Aspire Global Profits in 2019 Hit by Israeli Tax Settlement Bill

Aspire Global, owner of Campeon UK, has just reported a 97.5% year on year drop in its 2019 net profit. The company has claimed that the main cause is a major tax settlement in Israel. However, Aspire did report an overall increase in net revenue this year. In total, the 2019 net revenue was £109.5 Million. Which is a massive jump when compared to 2018’s £86.9 Million, an increase of 26%. Most of the company’s revenue came from its B2B sector. This made up 62% of the revenue, totaling £68.13 Million, which was 43.3% up on the previous year. Meanwhile, B2C revenue, from the company’s proprietary brands which naturally include Campeon UK, rose 4.8% to £42.26 Million.Aspire Global Profits in 2019 Hit by Israeli Tax Settlement Bill

Location, Location, Location

All and all when Aspire crunched the number and broke them by location, they noted several shifts. Firstly, there was a drop in the UK, Ireland, and the Nordics. The Nordics saw the biggest drop of 16.6% to £21.7 Million. The UK and Ireland, on the other hand, fell by 8.3% to £15.71 Million. So, it was the rest of Europe than made up for these losses. They showed a year on year increase of 62.8% to £69.9 Million. Also, although a minor contributor, the Rest of the World grew 48.3% from £3.61 Million.

Rising Costs

Unfortunately, spending also grew. Overall, the costs rose 30.1% from £67.90 Million to £88.8 Million. They have attributed this to increased hires and better technology. On top of this, its distribution expenses increased by 35.9% to £73.17 Million. Gaming duties did drop to just £3.5 Million. However, this was counteracted by the 14.1% increase in admin expenses, to 12.7 Million. To top it off, Aspire’s amortization and depreciation costs more than doubled, up 105% to £3.3 Million.

As we understand, because of the higher spending, the operating income fell 8.3% YOY. Therefore, overall, the income before taxes dropped 13.3% to £14.20 Million. Yet, the biggest issue Aspire faced was the December Israeli tax settlement. After coming to an agreement with the country’s authority, they had to pay £11.4 Million in retroactive tax. Aspire’s CEO wasn’t too gloomy though and praised the company’s “strong growth despite changes in the market”.