PointsBet share price falls as US expansion costs lead to $22m loss
Australian operator’s share price dips 10.46% despite reporting triple-digit growth in full-year revenue
PointsBet’s share price fell 10.5% today after the Australian operator announced a full-year operating loss of AU$32.7m (US$22m), largely due to increased investment to aid its expansion into the US sports betting market.
The Melbourne-headquartered firm’s share price dropped to AU$2.91 (US$1.96) on the back of the FY19 results, although its shares are still much higher than its AU$2 per share (US$1.34) IPO in June.
Normalised EBITDA loss increased from AUD$6.1m (US$4.1m) in FY18 to AU$32.7m (USD$22m) following investments of AU$19.5m (US$13.1m) in the US and Australian trading (US$6.8m), although the firm’s top-line figures were more positive.
Full-year revenues increased 173% year-on-year from AU$9.4m (US$6.3m) in FY18 to AU$25.6m (US$17.2m) in FY19 on a normalised basis, while registered clients increased 254% and turnover increased 244%.
PointsBet says it is well placed to succeed in the US sports betting market. Source: PointsBet FY2019 Results presentation
Group CEO Sam Swanell said the operator was on the “starting line” of US sports betting and was well placed to benefit from the ongoing growth of the market.
“Pending favourable legislation, PointsBet already has market access agreements for ten US states with a combined population of approximately 81 million, with those States representing an estimated sports betting revenue market of US$4.6bn per annum,” he said.
Swanell added: “The team is laser focused on the clear opportunity ahead and is structured in such a way to deliver maximum economies of scale as we enter new markets.
“Through our in-house technology platform and one team global structure, PointsBet will benefit from operating margins that deliver a competitive advantage for the long term.”
PointsBet has spent much of the last 12 months ramping up its presence in the nascent US betting market where it currently has access to 10 states, aided by its recent deal with Penn National.
The company also recently announced plans to establish a major tech hub in Denver, Colorado, and hire up to 200 new staffers with at least 50% to work on product and technology.