David Rose – Jamaica Observer – April 24, 2022
AFTER being hampered for the last two years by the novel coronavirus and its emerging variants, Supreme Ventures Limited (SVL) earned a historic $1 billion in consolidated net profit for its first quarter ending March 31, 2022.
The betting, gaming and lottery company had seen its net profit toggle between $600 million and $737 million between 2018 and 2021 as it hit a record in March 2020 before retreating due to the novel coronavirus pandemic. However, its lottery segment experienced a 50 per cent jump in revenues to $6.04 billion, while the sports betting and pin codes segment increased to $3.51 billion and $3.06 billion, respectively. This pushed SVL’s gaming income to a historic $12.72 billion against the backdrop of a 164 per cent rise in gross ticket sales to $27.7 billion.
“We’ve always known the company had this potential, but unfortunately, we had to survive COVID and a bunch of other issues. It really feels good to see the company showing its true potential. The fact of the matter is that we have several businesses that have benefited significantly from the removal of the DRMA [Disaster Risk Management Act]. We want people to be safe and enjoy our games. I’m happy for the shareholders, customers, and staff because we’ve been able to see what this company can do and there’s a whole lot more we can do. You haven’t seen anything as yet,” stated Executive Chairman of SVL Gary Peart in an interview with the Jamaica Observer.
When Peart took on his current role in March 2020 after the departure of CEO Ann-Dawn Young Sang, the company had just hit $10.13 billion in gaming income and achieved a net profit attributable to shareholders of $738.37 million. Since then, the company has acquired other competitors; diversified its interest into financial technology, including the acquisition of a microfinance firm; and built out other complimentary services in the group.
One of these recent endeavours is the reactivation of Supreme Ventures Lotteries Limited in Q1, which has been renamed SV REIT Limited. A REIT’s (Real Estate Investment Trust) focus is to own, operate, or finance income-producing properties. Although the subsidiary isn’t listed, Peart hinted that it could be listed on the Jamaica Stock Exchange (JSE) like its parent in the near future. SVL spent $730.67 million or double its Q1 2020 spend on the addition of more property, plant, and equipment for the group’s expansion into being a more efficient business.
“As we widen our footprint, one of the things about building an efficient company at any point in time is that you might want to spin off a subsidiary. It’s there to consolidate the real estate in the company, and as we continue to expand we’ll just centralise the real estate. It’s really an efficient way of building out the business. If in the future we need to raise capital, we could just float that real estate company if we need to,” a jubilant Peart explained.
The company’s 66 per cent rise in net profit was also matched by its operational cash flow, which moved from $129.87 million to $928.51 million during the period. This allowed the company to declare a dividend of $0.3401 to be paid on May 20 to shareholders on record as of May 6. This augers well for Mayberry Jamaican Equities Limited (MJE) which will collect $165.17 million as the number two shareholder in SVL. Peart is CEO of Mayberry Investments Limited, which controls MJE.
SVL’s performance sent its stock flying by 30 per cent to $33.41, with an immediate halt at 9:31 am on Friday, which surpassed the $33 peak achieved on May 13, 2019. Although the stock closed up 28 per cent to $32.78, the stock is up 84 per cent year to date, with a market capitalisation of $86.46 billion. Total assets closed the period at $18.19 billion, with equity attributable to shareholders of $4.55 billion.
“The average person sees Supreme as a lottery company and we don’t see Supreme as a lottery company. We see Supreme as a transaction company that has a lottery company bolted onto it. The expansion of Supreme is going to be a function of how many new businesses we put onto that platform. The gross sales for the first quarter was over $27 billion. Based on our run rate, we will hit over $100 billion in gross revenue for the first time in the history of the company. We’re doing that after only 22 years in business, which is phenomenal. The work that the team has put in just manifests itself in all these different records that we see being broken,” Peart stated.
Source: https://www.jamaicaobserver.com/news/svl-breaks-1-b-profit-mark/
