Super Group expects US OSB exit costs to not exceed €45m as Q2 revenue rises 9%

Super Group has reported a 9% jump in Q2 revenue driven by growth in Africa and Canada as bosses gear up for a post-US sports betting future.

The Betway and Spin parent company reported ex-US revenue of €414.7m, up from €380.8m in Q2 2023, as Africa accounted for 38% of revenue, up eight percentage points year on year (YoY).

Adjusted EBITDA rose 8% from to €81.9m, as the operator noted a 21% YoY leap in monthly active customers from 3.7 million to 4.5 million.

Earnings were impacted by a €16.4m adjusted EBITDA loss in the US, with Super Group now planning to exit the sports betting race in the States.

Adjusted EBITDA, excluding the US, landed at €98.3m, resulting in an EBITDA margin of 24%.

However, losses for the three months to 30 June swung to €805,000. The New York-listed firm announced profit of €27.6m in the corresponding period last year.

Management pointed to a non-cash charge of €36.8m relating to the impairment of Digital Gaming Corporation-related assets as a core reason for the slump.

Breaking performance down by brand, Betway accounted for €246.3m of group revenue, with multi-brand online casino Spin representing €168.5m.

The operator continues to lead with online casino, as the vertical accounted for 79% of group revenue, or €323.2m, a five-percentage point increase against Q2 2023.

Online casino revenue jumped 18% YoY, powered by “significant growth in Africa” and “solid growth in Canada and a number of European markets”.

However, sports betting revenue slumped 13% YoY from €94.2m to €84.3m as bosses highlighted the group’s exit from India in Q4 2023 due to the hike in Goods and Services tax last year from 18% to 28%.

Geographically, Africa and the Middle East took the lion’s share of group revenue with €153.6m, up from €110.3m in Q2 2023.

North America, which is primarily driven by Canada, returned revenue of €150.1m. Super Group confirmed in July that it would be exiting the US sports betting market in favour of an online casino-only approach.

The US accounted for a €39m EBITDA loss during the first six months of 2024 across both sports betting and igaming.

Super Group said H2 adjusted EBITDA loss from the market for its igaming should be €20m and does not include “any ongoing sportsbook costs pre-shutdown”.

The operator added that the sports betting closure costs are not expected to exceed €45m, with that total including redundancies and settlements of contracts.

Elsewhere, marketing costs rose 14% to €92m, with marketing as a percentage of net revenue coming in at 23%.

Neal Menashe, Super Group CEO, said the latest report showed the company was making “exceptional progress”.

He said: “I’m glad we have reached a conclusion in shutting the US sports betting market and we continue more generally to optimise our global footprint both in terms of geography and product.

“I’m really excited to welcome English Premier League champions, Manchester City, and South Africa’s Premier Soccer League, now known as the Betway Premiership, to our brand sponsorship portfolio.

“Our outlook for the remainder of the year is strong, and we look forward to making 2024 a super year for Super Group.”

The company’s shares are down around 1% in pre-market trading to $3.34.