PointsBet reported US growth across the board in fiscal 2023 as it continues to steer the ship until Fanatics takes over.
Total net win hit $109 million for the year, up 72% from fiscal 2022, including $79 million from sports betting and $30 million from iGaming. EBITDA will be reported with the company’s fiscal year report, but the normalized loss is still expected to be between $52 million and $55 million.
As expected, there was little discussion Friday of the PointsBet US business, given its pending acquisition by Fanatics for $225 million.
The process of regulators approving the sale is “tracking as planned.” Both teams have been “engaging well on the transitory requirements and integration of PointsBet” into Fanatics, according to the company’s investor presentation.
PointsBet US sale targeted for March
PointsBet also announced an extraordinary general meeting set for August 29. That will approve the framework for returning capital to shareholders, the main beneficiaries of the US sale.
According to the tentative schedule, the sale should be completed by the end of the first quarter in 2024. Shareholders already overwhelmingly approved the transaction last month.
PointsBet shareholders will see their first capital return of around A$1.00 per share in mid-September. The second payment of between 39 Australian cents and 44 Australian cents will come after the transaction closes.
Handle, actives dip
PointsBet continued to focus on its promotional efficiency, with a focus on super users and retention of clients following March Madness betting.
Active customers dropped 4% from March 2023 to 276,875 at the end of June. Sports betting handle dipped to $355 million in the fourth quarter, down 36% compared to the third quarter and 24% compared to last year.
Promotions were 34% of gross win during the quarter, down from 43% last year, with total marketing costs down 26% to $20.3 million for the quarter. For the year, PointsBet cut marketing costs by 24% to $90 million.
Net win margin jumped 2 percentage points to 5.5%, which benefited from the launch of parlays that can include multiple same-game parlays.
PointsBet profitability of remaining business
Much of the 35-minute call discussed the remaining operations for PointsBet, which includes its Australian and Canadian businesses.
The stock rose 1.5% to A$1.69 Friday after management broke down some positives:
- Fiscal 2024 net win should be 10% to 20% higher than last year.
- Marketing expenses should be 15% to 20% lower. Cash actives for the past 12 months should be higher on June 30, 2024 than they were in 2023.
- EBITDA will be at or close to break even from April 2024 with positive group EBITDA expected for fiscal 2025.
