Online gambling operator LeoVegas is restructuring its UK-facing operations and calling off plans to open a larger Malta office as the company looks to keep costs under control.
On Friday, the Stockholm-listed LeoVegas announced a series of ‘strategic measures in the UK and related cost initiatives’ that includes the previously mentioned plan to pull its Royal Panda online casino brand from the UK market as of today (31).
LeoVegas is also migrating its Rocket X online gambling brands to its main technical multi-brand platform Rhino. These brands – which include 21.co.uk, BetUK, Slot Boss and UK Casino – were acquired in 2018 via a deal for Intellectual Property & Software Limited, which was subsequently rebranded as Rocket X.
LeoVegas said its acquisitions expanded UK operations had been running on three separate platforms, resulting in “internal complexity.” The company unified its LeoVegas UK and Rocket X marketing efforts last year and the technical shift is the next logical step in the company’s streamlining efforts.
LeoVegas says its full-time payroll shrunk by around 100 bodies over the past year, and thus it has decided to cancel its deal to move into larger premises in Malta in 2021. The company says this will lighten the company’s annual expenses by around €1.7m.
In the long run, Leovegas believes all this restructuring will save the company around €3.7m per year. In the short term, the total restructuring costs will be around €6.1m, which will be reflected in the company’s Q4 2019 results (due February 14).
LeoVegas is also writing off around €10m in its Royal Panda investment. Royal Panda apparently operated at a loss in the UK during Q4 as revenue totalled a mere €1.1m. By contrast, LeoVegas’ other UK brands saw their Q4 revenue rise 15% on a sequential basis.
Investors liked what they heard, boosting the stock by nearly 5.5% by the end of Friday’s trading.
