SportPesa technology firm turns a profit on revenue jump
Monday June 27 2022
SPS Sportsoft Limited, the company offering technology support services to SportPesa betting firms, last year reversed its 2020 losses to book a profit of £170,433 (Sh24.6 million) indicating acquisition of new business.
The firm had made a loss of £4.1 million (Sh595 million) in 2020 after its single largest client — Kenya-based Pevans East Africa — ceased operations in 2019 after the government declined to renew its operating licence, citing unpaid taxes in excess of Sh15 billion.
Pevans achieved large-scale profitability in record time after launching operations in 2014, attracting increased government scrutiny amid concerns of increased gambling addiction.
SPS said in regulatory filings in the UK that its revenue rose fourfold last year to £6.1 million (Sh887 million) from £1.48 million (Sh214 million) in 2020, largely drawn from services rendered to clients.
Pevans used to account for 96 percent of SPS’s total revenue in the past. SPS, its parent firm Sportpesa Global Holdings Limited (SPGHL) and Pevans, which used to trade under the SportPesa brand, have common shareholders including Kenyan and Bulgarian businessmen.
Other SPS clients include SPGHL’s subsidiaries trading under the SportPesa brand in Tanzania and South Africa.
Following the licence cancellation in 2019, some of the founders of Pevans transferred the SportPesa brand to a new company called Milestone Games Limited.
It is not clear whether some of the SPS revenue draws from services to Milestone, but filings on withholding tax payments indicate that a part of the revenue came from Kenya.
The firm said that it paid the Kenya Revenue Authority (KRA) £447,005 (Sh64.6 million) in withholding taxes last year, with the levy charged at 15 percent of revenue.
This would mean that the firm recorded revenue of at least Sh429 million deriving from Kenya. In 2020, SPS had paid taxes worth £21,957 (Sh3.1 million) to the KRA.
The establishment of Milestone sparked a fallout among the pioneers of the sports betting business.
Mrs Asenath Maina, who owns shares in Pevans and SPGHL, has filed a case asking the court to affirm Pevans as the rightful owner of the SportPesa trademark.