LeoVegas AB has detailed a tough closing period to 2019 trading, in which significant Q4 exceptional costs have impacted the firm’s full-year performance.
Updating investors, the operator explained that it has booked €6 million attributed to restructuring costs, on top of a €10 million Royal Panda impairment charge.
The expenses see LeoVegas post Q4 2019 operating losses of €2.5 million (Q42018: €2.6m), despite the company maintaining improved revenues of €87 million (Q42018: €84m).
LeoVegas added that the operating period saw the company move to reduce ‘group complexities’ in reaction to changing regulatory circumstances across key markets.
“2019 was a year characterised by change in our industry, with external challenges coupled to higher demands for compliance, higher gambling taxes and uncertainty surrounding future regulation,” said Gustaf Hagman, Group CEO of LeoVegas AB.
Q4 costs weighed down on LeoVegas’ full-year 2019 operating profits (EBIT) to €12.7 million, down 33% on the corresponding FY2018’s €19 million.
Despite this EBIT setback, LeoVegas governance pointed to strong operating metrics recorded during 2019, with group revenues up 9% to €356 million (FY2018: €328m).
The Stockholm enterprise also maintained a positive group EBITDA at €50 million (FY2018: €41m) after navigating a year of tough regulatory adjustments across multiple markets.
“A couple of weeks ago we communicated a number of strategic decisions coupled mainly to the UK and our ambitions to create a less complex and more scalable organisation,” said Hagman.
“These initiatives gave rise to one-off restructuring costs that affected fourth-quarter earnings by a total of EUR 6.1 m and are expected to lead to annual cost savings of approximately EUR 3.7m.
“The savings consist mainly of platform and product costs, a more efficient organisation and more optimized premises.”
Closing its statement, LeoVegas confirmed that the firm has removed its ‘2021 target’ of reaching sales of €600 million and EBITDA €100 million – choosing instead to assess future corporate performance on sustainability and long-term growth.