German lottery provider Tipp24 has recorded record earnings for the financial year ended 31 December 2010. Consolidated revenue came in at €104.4 million (up 16.5% year-on-year), the first time the figure has gone over €100 million.
EBIT grew 31.3% to €30.3 million.
Tipp24 SE posted the best result in its history in fiscal year 2010. Consolidated revenue grew by 16.5% to €104.4 million (FY 2009: 89.6 million), and consolidated earnings before interest and taxes (EBIT) climbed 31.3% to €30.3 million (FY2009: 23.1 million).
Consolidated net profit rose to €19.6 million (2009: 17.5 million, and the company reported that available funds at the end of the year amounted to €90.9 million.
In August last year, Management downgraded its original forecast for consolidated revenue from €100 million to €90 million and for EBIT from €40 million to €20 million.
In the German company's 'Abroad' segment, there was strong growth in revenue to €103.7 million (2009: 88.5 million) and a corresponding rise in EBIT to €40.2 million (2009: €32.7 million).
German revenues reached €3.1 million, down slightly from last year's 3.3 million. As a result, EBIT declined to a loss of €8.8 million (2009: -€11.3 million)
Tipp24 SE Management said it had to bear considerable running costs in Germany, mainly for administration and legal advice. Earnings were also burdened by start-up losses in the Skill Based Games division.
Business activities in Germany are still heavily restricted by the State Treaty on Games of Chance (Glücksspiel-Staatsvertrag - GlüStV).
Dr. Hans Cornehl, CEO of Tipp24 SE, reported: "The Abroad segment once again more than compensated for the negative effects of the GlüStV in Germany during 2010.
"After being forced to discontinue our German business in 2009, the excellent overall development of business proves once more that Tipp24 is capable of generating reliable results in a frequently changing environment.
"In view of the current political signals, it appears realistic that we can soon return to the German market with a long-term perspective for the future.'
A company spokesman said that significant regulations enforced by the German State Treaty on Games of Chance are not applicable according to a ruling by the European Court of Justice. In September 2010, the ECJ had questioned Germany's monopoly regulations as they were neither coherent nor systematic.
The ECJ's doubts have since been confirmed by Germany's Federal Administrative Court and Federal Supreme Court. The verdicts of several recent principal proceedings in Germany have confirmed that as far as lotteries are concerned, in particular the obligation of brokers to seek permission from federal states, the prohibition of online gaming and the restriction and prohibition of advertising are all not applicable.
The country's federal states are currently discussing changes to the GlüStV; the Minister Presidents will convene again in April for an extraordinary conference, the spokesman noted.
Commenting on developments, Dr. Cornehl said: "The aim must be to create sensible and forward-looking conditions for the online brokerage of harmless lotteries, also on the Internet.
"A new, systematic and coherent State Treaty would mean that taxes and special-purpose duties which the German states have lost as a result of the current State Treaty, could finally be used once more for social and cultural institutions, as well as for popular sports. Tipp24 SE aims to make its own contribution again as soon as possible.
"Justifying the current lottery monopoly with the prevention of gambling addiction is neither credible nor necessary. There simply is no such thing as lottery addiction," said Dr. Cornehl.
"This was proven by an enquiry conducted by the Administrative Court of Halle, amongst others, which questioned all guardianship courts and around 100 addiction clinics in Germany with regard to the relevance of lotteries in gambling addiction.
Tipp24 posted an optimistic outlook for 2011, predicting that revenue and EBIT will reach at least the levels achieved in 2010. The forecast takes into consideration uncertainties regarding negative statistical fluctuations and increased costs for re-establishing business in Germany of up to €10 million.
Source: InfoPowa News