Home > Finance > Quarterly results > BetMakers to continue strategic restructure after Q4 savings
BetMakers has committed to continuing a cost reduction strategy in FY24 after hailing the impact of the scheme during the final quarter of its 2023 financial year.
The operator announced the scheme on 31 May, part-way through its Q4 to reduce operating overheads and save money across the BetMakers business.
This followed BetMakers warning it faced negative growth in FY23 due to outstanding investment commitments.
The restructure was in place for one month of Q4, but BetMakers said it made “significant” progress during the period. This includes net cash outflows from operations being cut 39% quarter-on-quarter.
In addition, BetMakers said staff numbers at financial year-end were reduced 15% from 568 to 485, further lowering costs. Staff figures are expected to normalise at 440 by the time the strategy completes.
“The quarter marked one of progress for the company as it continued to focus on reducing and normalising the cost base and simplifying the operating model,” BetMakers said. “The focus of the last two quarters is evidenced in the declining operational cash outflows. The company will continue to execute on its strategic restructure during Q1 FY24.”
BetMakers reveals Q4 growth
Revenue in the three months to 30 June hit AU$24.8m (£12.9m/€15.1m/US$16.6m). This was down 5% from $26.2m in Q4 of 2022 but 5% higher than $23.6m in Q3 this year.
BetMakers did not publish a full breakdown of revenue performance, but it did go into more detail on cost savings. This included both its operating and investment activities in Q4.
Overall operating cash outflow was reduced 6% quarter-on-quarter to $26.9m. Staff costs, the operator’s main outgoing, were cut 4%, while product manufacturing and operating costs were lowered by 10%. Administration and corporate costs remained level.
In contrast, net cash spend on investing activities was much higher quarter-on-quarter, with spend up across all areas. Property, plant and equipment costs rose due to the launch of new BetLine betting terminals, while higher acquisition costs were attributed to the final payment of the TexBet purchase and historical due diligence costs.
In addition, other investing-related costs were put down to movement in customer funds held on deposit in relation to the Global Tote and advance deposit wagering operations.
Cash and cash equivalents at the start of Q4 was $56.2m. After accounting for $15.2m in net cash flow – total spend minus revenue – there was $41.0m left at the end of Q4.
FY growth and cost savings
BetMakers did not go into further detail on its Q4 performance but did release certain data for its full year. This included posting $99.1m in revenue, an 8% rise from $91.6m last year.
Total operating cash outflow hit $119.0m. After accounting for revenue, this meant net cash from operating activities was $19.9m.
Net investment spend amounted to $18.7m while BetMakers also noted a further $8.4m in net financing activities cash use.
Cash and cash equivalents at the start of the year was $87.6m, with the year-end figure at $41.0m, as noted in Q4.
Changing of the guard
Aside from altering its operating strategy, BetMakers also made a number of changes to its senior management team in FY23.
In January, it was confirmed Todd Buckingham had stepped down as chief executive to take on the new position of chief growth officer. At the same time, experienced gambling executive Matt Davey was appointed president and executive chairman.
Other changes included Jake Henson being named CEO and Chelsey Abbot as chief people officer. In addition, Christian Stuart departed as North American CEO in April.
Despite cost savings, acquisitions seemingly form a key part of long-term growth plans at the operator.
In November, BetMakers completed its acquisition of ABettorEdge, trading as Punting Form. This came a little over a week after the deal was first announced.
BetMakers viewed the purchase as “strategically important”. It said the addition of Punting Form will further strengthen its position as a provider of B2B data and technology services for horse racing.
Punting Form uses proprietary IP and artificial intelligence to create sectional times and benchmarks for horse racing, which are used for time-based ratings systems. Professional wagering syndicates, betting operators, content creators and form analysts use the service.
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