Sports betting and fantasy sports provider Scout Gaming said a quieter third quarter for sports contributed to revenue declining 18.7% year-on-year for the period.
Revenue for the three months to 30 September reached SEK12.2m (£1.0m/€1.2m/$1.3m), down from SEK15.0m in the corresponding period last year.
Scout said this decline was primarily due to the fact there were fewer sports events than in the comparable period last year. The third quarter of 2020 was particularly busy, with sports leagues and events postponed as a result of the novel coronavirus (Covid-19) pandemic took place.
However, Scout was able to continue with its expansion plans in Q3, making its US debut with the launch of a North America-focused social sportsbook platform, in partnership with the Masters Cup Series pool tournament. Additional deals have been signed with Skylands Events and University Sports for the baseball Frontier League, and with Backal Hospitality group, which will see it used as a gaming platform for sports bars.
Scout also launched its products with new top-tier clients, including Norsk Tipping in Norway, which rolled out Scout’s real-money fantasy sports solution.
“We have worked intensively to launch our tier-one clients,” Scout chief executive Andreas Ternström said. “These […] clients will generate growth during the 2022 and beyond, and launching tier-one customers is the most important cornerstone of our strategy.”
Turning to costs, total operating expenses for the third quarter amounted to SEK21.4m, down 25.4% from SEK28.3m last year. Personnel costs were 42.7% higher at SEK11.7m while depreciation, amortisation and impairment of property, plant and equipment charges climbed 70.6% to SEK2.9m, though other external expenses were down 63.0% to SEK6.8m.
This resulted in an operating loss of SEK9.2m, reduced from SEK13.3m in Q3 2020. After accounting for SEK2.7m in finance costs, pre-tax loss stood at SEK12.0m, compared to SEK13.4m in 2020. After paying SEK20,000 in tax, net loss for the period reached SEK11.9m compared to SEK13.m4 last year.
Loss before interest, tax, depreciation and amortisation (EBITDA) narrowed from SEK11.6m in the prior year to SEK6.3m.
Looking at Scout’s performance over the first nine months of 2021, revenue was 31.7% higher at SEK39.5m, though operating costs were also up 20.6% to SEK81.9m.
This was reduced by SEK4.2m in gains from financial items, for a pre-tax loss of SEK38.2m, which was an improvement on the SEK40.7m loss posted last year.
The business’ net loss after tax reached SEK38.1m, compared to SEK40.7m in 2020.
After the end of the quarter, Scout also revealed that Billy Degerfeldt is to leave his role as chief financial officer. Degerfeldt will take on the same position with another business but first serve a notice period of three months.
“We made a number of organisational changes during and after the end of the quarter as well as refining our business model, in order to additionally strengthen our focus towards tier-one clients, residing primarily on the European market,” Ternström said
“With the support of signing and launching tier-one clients and the interest our offer, we see great opportunities for future growth.”
