Allwyn to take ‘fresh look’ at National Lottery as UK sales flag
The Camelot business saw total revenues fall 3% on a comparable basis in the three months to June 30.
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The boss of incoming National Lottery owner Allwyn has said he is looking to reinvigorate the game as sales in Britain flag amid the cost-of-living crisis and ahead of the licence switchover next year.
Robert Chvatal, chief executive of the Czech company, said the UK had underperformed the rest of the group in the first six months of 2023, with consumer spending under pressure.
In the UK, the Camelot business saw total revenues fall 3% on a comparable and constant currency basis in the second quarter, although this was also down to “exceptional” EuroMillions rollovers a year earlier.
UK revenues grew 1% on a reported basis to 980.3 million euros (£838.8 million) in the three months to the end of June.
For 30 years, Camelot did it their way...this is a new brush opportunity to have a fresh look at how we can do it for the next 10 years
Mr Chvatal told the PA news agency the UK was the slowest growing division of the group, which also runs lotteries in Austria, Italy and Greece.
He said: “It’s a cost-of-living crisis, it’s also an expectation of what’s going to happen after licence four and the transition.
“That’s something we have to work on longer term.”
Mr Chvatal added that the UK business was “in a bit of a limbo now as we’re between licences”.
“For 30 years, Camelot did it their way… this is a new brush opportunity to have a fresh look at how we can do it for the next 10 years.
“By looking at it with a fresh pair of eyes, things could benefit.”
Allwyn is preparing to take over the running of the next National Lottery licence from February next year after winning the contract from Camelot last year.
Allwyn’s acquisition of Camelot closed a bitter legal wrangle between the firms after the Gambling Commission decision, although the two companies are continuing to operate separately.
The figures from Allwyn showed UK second-quarter underlying earnings lifted 18% to 50 million euros (£42.8 million), but Mr Chvatal said the group is keeping a focus on driving sales growth.
Overall, Allwyn saw turnover nearly double to 3.7 billion euros (£3.2 billion) for the six months to June 30, up from 1.9 billion euros (£1.6 billion) a year earlier.
Revenues in the second quarter jumped 115% higher to 2.05 billion euros (£1.8 billion), the group said.
Current trends are in line with the resilience of our revenues during previous periods of weaker general consumer sentiment
Its performance was boosted through the takeover of Camelot UK and Camelot Lottery Solutions, which runs the Illinois Lottery, in the first quarter of 2023.
With the newly acquired firm stripped out, Allwyn said revenues rose 12% in the first half to 2.1 billion euros (£1.8 billion) and were 7% higher over the second quarter.
Underlying earnings, excluding the Camelot businesses, rose 18% over the half-year to 649.8 million euros (£555.9 million).
The group said consumer confidence was being affected by the cost-of-living crisis but that its business overall saw “only a limited impact”.
It said demand remained resilient “due to the low price point of our products and low average spend per customer, as well as our large number of regular players”.
Allwyn also said its business has been shielded from much of the wider cost inflation, given that “a significant portion of our costs is directly linked to revenues and the low proportion of energy in our cost base”.
It added that trading since the end of June has continued to hold up, “despite a background of relatively weak general consumer sentiment”.
“Current trends are in line with the resilience of our revenues during previous periods of weaker general consumer sentiment – for example the early period of the Covid-19 pandemic, the Greek financial crisis and the global financial crisis – when demand for our products remained resilient, especially in comparison with other consumer sectors,” Allwyn said.