Losses widen at Scout Gaming despite H1 revenue growth
Scout Gaming Group has reported a year-on-year rise in operating loss for the first six months of 2019, despite seeing a rise in both revenue and net sales during the period.
Revenue for the six months through to June 30, 2019 amounted to SEK7.6m (£637,073/€702,390/$775,502), up from SEK4.9m in the corresponding period last year.
Scout was boosted by an increase in revenue from end users, or net sales, during the first half, with this total rising from SEK3.6m to SEK4.2m. Revenue from its Fanteam B2C brand also climbed from SEK1.8m to SEK3.4m.
However, operating costs for the period were also up from SEK22.7m to SEK39.0m as spending across the business increased significantly.
Personnel costs were the main expense, with Scout spending SEK21.2m during the first half, while other external costs increased from SEK7.1m to SEK13.1m. Depreciation and write-down spending also climbed from SEK3.8m to SEK4.7m.
As a result of this higher spending, Scout posted an operating loss of SEK31.5m, almost double that of SEK16.3m in the first half of last year.
Loss before tax jumped from SEK16.3m to SEK29.3m, while loss for the period increased from SEK16.2m to SEK29.4m.
It was a similar story for Scout during the second quarter, although revenue was down from SEK4.9m to SEK4.0 as the operator felt the impact of lower net sales in the period.
For the three months to June 30, 2019, operating loss stood at SEK14.5m, while loss before tax hit SEK13.4m and loss for the period SEK13.3m.
However, chief executive Andreas Ternstrom was upbeat about the operator’s performance in the second quarter, picking up a number of highlights for the business during the period.
These included striking up new partnerships with France’s La Française des Jeux, Swedish newspaper Expressen, Scientific Games Digital and Digitain. Scout also secured a licence from the Malta Gaming Authority, allowing it to provide games with odds-based components to operators.
”We continue to build long-term values through agreements we entered into during the quarter, integrations we have made, as well as the products we have completed and started to launch with our partners,” Ternstrom said. “The effect of spring's work has as anticipated, started to have an effect after the summer in connection to the start of the major sport leagues.
“We have previously been somewhat behind schedule, but have caught up after the end of the quarter and are now in line with expectations of achieving a solid revenue growth during the second half of 2019.”