Zeal Q1 revenues slip on dual-brand closure
EBIT at the lottery brokerage firm rises by 26.3% as cost reduction causes a €2.2m decrease in personnel expenses
Zeal Network today reported a 5.8% decrease in Q1 revenues to €36.5m in the first financial report following the closure of its Lotto Network and Ventura24 brands.
Lotto Network shut down in November 2018 after failing to perform in-line with expectations, while Ventura closed on the request of Spanish regulator DGOJ following a Spanish Supreme Court case.
Billings in Q1 also decreased by 7.4% to €67.4m from the same period last year, although Zeal did report a 26.3% rise in adjusted EBIT to €11.6m for the first quarter. On a like-for-like basis, billings were marginally down by 1.6%, which Zeal said was “solid” given the lower number of large jackpots during the quarter.
Net cash for the period hit €102.1m marking an increase of 36.2% while the firm made a 16% reduction in costs, including a €2.2m decrease in personnel expenses as a result of the closures.
Zeal delivered 182,000 new registered customers for the Group and its partners in Q1, up from 140,000 in Q1 2018 to mark a 30% increase. Average billings per user flatlined at €57.5.
Zeal CFO Jonas Mattsson said: “We delivered a positive EBIT performance, reduced our cost base and further improved our net cash position.
“These results highlight the strong position we have created for Zeal and set us up well as we prepare to complete our acquisition of Lotto24.
“I look forward to next week’s reunification of Zeal and Lotto24 and, together, building our Group’s future,” he added.
Zeal noted it expects to “implement further synergies and reduction in costs before exceptional items during 2019” as it prepares to transform its business from lottery betting to brokerage.
The transformation will get underway once Zeal’s deal for Lotto24 likely completes on 14 May after 93% of shareholders accepted the takeover offer.