Stockholm-listed online gambling group LeoVegas AB has detailed a positive opening to 2019 trading, as the company adjusts to new regulatory conditions within the UK and Sweden.
Publishing its Q1 2019 trading update (period ending 31 March), LeoVegas reports a 12% increase in corporate revenues to €86 million (Q12018: €77m), as the company records double-digit growth in customer metrics related to – ‘depositing players’ up 23% to 370,000 (Q12018: 300,000) and ‘returning customers’ up 26% to 196,000 (Q12018: 155,000).
“LeoVegas has had a good start to the year – customer loyalty and the inflow of new customers has never been better,” said Gustaf Hagman, Group CEO LeoVegas AB.
A marquee quarter would see LeoVegas begin its new services for the re-regulated Swedish online gambling marketplace, in which LeoVegas increased marketing investment to maintain its position as a leading brand.
In its update, the Stockholm enterprise details that it has undertaken wholesale changes in customer service, marketing adjustments, gaming duties and player management provisions to service Swedish customers.
Away from Sweden, LeoVegas details that the UK online gambling marketplace has become ‘challenging in the near term’, as the company adjusts to the ‘regulatory tightening’ which took place at the end of 2018.
Seeking to comply with new regulatory requirements, LeoVegas has implemented a new action plan, aligning operations, routines and processes for its UK acquired Rocket X and Royal Panda assets.
Pointing towards its earnings results, LeoVegas details that during the period gaming duties increased to €11.5 million, an increase of EUR 4.3 m compared with the preceding quarter, which impacted the firm’s operating margins.
Closing a busy Q1 2019 trading period, LeoVegas would post a group EBITDA of €7.2 million (Q12018: €9.5m), reflecting an EBITDA margin of 8.3% (12.3%).
“We are seeing positive effects from our highlighted focus on efficiency and cost control within the Group,” Hagman continued. “We continue to work on renegotiating supplier agreements in gaming, payments and marketing, among other areas, where we are benefiting from our size and position as one of Europe’s leading casino operators.
“At the same time, we are continuously reviewing our internal operating costs and processes. The effects of this work are expected to begin showing gradually in 2019 in the form of increased scalability on a growing revenue base.”