Supreme Ventures Group suffers sharp COVID-19 hit

Supreme Ventures Group suffers sharp COVID-19 hit

Wednesday, August 05, 2020

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The Supreme Ventures Group experienced a sharp 20 per cent reduction in total gaming income and a 67 per cent reduction in net profits for the last quarter. This was primarily due to the effects of various measures implemented by the Government to curtail the spread of the novel coronavirus.

Following the group's astounding first quarter results, in the second quarter, sales were impacted by measures such as curfews, lockdowns, and social distancing regulations which resulted in the temporary closure of Post to Post Betting Limited (PSP), Supreme Ventures Racing and Entertainment Limited (SVREL), and Supreme Route Limited (SRL).

This was reflected by a 28 per cent fall in non-fixed off wagering games at $4 billion and a nine per cent fall in fixed odd wagering games at $3.4 billion.

However, there was a commensurate decline in prizes paid and payments to external agencies. This left the group with a gross profit 24 per cent smaller, at $1.51 billion.

Operating profit fell by 53 per cent to $427.1 million as a result of increased administrative expenses and reduced income over the period. When higher finance costs and taxes were factored in, the group's net profit came to $192.2 million with $206.5 million being attributable to shareholders and a $14.3 million loss related to PSP and SRL. For the six-month period, net profit attributable to shareholders came up to approximately $929 million compared to $1.25 billion.

The group's sports betting and pin codes segments had general increases in their results while lottery and gaming and hospitality saw declines in results. The loss for the horse racing segment effectively doubled to $206.2 million.

Lottery and pin codes still represent 85 per cent of the group's overall segment revenues with the remaining segments contributing the other 15 per cent.

The group's total assets were up by 16.5 per cent to $11 billion mainly as a result of numerous acquisitions over the last year. Total liabilities climbed by nine per cent to $5.81 billion with equity attributable to shareholders declining by seven per cent to $3.45 billion due to profits being lower than total dividend pay-outs up to June 30, 2020.

Subsequent to the end of the quarter, SVL declared a dividend of $0.0714 ($188.3 million) payable on September 4. This payout reflects the substantial fall in profits for the quarter compared with the $0.22 ($580.2 million) paid out in the same period last year.

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