Tombola revenue increases to £120 million despite COVID-19
Tombola, the British bingo operator, saw its revenue increasing by 15% up to £120 million (or $165 million) during the year that came to an end on the 30th of April 2020. However, its higher staffing costs meant that its profit decreased.
The year had approximately six weeks worth of lockdowns that meant bingo halls needed to close down in Europe and the UK, which are the bingo operator’s main markets.
The bingo operator’s cost of sales amounted to £85 million, a 19.7% which leaves a gross profit of about £34.7 million, an increase worth 4.3%. Tombola also ended up paying £22.7 million in administrative costs, a 10.8% increase, which mostly went towards, salaries, wages and staff costs which increased 13.3% to £15.3 million.
This meant that there was £12 million left in operating profit, which is a decrease of 6.7%. The operator also paid interest income, which had decreased by 87.2% down to £50,000, as well as interest expenses worth £33,000.
It also ended up paying an amount of £2.7 million in taxes, which has increased by 35.1%. Tombola’s tax bill came up to £3 million, however £330,000 of this amount was suspended. Tombola’s profit amounted to about £9.4 million after these costs were cut, which is a 16.6% decrease from the 2018-2019 period.
Regulus Partners, a gambling advisory firm, stated:
“While this model works extremely well for Tombola and it helps to ensure a safer gambling environment ‘by product’, it also speaks to the fact that the vast majority of addressable customer revenue, even in a ‘softer’ product range such as bingo, is driven by less restricted products. Tombola’s business model is therefore something of a litmus test for tough product restrictions in the UK and elsewhere: it might capture a lot of customers, but it does not capture much revenue.”