Lotto24 reveals revenue and earnings growth in Q1
Online lottery brokerage Lotto24 has reported year-on-year growth across both revenue and earnings for the first quarter of the year, as it prepares to complete a merger with its former parent company Zeal Networks.
Revenue for the three months to March 31, 2019, totalled €8.6m (£7.4m/$9.7m), up 0.7% on €8.5m in the opening quarter of 2018.
Lotto24 put this down to a rise in commission from state lottery companies for the brokerage of lottery products, as well as additional fees and ticket fees in connection with the brokerage of stakes.
Billings were also up 3.6% on a year-on-year basis from €75.9m to €73.2m, but gross margin slipped from 11.7% to 11.4% due to lower jackpot-related share from its lotto clubs.
Lotto24 noted an increase in expenses for certain areas of the business, with its personnel expenses climbing from €1.9m to €2.2m. Impairment loss for financial assets increased from €90,000 to €180,000, while amortisation and depreciation on intangible assets and property, plant and equipment climbed from €303,000 to €395,000.
However, Lotto24 was able to make some savings, with other operating expenses down from €6.6m in Q1 of 2018 to €5.0m in the first three months of the current year.
This, coupled with a higher revenue performance, allowed Lotto24 to post earnings before interest and tax (EBIT) of €896,000, compared to a loss of €277,000 last year.
Net profit before tax also improved from a loss of €306,000 to a positive figure of €863,000, while a net loss of €1.3m in Q1 last year transformed into a net profit after tax of €977,000.
Reflecting on the results, Lotto24’s CEO, Petra von Strombeck, praised the first-quarter performance and also highlighted a 28.7% increase in total customers.
von Strombeck also took the opportunity to look ahead to Lotto24’s future, with its acquisition by Zeal expected to go through in the coming weeks. Last month, more than 91% of Lotto24 shareholders endorsed the takeover offer within the regular acceptance period.
“We would therefore like to take this opportunity to thank you (shareholders) for your trust – both over the past years and also in the future – and are pleased, that you will continue to accompany us, as part of the Zeal Group, on our future path,” von Strombeck said.
Zeal also posted its first-quarter results this week, revealing a 26.3% year-on-year in adjusted earnings before interest and tax (EBIT), despite a drop in revenue.
Revenue amounted to €36.5m in Q1, down 5.8% on €38.7m last year, but EBIT was 26.3% year-on-year to €11.6m, partly due to lower spending in several areas of the business.
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