Unibet expects marketing costs to pay off

Unibet expects marketing costs to pay off

Thursday, April 30, 2015 Totally Gaming
Unibet has spent big on marketing in Q1

Unibet chief executive Henrik Tjärnström says he is convinced the gambling company's high marketing costs will pay dividends in the long term.

Unibet has seen a drop in its major financial key indicators in Q1 2015, with gross winnings revenue at £76.1m (€105.1m/$117.4m) compared to £76.6m a year ago.

The company also reported that earnings before interest, tax, depreciation and amortisation fell from £21.3m in the first quarter of 2014 to £14.4m this year, while profit before tax was down from £16.5m to £11.3m and gross profits slumped from £15.3m to £10m.

However, in its quarterly report, the company noted that operating costs were £37.9m, of which marketing made up £18.9m, compared to £16m in the corresponding period in 2014. The company hopes that these costs will soon help it to push back into growth.

"During the first quarter Unibet has continued to focus on marketing to build on the success achieved in 2014,"  Tjärnström  said.

"This has been reflected in all-time highs in customer deposits - up 12 per cent in GBP and 25 per cent in constant currency - sports betting turnover - up 17 per cent in GBP and 30% in constant currency - and also active customers reached a new ATH and even surpassed the impressive activity levels achieved during last year’s World Cup in football."

Unibet was also keen to show that its figures were negatively affected by the fluctuating exchange rate between Swedish and British currency, while indicators relating to customer activity were also up.

It noted that if it reported results in Swedish Krona, gross winnings revenue for the quarter would have amounted to SEK 960.1m (€103.5m/$115.5m), which was a rise of more than 17% year-on-year.

In Q1 2015, the number of active customers amounted to 612,269 compared with 570,360 for
the fourth quarter of 2014 and 552,338 in Q1 2014. The total number of registered customers has also continued to increase, exceeding 10 million at March 31, 2015 compared to 8.9 million a year ago.

Tjärnström added: "As we know, it takes some time for increased customer activity to flow through into gross winnings revenue, so the higher marketing investment and lower margins in the quarter had a short-term impact on the reported result.”


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