IZI Group forecasts 2023 revenue to top €77million, up from €32 million
The group is expected to register an operating profit of €2.2 million and is projecting a net loss for FY2023 of €0.3 million
by Paul Cocks
IZI Group plc, owners of the Dragonara Casino, the IZIBet gaming parlours and - as of 5 July 2022 - operators of the lotto, Super 5 and national lottery, is predicting revenue will top €77 million in 2023, up from €32 million in 2022.
The group attributes the increase mostly to the commencement of the operation of the National Lottery of Malta.
EBITDA in 2023 is projected to be €17.8 million, which is more than double the EBITDA of FY2022. The group is also forecasting a higher depreciation and amortisation for FY2023 due to the recent heavy investment required for the national lottery.
The group is expected to register an operating profit of €2.2 million and is projecting a net loss for FY2023 of €0.3 million.
In 2022, the group converted a loss of €1 million in FY2021 to a profit of €0.6 million.
The group’s performance pivots on its four core strategic key areas: the ability of the Group to accelerate the growth and implementation plan of the National Lottery; the sustained growth at the Dragonara Casino; positioning IZIBET as the sports betting brand of the National Lottery; and further deployment of electronic gaming machines (EGMs) across the retail network.
On July 5, 2022, the group successfully launched the National Lottery operation having taken over the operations from Maltco Lotteries who had operated the lottery for the previous 18 years.
The impact of the National Lottery on the group’s financial performance has been considerable and has delivered unprecedented growth.
But despite the successful transition, the national lottery operation poses several challenges, principally those related to the implementation of the distribution plan.
Over the past six months of operation, National Lottery p.l.c. has encountered longer than expected lead times in the implementation of the distribution plan, translating into delays in bringing on stream the projected number of primary distribution network outlets; activating the National Lottery Secondary Distribution Network; the projected launch date of the National Lottery e-commerce site; the projected launch date of ScratchIZ (the brand name of the Scratch Card product); and the expected deployment of EGMs across the distribution network.
Nevertheless, it is anticipated that this shortfall will be entirely recovered within the subsequent financial years due to the accelerated implementation that should take place in the second half of 2023.
The weaker than expected performance brought about by the aforementioned delays in the National Lottery has been mitigated by the superior performance of the Dragonara Casino and Sports Betting verticals respectively.
The accelerated overall recovery of the land-based casino in 2022 and the ability of Dragonara Casino to retain strong market share in the sector, have allowed the casino to attain considerable growth.
With regards to sports betting, the deployment of new technology in National Lottery shops has impacted positively the revenues generated by these shops, outperforming the initial projections.
As more Self-Service Betting Terminals (SSBTs) are deployed in the market the expectations are that sports betting revenues will continue to grow and outperform projections.
Assets
IZI Group's major assets include:
Goodwill – primarily consisting of goodwill recognised upon business combination following the corporate restructuring undertaken in December 2021;
Intangible assets - comprising of: (1) Government concessions to manage and operate the National Lottery of Malta and the Dragonara casino; (2) the fair value of trademarks and domains; and (3) software,
Property, plant, and equipment – comprising improvements to leased properties, gaming equipment, office and computer equipment, furniture, electrical and sanitary fittings, works in progress and motor vehicles,
Right of use assets - comprising the leases related to the rented properties as well as the sub-emphyteusis held over the property comprising the Dragonara Casino; and
Cash and cash equivalents – reflecting the Group’s cash reserves as of 30 June 2022 after the successful finalisation of the public bond issue.
