The passage of Hurricane Beryl deprived Supreme Ventures Group Limited (SVG) of a “blowout” quarter as revenues for both the third quarter and nine months were flat.
For the three months ending September 30, 2024, the company earned $12.75 million relative to $12.74 million over the same period last year.
Executive chairman of SVG Gary Peart in a month-by-month analysis pointed out that sales for July and August dipped following the passage of the Category 4 storm on July 3. However, by September sales had a resurgence.
“So, if you stop and think about it and compare the prior period…performance for one month out of the quarter this year was basically comparable to three months last year,” he told Mayberry Investments Limited Senior Vice President Dan Theoc during the Mayberry Investor Forum on Thursday, October 25. “If we had our normal two months, we actually would have had a blowout quarter,” Peart further surmised.
With approximately 2,000 distribution points across Jamaica, Supreme Ventures suffered major loss of sales when the southern parishes of Clarendon, Manchester and St Elizabeth lost both power and Internet connectivity after Beryl. The executive chairman pointed out that one of SVL’s distributors in St Elizabeth and Westmoreland has still not recovered from the storm.
In fact, Peart shared that about 5 per cent of SVG’s distribution network has not been restored.
“St Elizabeth is not up to full speed but we’re happy with the recovery. We’re happy that the betting dollar seems to be growing and we expect a much better [fourth] quarter,” he expressed.
The fall-off in lottery ticket sales and horse racing betting was complemented by little to no sports betting on account of a break in league sports. When asked if the betting on the 2024 Paris Olympics would have made up the loss from betting on league sports, Peart explained that not all sports hosted in the Games have a comparable fan base like the British Premier League.
Commenting on horse racing at Caymanas, Peart shared that while equestrian venue resumed operations after the passage of Beryl, the revenues from betting was insufficient to match the cost of operating. Year-to-date there were some “good six months at Caymanas [Park]” but Beryl created adverse results in the last quarter, he added.
Nine months’ revenue for SVL was $38.6 million compared $38.38 million in the same period last year. Gross profit for 2024 was $102.84 million less than the $8.88 billion earned in the 2023.
With higher operating expenses and finance costs, the gaming group’s net profit before tax for the nine months fell 18 per cent lower than the $2.88 billion earned in the comparable period a year ago.
Total comprehensive income for the period totalled $1.72 billion versus $2.12 in the previous year.
A silver lining after Beryl
Despite the dip in profits, Peart remains optimistic that SVL can recover as he highlighted a pipeline of investments ready for roll-out, which should add new and significant revenues. Responding to Theoc’s question on innovation, the SVL executive chairman said, “We have invested in proprietary tech. Our challenge now is to roll it out to get economies of scale from all that investment.”
He continued: “But a lot of things we want to do require regulatory approval, regulatory oversight, et cetera, and there’s a process that has to be followed… and as such we are carrying a lot of costs until we can roll it out.” Peart added that SVL plans to leverage its lottery distribution network to offer more services, and that “should drive down operating expenses, which will result in better profit.
With the regard to the group’s remittance business, he pointed that while SVL has a provisional licence from the Bank of Jamaica to operate in that space, receiving a “permanent” licence will propel the prospects for scaling and growing revenue from that segment.
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