PointsBet (ASX:PBH) share price on watch after stellar sales growth but $187m loss

This sports betting company's shares will be in focus today…

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The PointsBet Holdings Ltd (ASX: PBH) share price will be on watch today.

This follows the release of the sports betting company's full year results.

PointsBet share price on watch after strong year but large loss

  • Turnover up 228% to $3,781.4 million
  • Revenue increased 159% to $194.7 million
  • Normalised EBITDA loss of $156.1 million
  • Normalised loss after tax of $164.3 million compared to $39.7 million loss in FY 2020
  • Statutory loss after tax of $187.1 million
  • Cash balance of $276.2 million (including $30.6 million of client cash)

What happened in FY 2021 for PointsBet?

For the 12 months ended 30 June, PointsBet reported a 228% increase in turnover to $3,781.4 million. This was driven by a 117% annual increase in Australian active clients to 196,585 and a 661% increase in US active clients to 159,321.

Also growing quickly was its gross and net win. PointsBet's gross win increased 201% to $353.1 million, whereas its net win jumped 152% to $207 million. This ultimately led to the company reporting a 159% increase in revenue to $194.7 million for FY 2021.

However, due to big increases in its cost of sales and operating expenses, PointsBet reported a normalised loss after tax of $164.3 million. This sizeable loss could potentially weigh on the PointsBet share price today.

One of its largest expenses was marketing. The company spent $51.4 million on Australian marketing. This includes a refreshed brand campaign featuring NBA MVP Shaquille O'Neal. Over in the United States, its marketing spend came to $119.2 million. Management explained that this reflects an increase in the number of operating jurisdictions. Its US marketing expense is expected to continue to increase as its footprint expands.

What's next for PointsBet in FY 2022?

No guidance was given for FY 2022, nor has a trading update being provided for the first two months of the financial year.

However, management appears confident in the future after a busy year. In fact, it feels that everything is now in place to attack the massive US market.

It commented: "PointsBet has put together all the pieces of the puzzle needed to take advantage of the significant North American opportunity – with a continued focus on first class execution and building upon the growth and success achieved to date."

The PointsBet share price is down 11% in 2021.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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