LeoVegas has reported a sharp year-on-year decline in profit for 2019 as a result of depreciation, amortisation and impairment charges, despite seeing consolidated revenue increase by 9%.
The company did not publish further details about its full-year revenue at this stage, but did give an insight into spending for the year. Marketing was the operator’s main outgoing, with costs amounting to €118.5m, though this was slightly lower than €120.8m in the previous year.
Personnel costs increased by 20.5% year-on-year from €41.0m to €49.4m, while other operating expenses were down from €41.2m to €34.5m.
Depreciation and amortisation costs jumped 108.2% to €10.2m and expenditure related to amortisation and impairment of acquire intangible assets, including goodwill, was up 52.6% to €26.7m. These charges pushed operating profit down from €19.2m in 2018 to €12.7m.
“During 2019 we worked hard to reduce complexity in the group, be more efficient and adapt to the changes taking place in the gaming industry,” LeoVegas CEO and president Gustaf Hagman said.
“In parallel with this we have enhanced the attraction of our product through new functionality and greater personalisation. We have launched new brands, focused more on Casino, and expanded to new markets. Towards the end of the year we intensified the integration of our previous acquisitions, which is expected to contribute to cost savings and increased economies of scale,” he added.
The Nordics were the main source of income for LeoVegas in Q4, accounting for 45% of total gross gaming revenue, ahead of the rest of Europe on 42% and the rest of the world on 13%.
“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,” Hagman said.
“These initiatives gave rise to one-off restructuring costs that affected fourth quarter earnings by a total of €6.1m and are expected to lead to annual cost savings of approximately €3.7m. As previously communicated, we are addressing the challenges in the UK by migrating all of our brands in the UK to our proprietary technical platform. In parallel with this we are refining our brand portfolio and closing Royal Panda in the UK," Hagman concluded.
However, he added, the measures would allow for a more focused and efficient operation, that would open up economies of scale within the group.
Source: GMB / iGaming Business
