Diversified Zeal product portfolio drives “strong” Q1 results

Diversified Zeal product portfolio drives “strong” Q1 results

Thursday, May 10, 2018 Posted by Luke Massey
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Zeal has mixed new products with launches in the UK and Norway

Launching new products and in new markets contributed to a “strong” set of results for Zeal Group across the first three months of 2018.

The group, which is dedicated to creating exciting lottery experiences, reported EBIT of €9.2 million, a billings increase of 6.4% to €72.8 million, and total operating performance of €39.8 million.

Zeal confirmed that the EBIT growth to €9.2 million, aided by a Q4 2017 launch in UK and Norway, was also influenced by the lack of a huge jackpot win, given that there was a “life-changing” €15 million payout during the corresponding period of last year.

Meanwhile, the growth in billings was driven by the performance of new products such as Powerball, MegaMillions and Instant Win Games, which brought about higher customer engagement and subsequent spend shown by an increase in the average billings per user to €58.02.

In addition, continued investment in new products, markets and marketing delivered 140,000 new registered customers for the company and its partners, an increase of 59% year-on-year.

However, the news wasn’t so good for lottery betting platform providers targeting Australia, after legislation to ban so-called synthetic lotteries passed the lower house unopposed yesterday.

The Australian government has united with MP's over concerns that these products lure people away from traditional lotteries, and could lead to revenue losses for newsagents, pubs and clubs.

However, the opposition to this newly proposed legislation, which includes newsagents, has argued that international lotteries provide a complementary add-on to traditional Australian lotteries, that there is no evidence of any market cannibalisation, and that Australian Newsagents can benefit from a brand-new revenue stream.

Totally Gaming says: It has undoubtedly been a strong start to the year for Zeal, who effectively diversified its product portfolio to record impressive EBIT growth. However, it remains an interesting period for the group - Zeal holds a minority shareholding in myLotto24, who just last week countered the looming nationwide ban on international lottery services by announcing a partnership with 1,200 Nparcel Australian newsagents, which would see them receive a 12% commission on all initial in-store deposits, plus an additional 3% on every future top-up.

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