Good half-year results from Tipp24

The international online gambling company Tipp24 has once again delivered a sterling set of half-yearly results, posting a rise in revenues of over 70 percent in the first six months of 2011.
Chief executive Dr. Hans Cornehl also gave investors reason to hope for even better days with his comment that changes to the presently monopolised German market may be in prospect, making it possible for the company to return to this lucrative opportunity at some point in the future.
The company’s results included:
* Consolidated revenue up by over 70 percent to Euro 70.1 million
* Consolidated EBIT up by factor of five to Euro 33.8 million
* Favourable statistics and litigation settlement drive a significant leap in growth
Management reported that following record earnings in fiscal 2010 and a very good first quarter, Tipp 24 SE continued to improve in the second quarter of 2011.
In the first six months of 2011, consolidated revenue rose by 72.4 percent to Euro 70.1 (prior year: 40.6) million – with the company’s international segment once again contributing the lion´s share.
Consolidated EBIT reached Euro 33.5 (6.5) million with a rise in the EBIT margin from 16.1 to 47.8 percent. This growth in EBIT by a factor of over five resulted mainly from a more favourable payout statistic compared to last year, as well as from the settlement of a legal dispute of MyLotto24
Limited concerning the payment of an insurance amount.
International revenue rose to Euro 69.8 (40.3) million, while EBIT improved to Euro 38.3 (10.0) million in the first six months.
Key factors for business in the German activities of the group were the significant regulatory restrictions imposed on lottery activities as well as start-up losses in the Skill-Based Games division.
Revenue in Germany reached Euro 1.8 (1.6) million in the period under review, while EBIT amounted to Euro -3.8 (-4.0) million.
The report notes that the European Commission has issued a statement on the gambling reform proposals of 15 of Germany’s federal states which could result in sweeping changes to the current draft of a new State Treaty on Games of Chance
In its ´Detailed Opinion´, the Commission criticised the restrictions contained in the draft, noting that the Commission could not detect any ´coherent and systematic limitation´ and that the current draft failed to provide adequate reasoning. The federal states involved were advised ´not to accept´ the draft in its current form.
Dr. Cornehl, wrote: “The Commission´s unequivocal criticism forces the states to substantially improve the proposed restrictions – such as the lack of permission criteria for the brokerage and marketing of lotteries.
“We continue to appeal to Germany´s political leaders to develop EU-compliant legislation which takes into account that there is simply no such thing as lottery addiction. Following the necessary legal amendments, Tipp24 is prepared to resume its activities in Germany with immediate effect.”
Management upgraded the company’s forecast for the full year, predicting consolidated EBIT in fiscal year 2011 of Euro 40 million. Revenue is still expected to reach at least the prior-year level of Euro 104 million.
This forecast takes into consideration increased costs for re-establishing the business in Germany, estimated at around Euro 10 million.
Quarter comparison: Q2-2011 / Q2-2010 in thousands of Euros
2011                2010
Revenue                                        35,799              15,646
– Germany                                         832                 720
– Abroad                                       35,664              15,488
EBIT                                            22,238              -1,523
– Germany                                      -1,872              -2,175
– Abroad                                       24,674                 644
Net profit                                      15,774              -1,625
Half-year comparison: 2011 / 2010 in thousands of Euros.
2011                 2010
Revenue                                        70,073              40,636
– Germany                                       1,750               1,555
– Abroad                                        69,768              40,299
EBIT                                             33,522               6,540
– Germany                                      -3,807              -4,030
– Abroad                                        38,278              10,039
Net profit                                       23,329               3,699
Tipp24 SE holds equity interests in a number of companies in Spain, Italy and the UK, which enable participation in lottery-based games via the Internet, especially via the websites www.ventura24.es, www.giochi24.it, www.mylotto24.co.uk and www.tipp24.com.
In Germany, Tipp24 Entertainment GmbH operates the games platform www.tipp24games.de.

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