Financial News — Weekly Round-up for August 18, 2017

Zeal Network Pleased With H1 Results

Foundations laid for further growth, CEO says

ZEAL Network delivered its first half 2017 results this week, saying foundations for further growth has been laid and its “internationalisation” strategy driven forward.

Key performance indicators for the six month period ending June 30, 2017 include:

Revenues amounting to Euro 62.4 million (H1/2016: Euro 38.3 million).

Total operating performance reaching Euro 65 million (H1/2016: Euro 61.4 million), up 6 percent.

EBIT of Euro 7.9 million (H1/2016: Euro 10.3 million), the decrease primarily due to investments in marketing activities, higher personnel costs and higher hedging expenses.

Net profit of Euro 5.6 million (H1/2016: Euro 6.3 million).

Earnings per share of Euro 0.67 (H1/2016: Euro 0.75).

The company hailed a successful beta launch in Norway and a Euro 1.9 million investment in Los Angeles-based tech start-up Omaze Inc, an online fundraising platform that offers once-in-a-lifetime experiences and exclusive merchandise in support of charitable causes.

Dr Helmut Becker, chief executive officer of ZEAL, commenting on the results, said: “In the first half of the year, we made good progress and stayed fully in line with our internationalisation strategy. Later this year, we expect to receive a licence to operate in the Czech Republic.

“Our innovative lottery products and long-standing experience help us to make successful new market entries. At the same time, we further push the expansion of our B2C product portfolio and make strategic investments, including our stake in Omaze.”

Looking ahead, the Group has turned its focus to the roll out of a social lottery in the Netherlands under its Lottovate license. The offer is expected to go live in the fourth quarter of 2017.

ZEAL’s strategic outlook for 2017 remains unchanged with total operating performance expected to achieve between Euro 130-140 million and consolidated EBIT of between Euro 15-25 million.

Lotto24 In The Black For The First Time

Passes break-even point in EBIT and net profit

German-state-licensed online lottery provider Lotto24 AG has passed the break-even point in terms of EBIT and net profit for the first time, a recent H1/2017 fiscal update reports.

Lotto24 took a major step towards achieving its goal of sustainable and profitable growth reporting a 33.4 percent increase in billings to reach Euro 112.8 million and a 40.6 percent increase in revenues which amounted to Euro 13 million (H1/2016: Euro 9.2 million).

In the second quarter of 2017, billings and revenues grew year on year by 26.7 percent to reach Euro 54.6 million (Q2/2016: Euro 43.1 million) and by 31.3 percent to Euro 6.3 million (Q2/2016: Euro 4.8 million), respectively.

The operator reported growth in registered customers of 36.3 percent to reach 1.4 million (H1/2016: 1 million).

“Thanks to efficient marketing measures – which we tailor to the prevailing jackpot trend – we were able to reduce cost per lead (CPL) from Euro 28.73 to Euro 25.13 in the first half of 2017,” Petra von Strombeck, chief executive officer of Lotto24 AG, said. In the second quarter, CPL fell to reach Euro 26.64 (H1/2017: Euro 33.82).

The revenue trend and reduction in marketing expenditure from Euro 5.0 million to Euro 4.0 million led to the first-ever positive figures for both EBIT – Euro 0.4 million (H1/2016: Euro -3.4 million) – and net profit of Euro 0.6 million (H1/2016: Euro -1.4 million).

“Following the positive development of business in the first half of 2017, we are well on track to reach our targets again,” von Strombeck concluded.

Pogos Prove To Be Bad News For Leisure And Resorts World Corp.

Group revenue down 11.5 percent in Q2-2017, with the Cagayan subsidiary seeing a year-on-year plunge in revenues of 74.6 percent

The advent of Philippine Offshore Gaming Operator licenses from Pagcor, and its impact on the licensing business of Leisure and Gaming World subsidiary First Cagayan Leisure and Resorts Corp was illustrated this week when Leisure and Gaming posted its Q2-2017 results, reporting a group overall y-o-y decrease in revenue of 11.5 percent at PHP 2.53 billion (US$49.4 million).

Net income was down y-o-y 71.3 percent at PHP 89.5 million, the group reported, noting that the decline in Cagayan business and a decrease in electronic bingo revenues were mainly responsible for the lack lustre performance.

Cagayan generated net income of PHP 15.6 million in Q2-2017, compared to PHP 218.3 million in year-on-year terms. The subsidiary generated PHP 120.9 million in gross revenues for the second quarter of 2017, representing a 74.6 percent year-on-year decrease as its licensees roster dropped from 116 to 88.

Jackpot Joy Contains Losses In Second Quarter

But H1-2017 losses continue to mount

Online bingo operator Jackpot Joy plc (formerly the Canadian operator Intertain) has posted its Q2 and H1 results for 2017, reporting rising revenues but increased H1 losses.

Q2-2017 highlights include:

* Revenue grew 17 percent to GBP 75.2 million, with 70 percent of that coming from Jackpot Joy operations;

* Adjusted EBITDA up 28 percent, or 31 percent on a like for like constant currency basis, to GBP 30 million reflecting strong growth across all business segments;

* Adjusted net income up 14 percent year on year at GBP 21,8 million;

* Operating cash flow growth of 21 percent year on year to GBP 22.3 million;

* Gross debt including earn-outs reduced from GBP 514.8 million at 31 December 2016 to GBP 414.5 million;

* Net loss of GBP 4.8 million (- GBP 14.9 million);

* 240,000 active players.

Highlights of the half-year:

* Revenue up 13 percent at GBP 146.6 million;

* Net loss worse by 105 percent at -GBP 20 million (-GBP9.8 million);

* Adjusted EBITDA up 15 percent at GBP 59.2 million;

* Adjusted net income flat at GBP 42.6 million;

* Operating cash flow up 2 percent at GBP 45.6 million.

CEO Andrew McIver said in his report that the company expects “robust” growth in the second half of the year, enabling it to meet forecast.

“A major milestone in debt reduction was achieved in June when we made the final earn-out payment of GBP 94.2 million for the non-Spanish assets within the Jackpotjoy segment, using existing cash resources, with the total consideration representing excellent value for shareholders,” he said.

LeoVegas Deliver Robust H1-2017 Results

Mobile focused gambling operator LeoVegas has delivered a robust performance in its H1-2017 fiscal report

Key performance indicators for the six month period ending June 30, 2017 include:

– Consolidated revenue amounted to Euro 93.6 million (H1/2016: Euro 60.5 million), an increase of 55 percent.

– Mobile deposits accounted for 67 percent (H1/2016: 64 percent) of total deposits.

– Gross profit increased 55 percent to Euro 71.9 million (H1/2016: Euro 46.2 million).

– Gross margin was 76.8 percent (H1/2016: 76.4 percent).

– Marketing costs as a share of revenue decreased to 42.3 percent (H1/2016: 51.6 percent).

– EBITDA increased to Euro 12.2 million (H1/2016: Euro -3.8 million), and EBITDA margin was 13.0 percent (H1/2016: -6.2 percent).

– EBIT increased to Euro 11.0 million (H1/2016: Euro -4.3 million), for an operating margin of 11.7 percent (H1/2016: -7.2 percent) – impacted by costs associated with Nasdaq First North Premier listing, sport and live casino launches, and the acquisition of Winga.

– Profit increased to Euro 10.2 million (H1/2016: Euro 4.5 million).

Strong trading continues with LeoVegas reporting Net Gaming Revenues up 42 percent in July.

Rank Group FY Profits Fall 7 Percent

Blames lacklustre performance of retail wing in a “challenging environment”

Shares in the UK land and online gambling group Rank Group plc fell almost 4 percent Thursday morning following the release of the company’s full year results, which reported a 7 percent year-on-year fall in profits.

The company blamed the fall on a challenging UK retail environment and exceptional items.

Statutory pre-tax profit in the year to 30 June 2017 fell to GBP 79.7 million (FY 2016: GBP 85.5 million), adversely impacted by the underperformance of Grosvenor Casino chains in Southend and Plymouth, the disposal of a Mecca site at Bradford and the restructuring of UK retail operations.

Revenue fell to GBP 707.2 million from GBP 708.5 million due to a “challenging UK retail environment”.

However, the company’s digital operations bucked the downward trend experienced in retail, achieving a 12 percent y-o-y growth in revenue.

Rank reported that it had undertaken a comprehensive review of its cost base with a particular focus on labour following the introduction of the National Living Wage in April 2016. Following this, the company decided to reduce front-line labour hours, change its remuneration structure, cut management roles at club level and to simplify its organisational structure.

On the back of these actions, employment costs still rose 2 percent on pay rises and an increase in the minimum wage.

CEO Henry Birch said the new financial year has started well, and revealed that Rank has put in place a number of digital, product and venue-based initiatives which are expected to drive top line revenues in the year ahead.

The company raised its dividend by 12 percent to 7.30p as it cut net debt by 70 percent to GBP 12.4 million and delivered a 6 percent increase in cash generated from continuing operations to GBP 116.3 million.

Australia’s Sportsbet Posts Impressive H1 Numbers

Online bookmaker’s revenue and customer numbers best those of Tabcorp and other competitors

Paddy Power Betfair’s Australian bookmaking subsidiary Sportsbet has posted impressive H1-2017 numbers that show the company’s performance in revenue and customer growth is ahead of competitors like Tabcorp.

The Australian Financial Review reports that Sportsbet’s underlying operating profit in the six months to June hit GBP 46 million from almost GBP 1.7 billion staked via its digital wagering services and call centre, and the company’s active customers in Oz rose 13 percent to 688,000, compared to the 475,000 customers Tabcorp revealed in its full 2017 financial results last week.