Zeal ups earnings forecast after strong finish to 2018

Lottery brokerage Zeal Network has increased its profit guidance for the 2018 financial year to between €37m (£32.3m/$42.3m) and €39m, as a result of the business' a strong performance in November and December.

Zeal projected full-year earnings before interest and tax (EBIT) of between €33m and €38m, but a strong end to the year, coupled with the absence of remaining prize pay-out risks for the financial year, means that it revised its forecasts.

The brokerage has also stated that its total operating performance for the year will come in between €158m and €160m, though it noted that this does not form part of its profit estimate.

Zeal, which is due to present it 2018 financial year results on March 22, said the profit guidance is subject to change and adjustments may be made to the figures prior to the final publication date.

The updated financial guidance comes as Zeal works on finalising its acquisition of Lotto24. The brokerage plans to reform with its former subsidiary and create a lottery brokerage giant with billings of around €500m and customer footprint of some five million.

However, the deal has not been without controversy, with lottery betting operator and Zeal shareholder Lottoland attacking the move, accusing Zeal of only acting in the interests of certain shareholders.

Lottoland first called for a scheduled shareholder meeting to vote on the deal to be postponed – something that Zeal said would force it to withdraw its offer for Lotto24 – and then lodged a €76m bid for Zeal’s Tipp24 business.

However, Zeal rejected the offer, saying it significantly undervalued its German business and would strip the company of its most valuable asset. Zeal also went ahead with the meeting, with 60% of its shareholders voting in favour of the Lotto24 acquisition.