Super Group CFO: We won’t rack up “large amounts of debt” to fund M&A

Since shuttering sports betting and igaming in the US in 2024 and 2025, respectively, Super Group has gone from strength to strength by productively diverting its resources to other areas.

Whether its product enhancements in the UK, expanding across Africa, or entering newly regulated markets such as Alberta, the operator is on an upward trajectory, which shows no signs of slowing down any time soon.

For the owner of Betway and multi-brand casino unit Spin, Q2 was the second consecutive record-breaking quarter, with the $684m revenue an 18% increase year on year (YoY).

Strong growth in Super Group’s Africa segment – up 36% YoY to $310m – was a major contributing factor. In fact, the operator’s presence in the region was a key driving force behind its landmark sponsorship deal with Premier League giants Manchester United, given the club’s massive fan base on a continent which is home to almost 1.6 billion people.

The firm also noted positive results in the UK despite remote gaming duty nearly doubling to 40% last April. In fact, the quarter ended with Super Group yielding $548m in total cash, while its shares are currently trading close to all-time high levels – reaching a peak of $15.60 in July.

EGR caught up with group CFO Alinda Van Wyk to hear more about the Q2 results, the group’s strong position in UK, and why she believes the operator has been “undervalued historically”.

EGR: With this being the second record-breaking quarter in a row for Super Group, do you expect the trend to continue throughout the rest of the year?

Alinda Van Wyk (AVW): When you gain this kind of momentum, you really have to dig deep to understand your growth potential for the coming years. As we run the business in two segments – Africa and International – we need to have a growth curve for each one of them. Not every country can be one where there’s 65% guidance growth year over year, but you have to at least keep filling the bucket with potential growth uplift.

In Africa we’ve talked about our expansion plans and moving into more countries. We’re launching in Namibia, probably in Q4 this year, then we’re also looking at Kenya and Rwanda. There is a rollout plan for one to two countries every year in our Africa projections.

For International, at the moment we’re focusing more on the regulatory side. With Alberta regulated, you have to do that transition, get the product ready and do marketing assessments again in order to uplift the revenue stream. New Zealand is also coming into regulation now, which is another focus on the international side. There are one or two other new markets with growth potential for International, but we are keeping those just on the side for now so we can focus on the regulated markets first.

The other potential for growth is through M&A. There’s always something on the table we’re considering. It has been an interesting era for gaming and M&A because there were two or three big players that acquired a lot of companies over a quick period of time, but that’s not our ethos. We go about looking for the right price at the right time, while also making sure it fits our profile – but there’s something close. You have to have that combination of market expansion and M&A in order to have that significant uplift over the course of the next couple of years.

Our goal remains achieving organic growth of around 10% every year for the next three years. We’re just doing what we’re doing well, and we’ll keep our marketing ratio at around 22%. We will then see that EBITDA margin coming in closer to 30% and we’ll probably get to that billion-dollar EBITDA within that timeframe.

EGR: During the Q2 earnings call, management repeatedly mentioned discipline when it comes to M&A. When will be the right time to be less disciplined and pull the trigger?

AVW: You have to find that balance because maybe we are disciplined but a bit too conservative. As a business, we like to use our cash in a meaningful way. We don’t feel comfortable at this stage having large amounts of debt in order to fund an acquisition. Our valuation has also been quite undervalued historically. It’s better now, but at some stage it was a 6x multiple. Why would you go and buy a company at a 10x multiple when the price was expensive while you’re trading at a 6x multiple? It just doesn’t make business sense.

Now there’s a bit more of an equal playing field, we can be more constructive in deal making. We have at least one or two things really active at the moment, and we’re in a good position to negotiate. We’ve got cash and our shares are trading well, so we can offer that kind of combination. You can work on your capital structure by doing meaningful M&A. We’ve got really good momentum now and we don’t want to upset that by building a billion-dollar debt facility. The biggest thing for us is flexibility.

EGR: The company has continued to produce positive results in the UK despite April’s significant tax increase. How sustainable will this be as the year progresses?

AVW: The success story in the UK is our brand presence. The Manchester United partnership was signed this week, which really adds to that presence. We’re really excited to partner with the top three teams in the Premier League: Arsenal, Manchester City and Manchester United.

The other thing that’s beneficial for us in the UK is we’re not number one yet. We’re not at the top of the tree, which gives us the ability to grow and gain more market share. We’ve got cash, which helps us at a time when a lot of smaller operators are struggling in the UK because of the really high tax rate. It’s possible to gain market share as some of the smaller operators will diminish and fall out of the market.

What worked very well for us in our growth profile is by closing operations in the US [in July 2024] and taking that disciplined decision, we took all those resources and focused them on product in the international space, especially in the sports world. Our product was probably a five out of 10 in the UK before. We recognised our product was probably not where it needed to be and redeployed resources. Now, you can see the fruit bearing.

There’s better pricing, AI-driven tools, good interaction, and the way our book is now being presented to the market is much better. We also had quite a few casino initiatives, and this still forms the biggest part of our business. That uplift from a casino side is what’s driving the revenue growth in the UK.

EGR: CEO Neal Menashe also mentioned on the earnings call that he expects Alberta to be a more “rational” market than Ontario. Can you expand on that reasoning?

AVW: It’s more rational in terms of how we approach it. Ontario was the first province in Canada to regulate, so it was very new and the deployment was quick. We thought by day five after market opening, everything must be finished. There was a quick changeover, and we lost customers along the way. Then our peers that were close to the Canadian market entered because they saw the opportunity, and that had a massive impact on the marketing price.

Alberta’s approach is quite different. They’ve followed a very similar regulation benchmark to Ontario but allowed for a systematic approach. You’re not switching off dotcom and then diving into Alberta – there’s a phased approach as long as everything is done by the end of September. That gives you much better communication with your customers, you can keep them on the journey, and you don’t have to tap in and tap out. It’s a massive difference. The other difference is you will have to start paying tax from October.

Furthermore, some of our peers obviously have other things to focus on than Alberta, which is not a massive market – but it’s big for us. They’re not entering Alberta with a vengeance, throwing marketing money at it in order to make an appearance. They’ll probably enter when they feel comfortable. We feel it’s going to be a smoother transition in Alberta, and we know it so well. Our brands resonate there, so we’ve got hope.