Tipp24 Cuts Earnings Estimate, Shares Fall on Jackpot Win25th September 2009 8:03 am GMT
Online lottery betting provider Tipp24.com said Thursday that one of its customers in the United Kingdom had hit the jackpot on the German lottery, winning €31.7 million, the UK's largest online jackpot win. The announcement however wiped more than €23 million from the company's market capitalisation as investors reacted to its impact on 2009 earnings.
The player correctly predicted all six numbers for the German lottery as well as the bonus number to win what Tipp24 Services Ltd. Managing Director Ulf Teuber called "the highest jackpot prize ever won online in the United Kingdom".
"We are very happy for our customer," said Teuber.
Less happy however were Tipp24 shareholders who were warned that the record payout would result in a €10 million reduction in the company's estimated earnings before interest and tax (EBIT) for 2009 to €30 million.
The company said the impact of the win could have been worse, were it not for its risk hedging efforts which successfully minimised exposure.
Following Tipp24's withdrawal from the German market following enactment of the State Treaty on Gaming, the company ended its lottery brokerage activities and instead enables players to place bets on the outcome of lottery draws.
News of the jackpot win and its impact on earnings caused shares in Tipp24.com (Co. Profile) (TIM.DE) to fall by 16% on Thursday before recovering to close at €23.65, down 9% on the day. In early trading Friday, Tipp24 shares are currently down a further 3.72% in Frankfurt at €22.77.