LeoVegas delays financial goals until 2021.
The stock market-listed online casino company LeoVegas, based in Stockholm, Sweden, has delayed its financial objectives for the 2019-2020 financial year and moved them to 2021. The organization faces several fresh obstacles in the UK market, as stated in a management statement.
In spite of a promising beginning in 2019 – wherein income increased by 16% to 28.7 million euros in January – the Malta-licensed internet casino operator, LeoVegas, has officially scrapped its intended expansion targets for 2020 and re-scheduled them for 2021. It has attributed this decision to a number of "unresolved issues" that arose in the previous year. Nevertheless, the corporation will maintain its publicized strategic plan, with the financial objectives in raw numbers reaching a revenue of €600 million and an EBITDA of €100 million by the end of 2021.
During the announcement, CEO Gustaf Hagman characterized 2018 as "the most challenging year in LeoVegas' history." Even though the company recorded a 25% rise in Q4 revenue to €84.5 million and an upsurge in gross revenue, it registered a downturn in the intended operating profit.
A slew of new market and regulatory obstacles has interfered with the implementation of "strategically vital projects" and has also influenced the balance sheet. Consequently, the LeoVegas stock price experienced a 2.8% fall. Managing Director Hagman, however, remained positive considering the circumstances, asserting:
"We ran into problems that we hadn't encountered previously. This resulted in a slowdown in growth. There's still a lot of work to be done and there's no doubt that we can and will enhance in many areas. We've learned a lot and are in a great position to attain our long-term vision of being the global leader in the mobile casino industry."
Significant Revenue Market: Sweden
The most recent financial analysis supports Hagman's optimism: overall, the operator's revenue surged by a hefty 51% to €327.8 million in 2018. Organic growth, which remained steady at 7% in the closing three months of the year, can be partly attributed to the aforementioned slowdown in the UK. Organic growth, disregarding the UK, surged by 14%. December was the most robust month in this grouping.
The dominant contribution to LeoVegas' turnover arose from its native market in Sweden: it generated nearly 77% of all revenue in the final quarter of the year. It's apparent that the Swedish market, which has been regulated starting from the beginning of 2019, is also a significant focus for CEO Hagman. In a recent remark, he declared in this regard:
"We're the most popular brand in our home market of Sweden, where we're well-entrenched with our own technologies. We've made significant progress in terms of responsible gaming and compliance. We plan to launch new online casino brands."
Marketplace Expansion through Acquisitions
The British marketing business Rocket X, acquired in March 2018 and generating €32.7 million in revenue, constitute more than 10% of total revenue in Q4 2018, is another pillar of income. Alongside this, the online casino Royal Panda, procured in November 2017, registered a 13% increase in revenue in the last three months of last year.
In the final quarter, the NGR (net gaming revenue) advanced by 21% year-on-year and by 5% sequentially between Q3 and Q4. The NGR growth curve, though, was somewhat lower than in the deposit client segment, which, according to the company's press release, was stimulated by a lower hold and a lower gaming margin in the contrastive periods.
In the primary business sector, traditional casino gaming accounted for 77% of the entire gross gaming revenue in Q4. Live casino revenue grew by 14%. Meanwhile, the sports betting segment grew by a total of 9%.
New Head of Compliance since December
As a part of its global expansion, LeoVegas appointed Avshalom Lazar as the new Head of Compliance and Legal Officer in mid-December. Lazar will hence ensure that all legal requirements and trading regulations are rigorously complied with in all regulated LeoVegas markets.
The former Fortuna Entertainment employee will assume his new position from April 2019, according to the press release. Lazar has vast experience in the legal and regulatory field: in addition to his tenure with the Eastern European company Fortuna, he has also worked for the global online giant 888. Lazar's appointment seems especially salient for LeoVegas in the context of the newly regulated Swedish market.
At this juncture, CEO Hagman doesn't perceive adherence to regulatory guidelines as a hindrance but as a competitive edge over the competition. Hence, these standards must be "implemented concurrently" to achieve sustainable growth, according to the CEO's concluding aphorism.
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Source: www.onlinecasinosdeutschland.com
