Zeal Network has published its financial results for H1 of FY2021, reporting that its profitability has ‘significantly improved’.
The company’s EBITDA more than trebled in the last year to EUR 10.7m from EUR3.3m in H1 2020. The German market segment accounted for EUR 9.8m of the total EBITDA compared to EUR 1.5m in 2020. Total net profit for the company was also above H1 in 2020, rising from EUR 0.4m to EUR5.7m.
The improvement, said the firm, stems from billings, which rose by 6% to EUR 332.91m compared to the same period last year, and revenues, which increased by 2% to EUR 44.5m.
This comes despite a market which Zeal Network labelled ‘weak’. Jackpots were comparatively low compared to recent years, with the average German jackpot figure standing at EUR 9m compared to EUR 9.4m in 2020 H1. The jackpot in Germany only exceeded EUR 20m once compared to twice in 2020. Zeal claims that low jackpots negatively impact gross margins and customer acquisition.
However, the company still acquired 291,000 new registered customers in the German market, although the acquisition costs per customer did increase. This, Zeal claimed, was a consequence of its ‘enhanced marketing strategy, which takes the expected customer quality into account: higher CPLs in low jackpot phases are justified by the fact that it is precisely those lottery players won during these periods who generally exhibit higher long-term activity and thus a better customer lifetime value’.
CFO Jonas Mattson, commented: “The fact that we have managed to continue to grow with a significantly weaker jackpot development compared to the previous year makes us proud and shows us that we have taken the right measures to continuously improve both in terms of customers and results.
“The scalability of our business model will also help us in the future to take advantage of market opportunities, adapt to the dynamic environment and continuously optimise.”