How Zeal beat big jackpot pay-outs

How Zeal beat big jackpot pay-outs

Thursday, November 19, 2015 Totally Gaming
Sebastian Blohm described a period of "strong earnings growth"

Online lottery operator Zeal said operational improvements and a robust hedging mechanism helped the company cope with “exceptionally high” pay-outs in the first nine months of the year.

Sebastian Blohm, the company’s global head of corporate and legal affairs, told TotallyGaming.com that a reduction in operating expenses - such as UK tax liability - and income from hedging instruments helped Zeal overcome two jackpot wins at MyLotto24 of a combined €62.9m ($67.4m) earlier this year.

In a trading update covering the year to September 30, Zeal – formerly Tipp24 – said that earnings before interest and tax (EBIT) was up from €11.1m to €20.7m on a year-on-year basis, while net profit was up from €1.1m to €8.2m.

“Within the first nine month, Zeal reported strong earnings growth against the backdrop of a robust underlying performance,” Blohm said. 

“Although we saw two exceptionally high and above statistical average prize pay-outs, EBIT grew 85.8 per cent during the period.

Two above statistical average high prize pay-outs of €47.9m in May and €15.0m in September affected the group’s results.

“While statistical fluctuations like these are inherent to the secondary lottery business model, our hedging mechanism is working well and has proven to be sufficient for very large jackpot pay-outs.”

Zeal said that its UK tax bill was down €14.2m due to the Point of Consumption tax, continuing a trend reported by TotallyGaming.com earlier this year, with overall operating expenses falling from €77.5m to €47.7m.

Blohm added that the company will continue to look for new growth opportunities in the coming year.

“Strong EBIT and net profit growth demonstrates the strength of the business model," he said. "Additionally, Zeal is pursuing attractive opportunities in the company’s target markets, further driving profitable growth.”
 

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