Online gambling operator LeoVegas had a “record strong” December to close out 2018, a year the company’s CEO called “the most challenged” in the company’s seven-year history.
On Tuesday, LeoVegas released its Q4 and full-year 2018 report card, which showed revenue rising one-quarter to €84.5m in the final three months of the year. Earnings were up nearly one-third to €8.1m as margins improved 0.6 points to 9.6%.
LeoVegas CEO Gustaf Hagman celebrated his company having returned to sequential growth in Q4 following a Q3 slowdown. October was the weakest month of the quarter, but the company enjoyed all-time high gambling turnover and record-high customer activity in December.
However, Q4’s organic growth in local currencies was a more modest 7%, thanks to “a weak development in the UK.” The company’s UK-facing brands faced some “technical problems” but made “gradual improvements in both revenues and key figures” during Q4 and these improvements continued into January. Celebrating a UK revival might be premature but Hagman remains confident in LeoVegas’ turnaround plan.
Excluding the UK market, organic growth was 14%, thanks to a particularly strong showing in Germany (where growth was “well above 200%”) and good results in Canada, Denmark and Finland.
LeoVegas’ overall revenue in January 2019 totaled €28.7m, a 16% improvement over the same month last year, while its depositing customer base is up 42%. The company, which recently celebrated its seventh birthday, has high hopes for the current year, during which it plans to launch its Spanish-licensed online gambling operation.
LeoVegas was among the first companies to receive licenses in Sweden’s newly regulated online gambling market. Hagman said the company saw its Swedish depositing customer base improve 28% in January, but Swedish revenue was “somewhat lower” due in part to new customers playing with welcome bonuses.
The Swedish slowdown was also blamed on “certain trimming challenges” in the first two weeks following the January 1 regulated market launch, as well as players “getting used to certain modifications in the gaming experience.”
Hagman’s caveat came the same day that fellow Swedes NetEnt reported their game-win down 5% in 2019, partly due to lower volumes in the new Swedish regulatory environment.
Hagman cautioned that it was “still difficult to fully predict” the new Swedish market’s short-term dynamics. As a result, LeoVegas is pushing out its financial targets of achieving €600m in revenue and €100m in earnings from 2020 to 2021.