Scout Gaming requires desperate funding for intensive restructure
Niklas Jönsson, acting CEO of Scout Gaming, has disclosed that the real-money fantasy sports platform supplier has entered an intensive restructuring period.
Publishing its Interim trading report, Scout Gaming reported year-to-date corporate losses of SEK 48m (€4.5m), results which track above 2021 losses of SEK 45m.
Jönsson, who replaced former CEO Andreas Ternström in June confirmed that he had initiated a cost review as company expenses and workforce were “way too high” compared to the revenue created over a “longer period of time”.
Weak Q2 trading saw group headline revenues halved to SEK 4,2m (Q22021: SEK €8m), which reflected respective 30% and 66% revenue declines for its B2B and B2C unit.
Q2 costs were maintained at SEK 30m, as interim expenses increased by 7% to SEK 64m. Management disclosed that it had begun restructuring of personnel costs during Q2, decreasing headcount from 131 to 107 employees.
“The restructuring program which was launched during the second quarter to handle the challenges above has already given effect and full realization of the effects will be seen in the fourth quarter,” Jönsson stated.
“At that time, we will since the beginning of the year halved our workforce to a total of 63 employees within the group, in the effort to streamline the organization and better support our customers through a more efficient delivery process.”
An embattled Scout saw its Q2 EBITDA losses increase to SEK 23m (Q22021: 1 SEK 13m), as YTD EBITDA results were further compounded to a loss of SEK 41m (-€3.8m) / (H12021: SEK 28m).
Having endured a period with no positive income contributions, Scout declared its cash equivalents stand at SEK 8m (€760,000) as of 30 June.
Liquidity measures helped the company secure a SEK 20m finance bridge ‘from three larger investors’. Further developments will see the board propose a ‘guaranteed rights issue’ on funding of SEK 101m at its coming general meeting.
“In the end of the second quester, the Board decided to put forward a proposal to the extra general meeting for a rights issue of mSEK 101 which we are currently working on,” Jönsson continued
“Many of our larger shareholders have guaranteed their part of the rights issue and we are very happy and proud that they share our vision of a positive future.
“In connection with the rights issue the main shareholders also have given the group a bridge financing of mSEK 40 to secure the liquidity situation until the rights issue is completed.”
Corporate developments have seen Scout launch a new B2B business model that will be applied across its 17 active partners, generating fixed monthly income from its fantasy sports solution.
“Post the quarter end, we are proud that we have launched our Fantasy product on the world leading sports betting operator bet365 on more than 120 markets. In addition to the Norwegian State Lottery,” Jönsson commented on directives.
“Norsk Tipping went live, representing a key strategic objective of working with global state lotteries. The integration with bet365 isn’t only the largest the group has performed but also the fastest that Scout Gaming has performed.
“The integration with bet365 isn’t only the largest the group has performed but also the fastest which Scout Gaming has performed.”