GVC financial report

Better Collective publishes financial results for Q4 2019

Better Collective has published its financial figures for the final quarter of 2019. Despite low average sports win margins, the company still broke records in both revenue and operational earnings.

The Copenhagen-based affiliate has also revealed its full-year results.

Records set in Q4 

A 51% increase in year-on-year revenue was reported during Q4 2019, compared to same period in 2018. This totalled €19.6 million, up from €12.1 million. Organic revenue growth stood at 24%.

Better Collective also reported more New Depositing Customers (NDCs). Over 118,000 of these came through in Q4 2019, which was 55% more than in the previous year. Of these, the majority were organic.

At the close of its Q4 2019 accounts, an operating profit (EBIT) of €5.5 million (Q4 2018: €4.2m) was made. After tax, these profits were €3.3 million (Q4 2018: €3.1 million).

Jesper Søgaard, Better Collective CEO, shared his thoughts on the company’s business performance in the final quarter of last year. These were as follows.

Søgaard Better Collective“In Q4, we experienced some headwind due to very low average sports win margins. Still, we delivered the highest revenue and operational earnings in company history.

“Q4 saw record high player activity (gross gaming and deposit values), which unfortunately did not materialise in corresponding revenue growth due to the low margins particularly in November.

“The lower than average sports win margin reduced revenue and EBITA by an estimated 2 mEUR in Q4. December started weak but still delivered the highest monthly revenue in company history.”

In Q4 2019, Better Collective also won multiple medals. These include Sportsbook Affiliate of the Year at the Malta Gaming Awards, plus two other accolades at the EGR Awards.

Full-year results 

Better Collective also released its full-year results for 2019, in which it made €67.4 million (full-year 2018: €40.4 million) in revenue. This was a growth rate of 67%, compared to 2018, 26% of which was organic.

Over the whole of last year, EBITA before special items totalled €27.2 million (2018: €16.1 million. After tax, a net profit of more than double was announced. This figure was €13.9 million, compared to €5.5 million in 2018.

Amongst other things, the US market played a role in Better Collective’s growth last year. When looking back on 2019, Søgaard acknowledged that “important inroads” had been made here.

Looking ahead

Søgaard spoke about the company’s 2019 results, declaring that it had “landed well in line” with its financial targets.

He also spoke about Better Collective’s merger & acquisition (M&A) strategy. Søgaard said that a new acquisition could be completed soon, with his words being as follows.

“We continue to deliver on our M&A strategy. Increased bank facilities of 40 mEUR and a capital increase of 30 mEUR in 2019 have secured the possibility to contin- ue executing on our strong M&A-pipeline.

“We are in advanced negotiations for the potential acquisition of 100% of the shares in an esport company for up to 34 mEUR. The target company’s main business model is to promote and advertise sports betting operators and we believe there will be strong synergistic effects between the two companies.

“During the coming period, we will negotiate the final purchase agree- ment and perform customary due diligence. Therefore, it cannot be guaranteed that the transaction will be completed, however, we assess that there is a likelihood that it can be completed in the first half of 2020.”

Better Collective acknowledged gambling tax increases in Denmark, due to come into force next year. In its official report, the company said that it expects this to have a “minor impact” on its business. However, it did say that there would be “mechanical impact on our commission relative to the tax increase”.

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