Pointsbet share price marching higher on FY 2024 growth outlook

Chairman Brett Paton and CEO Sam Swanell addressed Pointsbet shareholders.

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The Pointsbet Holdings Ltd (ASX: PBH) share price is marching higher today.

Shares in the All Ordinaries Index (ASX: XAO) sports betting company closed flat yesterday at 73 cents. In morning trade on Tuesday, shares are swapping hands for 74 cents apiece, up 1.4%.

For some context, the All Ords is up 0.4% at this same time.

This comes in the wake of the company's annual general meeting (AGM).

Here's what's happening.

What happened at the AGM?

The Pointsbet share price is in the green following addresses from both chairman Brett Paton and CEO Sam Swanell.

Paton reviewed the most "pivotal event" of the year. Namely the sale of Pointsbet's United States business to Fanatics Betting and Gaming for a headline purchase price of US$225 million.

The company received the first US$175 million of those proceeds on 30 August following initial sale completion. Management anticipates the remainder in Q3 FY 2024 upon subsequent sale completion.

With Pointsbet's funding requirements decreased following the sale, shareholders approved a two-tranche capital distribution of up to $458 million on 29 August.

"On 22 September we completed the first capital return of $1 per share, delivering $315.4 million back to shareholders," Paton said.

This capital return explained the plunge in the Pointsbet share price on 6 September (pictured on the chart above) when shares traded without rights to that return.

Paton said investors can expect the second capital return of between 39 cents and 44 cents per share "to be implemented soon after the final completion of the sale of the US business in the second half of FY24".

Taking the podium, CEO Sam Swanell said the company's Canadian business "provides shareholders continued exposure to the North American Market through a jurisdiction that is more attractive than most US states with no partner fees, an acceptable tax rate and iGaming complimenting sports betting for the entire market".

Turning to the financials, Swanell noted:

Over the past five years the company has grown revenue in our continuing operations (being the Australian and Canadian business) from $26 million in FY19 to an anticipated $230 million to $250 million in FY24. That's 10-20% up on FY23.

We expect the continuing operations to be run-rating at EBITDA monthly breakeven around April 2024 and to be EBITDA positive in FY25.

Swanell expects Pointsbet can deliver ongoing profitability growth without any external funding requirements.

Pointsbet share price snapshot

Factoring in today's gains, the Pointsbet share price is trading right where it was a month ago.

Longer-term, shares are down 19% over 12 months, taking into account the $1 per share in capital returns.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended PointsBet. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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