Taxes, back-to-school cast shadow over SVL sales
Published:Wednesday | August 14, 2013 | 12:00 AM
Despite marginal growth in revenue at half-year ending June, Supreme Ventures Limited (SVL) has reported a significant fall-off in profits by a fifth, a trend the company said will continue in subsequent quarters.
The company said it expects consumers to redirect their "limited" disposable income towards back-to-school expenses.
Additionally, SVL said new taxes on the gaming sector imposed April 1, will continue to adversely affect its financial performance.
For the half-year, Supreme Ventures earned J$16 billion of revenue. This is four per cent, or J$626.8 million, above the turnover in the corresponding period last year. The second quarter contributed J$8.65 billion to the six-month total.
For the review period, net profit dipped by 21 per cent from J$506 million to J$401 million.
The company said the decrease in net profit after tax were directly attributable to "higher-than-designed lottery game liabilities" and increased taxes.
"It should be noted that for the new taxation measures imposed on the gaming sector, the gaming taxes are now paid on gross revenue instead of net, as in the previous financial periods," SVL said.
During the period, Cash Pot liabilities exceeded the $72.22 million payout game design which resulted in additional prize liabilities of J$154 million in the second quarter of 2013 relative to the same period in 2012.
The company said its betting revenues were positively impacted by the introduction of Sunday betting on April 1, which contributed over J$700 million during the second quarter.
However, the gain from Sunday sales was countered by a reduction in unclaimed prizes of J$44 million, lower net win of J$119 million from Video Lottery Terminal gaming because of delayed opening of the refurbished Acropolis lounges and Odyssey, and J$38 million from discontinued hospitality operations.
Additionally, the SVL no longer retains 50 per cent of unclaimed prizes as this was paid over to the regulator, the Betting Gaming and Lotteries Commission on March 1.