The PointsBet Holdings Ltd (ASX: PBH) share price fell 2% at the open today despite releasing what seems to be some impressive half-yearly results this morning.
Indeed, the gambling thematic that gained momentum since the onset of COVID-19 shows no signs of slowing down as evidenced by the bookmaker’s results.
PBH share price chart
Key highlights
PointsBet’s key growth driver over the last 6 months has undoubtedly been its partnership with NBCUniversal, allowing it to gain access to world-leading broadcasting and digital assets over the next 5 years.
Active clients in the US are up 222% against the prior corresponding period (pcp) and 71% since 30 September 2020. Operations launched in Illinois and Colorado during the period and stars Shaquille O’Neal and Paige Spiranac have been appointed as brand ambassadors.
Group net win, which roughly translates to gross profit, came in at $82.8 million for the period, an increase of 177%. Turnover, which is the total volume of bet transactions, increased to $1.8 billion, up 255%.
Active clients that use the PointsBet platform continue its upwards trajectory, with an increase of 77% and 222% in Australia and the US, respectively.
PointsBet’s financials
On a normalised basis, net revenue came in at $75.1 million, with a much higher marketing expense in the US and Australia. Sales and marketing ($62.9 million) represent 83% of net revenue, which the group said was primarily used in the US as part of its US$393 million marketing spend commitment under the NBCUniversal agreement over the next five years.
EBITDA came in at a loss of $71.3 million and the net loss for the group was reported to be $85.6 million.
On a cash flow basis, PointsBet had a net cash outflow from operating activities of $48.8 million across the period, with $82.7 million received from customers, and $152 million paid to suppliers and employees. This spending has mainly been financed through a previous capital raising in September last year, with the company’s cash balance at $388.3 million as of 31 December 2020.
Summary
To me, this is undoubtedly a pleasing result that confirms the prior growth PointsBet has seen recently. At the time of writing, the PointsBet share price is down just over 2%, which could seem conflicting based on the positive results.
I think when companies go through periods of such rapid growth, which is reflected by rallies in the share price, there can often be high expectations priced into the stock, which could be the case here.
Nevertheless, I think it’s a solid result and I look forward to seeing PointsBet’s performance in the remainder of 2021 and beyond.
