Betsson Q1 growth suffers as internal restructure continues

Betsson has reported a 10% rise in Q1 revenues to SEK 1210m (£101.5m), although operating income slipped 12% to SEK 211m (£17.7m).

Group CEO Pontus Lindwall said the figures for quarter were heavily impacted by betting duties and record-high gambling taxes, as well as negative contribution from recent acquisitions.

The period also saw a one off severance payout of SEK 15m (£1.3m) following staff cuts and other restructuring measures implemented during the quarter.

Sportsbook revenues were up 5% to SEK 263.5m (£22.1m) with the margin staying steady at 6.6%. Lindwall this morning told investors the figure was not far from the operator’s rolling average.

Sportsbook growth was buoyed by a 22% uptick in the Nordics which Lindwall attributed to Betsson offering additional markets and rolling out a new version of the sportsbook app back in Q3 2017.

Casino revenues increased 12% on last year to SEK 922m (£77.3m) with Lindwall pointing to slower-than-expected growth in the Nordics, similar to Kindred.

Elsewhere, revenues for Central and Eastern Europe & Central Asia (CEECA) declined 15% due to poor performance by the operator’s Turkey-facing B2B subsidiary Realm Entertainment.

“In the figures we have the [currency exchange] challenges but in the organic [figures] we also had some operational issues,” Lindwall told analysts this morning.

“But I’m still confident because when we look at the KPIs we get for Realm we still see some strong developments in terms of customer intakes and active clients so I don’t think this negative trend should continue.”

Despite cutting down on its UK sponsorships, marketing spend was up on the previous year as Betsson launched its first advertising campaign in Spain for its Betsson.es brand this week.

The firm continues to reshuffle its internal operations into Q2 and Lindwall said it will take time before it sees any material effects.

Betsson shares dipped 4% in early trading.