Super Group (SGHC) Limited — FY2023 Form 20-F
Reporting period: Fiscal year ended December 31, 2023; the filing is an annual report, not a separate Q4 report. Financial statements are prepared under IFRS as issued by the IASB and presented in euros.
Business context
Super Group operates online sports betting and casino gaming through Betway and Spin, including the UK-focused Jumpman business and U.S. operations acquired through Digital Gaming Corporation (DGC). The company reported licenses in 25 jurisdictions, operations in 26 countries, and approximately 3,700 employees. Average monthly active customers were 3.97 million; total wagers were €36.7 billion.
Key financial metrics
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | €1,436.1 million | €1,292.2 million |
| Profit/(loss) before tax | €16.8 million | €216.5 million |
| Net profit/(loss) | (€8.6 million) | €182.3 million |
| Basic and diluted EPS | (€0.0212) | €0.3703 |
| EBITDA | €92.8 million | €282.4 million |
| Adjusted EBITDA | €198.2 million | €210.9 million |
| Net cash from operating activities | €132.8 million | €166.8 million |
| Cash and cash equivalents at year-end | €241.9 million | €254.8 million |
Revenue increased 11.1% as reported, or 21.1% at constant currency. Adjusted EBITDA margin was approximately 13.8%, versus 16.3% in 2022. Marketing expense was €367.0 million; management reported marketing expense at 26.7% of gaming revenue, down from 27.4%.
Revenue mix was €1,079.1 million online casino, €296.9 million sports betting, €34.1 million brand licensing and €26.0 million other revenue. Geographic revenue was led by North America (€544.4 million, 38%), Africa and Middle East (€414.9 million, 28%), Asia-Pacific (€224.9 million, 16%), Europe (€224.9 million, 16%) and South/Latin America (€27.0 million, 2%). Canada contributed €514.0 million and South Africa €317.3 million.
Year-end current assets exceeded current liabilities by €101.3 million. Restricted cash was €38.3 million. Interest-bearing loans and borrowings were €0.1 million; lease liabilities were €29.1 million. The company reported no dividends to ordinary shareholders.
Material changes versus FY2022
- Net loss replaced FY2022 net profit, while adjusted EBITDA declined 6.0% and operating cash flow declined 20.4%.
- Revenue growth reflected stronger African and European performance and casino content growth, partly offset by adverse sports-betting margins and foreign-exchange movements. Constant-currency growth exceeded reported growth.
- Betway sports-betting revenue fell 21.1% to €296.9 million, attributed largely to industry-wide unfavorable sports margins and a €30 million impact from Indian regulatory changes and the company’s exit from India at the end of Q3 2023.
- Casino revenue rose, including growth in Betway fixed-odds contingency games. Spin revenue increased 3.5%; European growth included a full-year contribution from Jumpman, acquired in 2022.
- Direct and marketing expenses rose 16.1% to €1,136.9 million, including higher gaming taxes, licensing costs and continued investment. General and administrative expenses increased 2.8%.
- Cash from investing activities was a €5.0 million outflow, compared with a €96.5 million outflow in 2022; cash from financing activities was a €131.2 million outflow, principally reflecting loan repayments.
Outlook, commentary, risks and unusual items
- Outlook and liquidity: No quantified FY2024 revenue or earnings guidance is provided in the supplied filing text. Management said existing cash should fund working-capital and capital-expenditure needs for at least 12 months from the April 25, 2024 financial-statement issuance date, while noting financing might be needed if circumstances change.
- Unusual items: FY2023 included a €35.9 million DGC goodwill impairment and a €28.6 million loss from remeasuring the option relating to the DGC B2B division. Adjusted EBITDA also excluded €10.4 million of India market-closure costs. FY2022 included significant one-off transaction and listing items and non-cash warrant and earnout fair-value gains, making reported net profit comparisons especially uneven.
- DGC performance: DGC contributed €29.9 million of revenue and a €66.3 million loss before tax for FY2023. The impairment reflected slower-than-expected U.S. growth, competition and delays in state launches. Management disclosed sensitivity to further impairment if growth or valuation assumptions weaken.
- Post-year-end transaction: The DGC B2B division was classified as held for sale at year-end and sold on February 1, 2024 for amended consideration of $12.9 million, including $2.9 million deferred to October 31, 2024; a disposal gain was to be recognized in Q1 2024.
- Controls: Management and the auditor concluded internal control over financial reporting was ineffective at December 31, 2023. The identified material weakness concerned insufficient contemporaneous documentation of review controls over DGC goodwill impairment forecasts and DGC purchase-price allocation. No related financial-statement misstatement was identified; the auditor issued an adverse ICFR opinion but an unqualified opinion on the financial statements.
- Legal and regulatory exposure: Customer claims contesting the legality of services remain pending in Austria, Germany and the Netherlands. Jumpman disputes a £21.5 million UK tax assessment for remote gaming duty; no provision was recorded because management did not consider payment probable. The group carried €44.8 million of provisions for withholding, indirect and gaming taxes. The UK Gambling Commission concluded its Jumpman license review in April 2024 with advice as to conduct, not a formal sanction.
- Commitments and operating risks: A London lease expected to commence in July 2024 carries approximately €86 million of commitments, including estimated €17 million leasehold improvements. Other major risks include changing gaming laws and taxes, customer wagering-margin volatility, third-party technology and payment-provider dependence, cybersecurity and privacy exposure, foreign exchange, and competition. The group reported no currency hedges.
- Tax and related-party considerations: The company identified potential exposure to OECD Pillar Two top-up taxes, particularly in Guernsey and Malta, but stated the amount could not yet be reasonably estimated. It also reported €91.4 million of year-end loans receivable from Apricot, a major sportsbook and platform provider; further post-year-end advances brought total disbursements under the agreement to its €98 million cap.
Important facts for investors to verify
- Review the audited statements and reconciliation of IFRS results to adjusted EBITDA, including the company-specific exclusions and the large FY2022 non-recurring fair-value gains.
- Track remediation of the DGC-related material weakness and whether management and the auditor conclude controls are effective in a subsequent reporting period.
- Assess DGC’s U.S. launch, losses, impairment assumptions and any further impairment risk; confirm cash received and deferred consideration from the B2B sale.
- Monitor sports-betting margins, Indian exit impacts, market-level tax and licensing costs, and the sustainability of casino-led revenue growth.
- Follow the outcomes and potential financial effects of customer litigation, the £21.5 million HMRC assessment, other tax contingencies and Pillar Two implementation.
- Verify liquidity after loan repayments, the Apricot advances, the London lease commencement and other commitments; distinguish unrestricted cash from restricted customer and guarantee funds.