LeoVegas AB has outlined a difficult closing period to trading in 2019, in which major exceptional Q4 costs have affected the overall performance of the company.
Updating creditors, the operator clarified that, in addition to a € 10 million Royal Panda impairment charge, it has booked € 6 million related to restructuring costs.
The expenditures see LeoVegas post Q4 2019 operating losses of € 2.5 million (Q42018: € 2.6 million), despite the company retaining a € 87 million increased turnover (Q42018: € 84 million).
LeoVegas added that the operating period saw the company shift in reaction to changing regulatory circumstances around key markets to the’ group complexities.’
Gustaf Hagman, Group CEO of LeoVegas AB said: “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.”
Q4 expenses weighed down to € 12.7 million on LeoVegas ‘ full-year operating profit (EBIT) for 2019, down 33 percent from € 19 million for the corresponding FY2018.
Notwithstanding this setback on the EBIT, LeoVegas governance pointed to strong operating metrics reported in 2019, with group revenues rising 9% to € 356 million (FY2018: € 328 million).
After a year of difficult regulatory changes across multiple markets, the Swedish company has preserved a healthy group EBITDA at € 50 million (FY2018: € 41 m).
Hagman added: “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.
“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 optimised premises.”
Closing its statement LeoVegas announced that the company has withdrawn its ‘ 2021 target ‘ of € 600 million in sales and € 100 million in EBITDA – instead opting to measure potential corporate performance in terms of profitability and long term growth.