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UK – Numbers come in for lottery group Zeal

By - 16 November 2015

Lottery group ZEAL Group performed solidly in the first nine months of 2015 and the growth strategy is progressing in line with plan.

Throughout the period the Group has expanded its product portfolio in the Business-to-Consumer segment and continues to make headway towards its strategic goals in the Business-to-Business/Business-to Government segment.

Dr. Helmut Becker, Chief Executive Officer, said: “ZEAL has achieved a robust profit increase in the first nine months of 2015, despite exceptionally high prize pay-outs. We are also gaining traction with new gaming product initiatives launched earlier this year that are driving an increased revenue per customer.”

During the period, the Group’s underlying business performance remained strong. ZEAL delivered EBIT growth of 85.8 per cent resulting from a reduction in operating expenses, income from hedging instruments and the benefit of exceptionally high jackpots that drove higher than average player involvement in July and September. This in turn mitigated the adverse EBIT impact of exceptionally high prize pay-outs in May and September. Correspondingly consolidated net profit for the period rose significantly to €8.2m from €1.1m in the previous year and EPS rose from €0.12 in 2014 to €0.97 in the current period.

As a result of the high prize pay-outs, consolidated revenue decreased to €51.9m (prior year: €105.4m) in the first nine months, whilst total operating performance was down by €17m to €91.9m. The Group uses total operating performance as a measure for top-line guidance in order to include income from hedging instruments. In the period total operating performance benefitted from hedging instruments income of €38.3m.

ZEAL reiterates its guidance from 2 September 2015. Assuming ordinary course of business in the last quarter, ZEAL expects total operating performance in the range of €120-130m and full year EBIT in the range of €20 to 30m.

The strategic outlook of the group remains unchanged with attractive growth opportunities in the company’s target markets. The group remains well positioned to capitalise on opportunities arising from changes to regulatory conditions and relatively low internet penetration of the lottery industry.

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