Profit down at Tombola despite turnover increase in 2019

UK-based online gambling operator Tombola has posted a year-on-year decline in profit for 2019, despite experiencing an increase in group turnover during the year.

Turnover for the 12-month period to 31 December 2019 amounted to £104.4m (€122.7m/$135.7m), up 15.7% on £90.3m in the previous year.

In a filing with Companies House, Tombola said that this increase was due to an ongoing expansion of its market share across both the UK and Europe.

However, Tombola saw an increase in cost of sales for the year, with this rising by 25.4% from £56.7m to £71.1m. In addition, administrative expenses climbed 35.5% year-on-year from £14.7m to £20.5m.

Tombola said higher spending was down to continued investment in people and its products, as part of an ongoing effort to enhance its market position in the UK and Europe.

Higher spending in 2019 seemingly outweighed revenue growth, with operating profit for the year falling by 31.8% from £18.9m to £12.9m. Gross profit was also slightly down from £33.6m to £33.3m.

Profit before tax slipped 30.7% year-on-year to £13.3m, and after paying £2.0m in tax, this left Tombola with a profit of £11.2m for the year, down 32.5% from £16.6m in the previous year.

“The group is focused on the continual research and development of its products and invests much time and resource to ensure the highest quality of its product,” Tombola said in the Companies House filing.