ZEAL significantly improves earnings in the first quarter of 2015

May 13, 2015 7:29 AM

ZEAL Network SE / Key word(s): Quarter Results

2015-05-13 / 07:29


  • Revenue up 13 percent to EUR 34.9 million
  • Remarkable EBIT increase from EUR 1.3 million to EUR 14.1 million
  • Net profit for the period jumps to 9.5 million
  • New dividend policy implemented by first quarterly dividend pay-out of 0.70 per share

(London, 13 May 2015) ZEAL Network SE enjoyed an excellent start to the year with a solid revenue development and significantly improved profitability. Lower jackpot pay-outs than statistically expected and decreased operating expenses had a favourable impact on first quarter results. Under the revised dividend policy adopted on 25 March 2015, the company paid out its first interim dividend of EUR 0.70 per share on 31 March 2015, which was in line with the plan to pay out total dividends of at least EUR 2.80 per share in the current year.

Dr Hans Cornehl, Chief Executive Officer of ZEAL: "Our strong first quarter results confirm our positive outlook for the full year. Having laid the foundation for further growth in 2014, we are making good progress with our various business initiatives. With its three strategic business areas, ZEAL is well positioned to capitalise on opportunities in our target markets in Europe and North America. The payment of our first interim dividend for 2015 also underpins our commitment to attractive shareholder returns."

ZEAL increased consolidated revenue by 13 percent to EUR 34.9 million (prior year: EUR 30.8 million) in the first quarter of 2015. Adjusted for statistical deviations from the expected level of pay-outs, consolidated revenue amounted to EUR 32.1 million (previous year: EUR 36.5 million).

EBIT rose significantly to EUR 14.1 million (prior year: EUR 1.3 million). This translated into an EBIT margin of 40.4 percent, up from 4.1 percent in the first quarter of 2014.

Total pay-outs for secondary lotteries in the first three months of 2015 were EUR 2.8 million below the statistically expected pay-out value, in contrast to a comparable figure of EUR 5.6 million above the expected pay-out value in the prior-year period.

ZEAL also managed to considerably decrease its operating expenses to EUR 19.0 million, down 31.8 percent from EUR 27.9 million year-on-year. This was mainly due to lower marketing expenses, a decrease in gaming duty and a decrease in hedging transactions of MyLotto24 Limited.

Consolidated net profit for the period increased considerably to EUR 9.5 million (prior year: EUR 0.1 Million) on the back of the improved operating profit and a significantly lower consolidated tax rate. Earnings per share rose to EUR 1.13 after EUR 0.02 in the first quarter of 2014.

On 25 March 2015, ZEAL decided upon a revised dividend policy under which the company will pay regular interim dividends, which are expected to amount to a total of at least EUR 2.80 per share in the current year. Interim dividends are expected to be paid in four instalments in 2015. On 31 March 2015 the first interim dividend of EUR 0.70 per share was paid out to the shareholders of the company.

Driven by the positive development of the operating result, cash flow from operating activities was up 20.6 percent to EUR 10.8 million (prior year: EUR 9.0 million). As of March 31, 2015 cash and pledged cash and short-term financial assets amounted to 113.0 million (31.12.2014: EUR 108.1 million). The company continues to enjoy a solid financial position which enables it to pursue the growth initiatives based on its corporate strategy.

Outlook for 2015 confirmed

The outlook for the current fiscal year 2015 remains positive. ZEAL reiterates its expectation to generate consolidated revenues of EUR 135 to EUR 145 million and to increase consolidated EBIT to between EUR 35 and EUR 45 million. The stated ranges for revenue and earnings take into account statistical fluctuations in pay-outs for the secondary lottery business.

Selected Financials:

    Q1 2015 Q1 2014
Revenue EUR '000 34,902 30,810
EBIT EUR '000 14,097 1,253
Net profit EUR '000 9,459 109
Earnings/share EUR 1.13 0.01

Press contact:
ZEAL Network SE
Press office
Tel.: +44 (0)20 3739-7000
E-Mail: media@zeal-network.co.uk
Internet: www.zeal-network.co.uk

About ZEAL Network SE:
ZEAL is a holding company specialized in the area of online lottery. We offer consumer facing lottery-based games as well as business to business solutions. Our vision is to create a better world of lottery.

ZEAL Network SE is a London based company, founded in Germany in 1999 as Tipp24 SE. In November 2014, the company was renamed in today's ZEAL Network SE. Its shares are listed on the Prime Standard of the Frankfurt Stock Exchange and are included in the SDAX index. To the current day ZEAL has generated stakes of 2.5 billion euros and thus contributed over 650 million euros in taxes and duties.

ZEAL holds equity interests in businesses running under the following brands: Lottovate offers digital services to licenced lottery operators around the world (www.lottovate.com). Lotto Network enables private business partners to host their own branded lotto product (www.lottonetwork.com). Geolotto is an innovative geographical based lotto game in the UK (www.geolotto.co.uk). Ventura24 is a lottery ticket broker in Spain (www.ventura24.es). Tipp24 offers consumer facing secondary lottery products (www.tipp24.com).

2015-05-13 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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