadership and innovation,” SkyBet chief executive Richard Flint said. “We enjoyed another year of growth, extending our leadership as the UK’s most popular online betting and gaming brand. 

“We also continued our investment in brand, technology and people, and continued delivering innovative products that meet the needs of our customers, all of which we believe combined to drive strong operating results.”

Cost of sales for the year was up 21.5% at £170.3m, resulting in a gross profit of £500.1m, up 33.2% year-on-year. Operating expenses rose 34.7% to £413.4m, with operating profit coming in at £86.7m.

As a result of increased financial expenses of £91.9m and taxes of £21.1m, Sky Betting & Gaming posted a loss of £15.3m for the financial year. 

Looking ahead, Flint said that SkyBet’s acquisition by The Stars Group would allow the business to offer its best-in-class products “to a truly global audience”. 

“We enter the rest of 2018 and head into 2019 as part of one of the world’s largest publicly listed online gaming companies, and I am excited about the opportunities that this combination presents,” he added.

The acquisition is moving closer to completion, with The Stars Group chief executive Rafi Ashkenazi revealing that the UK Competition and Markets Authority would finalise its investigation of the deal by October 14th, allowing further integration work to be carried out. 

Once it is finalised, and supported by the acquisitions of CrownBet and William Hill Australia, The Stars Group expects to generate full-year revenue between $1.995 and $2.145bn from the combined businesses. This behemoth would generate adjusted EBITDA of between $755m and $810m, and adjusted net earnings of between $485m and $545m.

“2018 is a transformative year for the business, with three acquisitions and related financings and other significant changes to our corporate and capital structure,” Ashkenazi said. “We’ve executed on these transactions and looking forward into 2019, are now focused on integration and we are confident that we will deliver on our plans to grow market share both globally and in key markets. 

“Sky Betting & Gaming is a key component of this plan and we are excited about its potential as the fastest growing and one of the largest online and mobile sports betting and gaming businesses in the UK, the world’s largest regulated online gaming market,” he explained.

Latest
Basketball

NBA strikes first European gaming partnership with FDJ

Zlatan

SBTech extends sportsbook supply deal with Bethard

New York Catskills

bet365 seals major partnership with New York’s Empire Resorts

Houses of Parliament

UK government forced to bring forward FOBT stake cut

Gaming Products & Services Directory

The essential directory for the gaming industry