Zeal Network revenue up 35.2 per cent in Q1

Revenue was boosted by its lottery business in Germany.

Germany.- Zeal Network has reported revenue of €36.1m for the first quarter, a rise of 35.2 per cent year-on-year. Zeal attributed the growth to its core lottery business in Germany and the launch of its online games division in June 2023.

Revenue from the German business increased by 36.6 per cent to €34.7m, with lottery revenue up 28.5 per cent at €32m. The German online games business contributed €2.2m. Zeal said revenue here is expected to continue to grow after it gained a licence to publish 64 more online games. 

Revenue from outside of Germany was up by 9 per cent at €1.4m, mainly from ONCE in Spain. 

The company reported 320,000 new players in Q1, 124 per cent more than in Q1 of 2023. Pre-tax profit was €6.9m, up from €6.8m in 2023. However, its move to obtain 100 per cent of Lotto24 had a €14.2m tax impact, pushing net profit to €21.1m, a rise of 382.8 per cent.

Chief financial officer Sebastian Bielski said: “We made a very strong start to 2024 and were able to significantly accelerate our revenue growth, particularly in our core lottery brokerage business. We are particularly proud of the fact that we were able to achieve EBITDA slightly above the previous year’s level in the past quarter.

“This shows that our measures to acquire new customers are paying off very quickly. We are generating income across the entire breadth of our customer base.”

Zeal plans to acquire all outstanding shares in its Lotto24 subsidiary. It has entered deals to take its holding to 95.45 per cent, which would allow it to aim for the transfer of the shares of remaining minority shareholders.

“With the announced squeeze-out at Lotto24, we are also putting Zeal in the best possible position for the future and are leveraging further efficiency potential,” Bielski said.

Zeal Group reported full-year revenue of €116.1m for 2023, a rise of 10.4 per cent year-on-year in line with the results from H1. However, a rise in costs resulted in net profit falling by 17.5 per cent to €13.7m