LeoVegas Q4 revenues up 7% after “most challenging” year in its history
Operator continues to stall in the UK due to stricter regulatory controls
LeoVegas this morning reported a 7%cc organic growth rate in Q4, as a weak performance in the UK market hampered the wider business.
The operator revealed Q4 revenues of €84.5m, up from the €67.8m reported during the fourth quarter of 2017, but boosted by currency fluctuations and acquisitions.
Addressing the slower growth, LeoVegas CEO Gustaf Hagman described 2018 as the most “challenging” year in LeoVegas’ history.
“We bumped into challenges that we have not previously encountered and saw a slowdown in growth as a result,” Hagman added.
Excluding the UK market, group organic growth in local currencies was 14%. The percentage of net gaming revenues (NGR) from regulated markets increased to 33% of total NGR during Q4, up from the 29% reported during the same period of 2017.
Analyst firm Regulus Partners was sceptical LeoVegas could continue to deliver growth in its Swedish and UK operations, writing this morning: “LeoVegas’ period of operational-driven growth is now much more challenging due to the group’s own success, greater sector maturity and the regulatory environment. Strong growth may still come from less mature or .com markets, though with very different operations management and regulatory risk profiles.”
The number of depositing customers increased 29% during Q4 to 327,156, while the number of returning depositing customers increased to 181,747 a rise of 46%. LeoVegas investment in marketing increased to 37.9% of NGR during the quarter, compared to the 35.6% during Q3 2018 as the business looked to strengthen its position in Sweden.
This increase contributed to an 18% growth spike in its fourth quarter Swedish revenues and a 28% year-on-year rise in depositing customer base in the Swedish market.
LeoVegas confirmed 16% growth in its revenues for January 2019, with revenues for the month amounting to €28.7m and a 42% growth in depositing customers when compared to January 2018.
Shares in the firm were down 2.8% in early trading.