Allwyn reports “substantially lower profitability” for UK National Lottery since takeover
Pan-European lottery firm delivers Q1 trading update pointing to weaker performance since licence switch from Camelot in February after strong January
Allwyn has reported “substantially lower profitability” since taking over the UK National Lottery licence at the start of February, according to a brief Q1 trading update from the firm.
Allwyn officially replaced Camelot on 1 February 2024 having been awarded the licence by the Gambling Commission in 2022, but an ensuing legal battle between the two operators meant the Czech firm was delayed in taking on the fourth licence.
In Allwyn’s Q3 results last December, CFO Kenneth Morton said it was to be expected that the UK National Lottery would have a negative financial margin in the short term.
This was confirmed in the firm’s trading update yesterday, 20 May, alongside adjusted EBITDA expected to fall between €355m and €365m while gross gaming revenue (GGR) should amount to between €2bn and €2.05bn.
In comparison, Q1 2023 GGR amounted to €1.6bn and adjusted EBITDA came in at €346.7m.
The growth, according to bosses, should be attributed to strong performances in Austria and Czechia which will be offset by flat GGR in the UK, based on constant FX.
A statement read: “In the United Kingdom, the result reflected strong performance in January, which was the last month of the previous UK National Lottery licence, followed by substantially lower profitability in February and March, with the start of the next licence on 1 February 2024 and the introduction of a new incentive and profitability mechanism.
“CAPEX was €45m in Q1 2024, €20.5m higher year on year, with the increase relating to higher investment in the United Kingdom, in support of Allwyn’s plans to transform the UK National Lottery, with other segments’ CAPEX at a similar level to the prior year.”
Allwyn underwent a series of changes ahead of its lottery tenure, including naming a new CEO and CFO in Andria Vidler and Alan Artz, respectively, as well as Sir Keith Mills stepping down from the board at the end of January.
Sir Mills played a major role in the bid to win the licence and remains as chair of the board at Camelot UK until June, once its results are released.
Steve Parkinson was also appointed brand and marketing manager at the beginning of January, coming at a time when IGT were challenging the initial decision to award Allwyn with the licence – that case was dropped midway through January.
Allwyn will release its full Q1 results on 7 June.