Zeal revenue up 10.4% but net profit falls

Zeal Group plans to buy the remaining shares in Lotto24.
Zeal Group plans to buy the remaining shares in Lotto24.

Increased costs offset the rise in revenue for the online lottery operator.

Germany.- The online lottery operator Zeal Group has reported 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.

Player stakes, including brokerage stakes and associated VAT, rose 11.2 per cent. Revenue from the core lottery business climbed 7.6 per cent to €105.7m. Costs were up across all areas, with personnel expenses rising 19.6 per cent to $22.6m.

The company highlighted its launch of online games in Germany through Lotto24 and Tipp24 in June 2023. It said this contributed an extra €3m in revenue. For 2024, it plans to expand growth in this area and to launch new products in the charity lottery segment. It expects revenue to reach €140m to €150m and EBITDA between €38m and €42m.

Zeal CEO Helmut Becker said: “In 2023, we further expanded our position as market leader. We’re benefiting from our strong brands. Lotto24, for example, has developed into a winner’s factory, producing more record winners last year than any other lottery provider in Germany.

“Our strong top and bottom-line results and our market share, which has grown to 41.4%, show that we are on the right track. We are therefore looking to the future with determination and confidence.”

Chief financial officer Sebastian Bielski said: “The strong growth in our billings and revenue shows that we inspire our customers with our attractive and innovative product range. Our continuously growing customer base also proves that we have expanded our marketing activities in a targeted manner. 

“At the same time, our successful start in the online games business clearly shows that we are in a position to successfully develop new business areas.”

Zeal to buy remaining shares in Lotto24

Meanwhile, Zeal plans to purchase the remaining shares in Lotto24. It already holds 94.86 per cent of the B2C subsidiary and has reached agreements to buy a 0.59 per cent stake to take its holding to 95.45 per cent in the coming days. After this, it will seek approval to transfer the shares of remaining minority shareholders, providing cash compensation to shareholders.

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