In ENLABS main market, Latvia, the underlying historical Q/Q growth for the licensed market has been around 5% in the fourth quarter. We believe that the actions taken during Q3 and Q4 together with a strong momentum from the third quarter will lead to a stronger growth rate for ENLABS than the underlying market. However, the actions during Q4 will not have a significant effect until 2019.
The Optibet launch in Lithuania
At the beginning of October, ENLABS launched the Optibet brand in Lithuania. We expect that this will be a strong growth driver during 2019. We have also noted that the traffic on the Optibet.lt has increased rapidly to session levels not far from Optibet.lv on the Latvian market (Based on data from Similarweb.com and Rank2traffic.com). This is of course very impressive.
Nevertheless, at the start, the player values will be low. A large portion of the players will take welcome bonuses and test the site before they dedicate larger amounts. This is also somewhat reflected in the session data with quite low session duration and page views per session on the site. Therefore, we expect that the Lithuanian market only will have a minor effect on the net sales in Q4.
The Swedish license
ENLABS was granted a Swedish license in December. We believe that this license will be used to acquire a Swedish brand, probably within the next 9 months. As mentioned in an earlier note, it seems like Q1 2019 will be a tough quarter with decreased revenue, increased/maintained marketing and 18% gaming tax. This would lead to some interesting acquisition opportunities for ENLABS.
New financial targets for 2020
As already mentioned in October, ENLABS new financial targets for 2020 signals increased acquisition activity. In addition to Sweden, we believe that regulated eastern European markets could be interesting for ENLABS to enter through strategic acquisitions.
We expect that Q4 will be a strong quarter. However, we believe that 2019 will be the year when the revenue in Lithuania will take off, and the strong financial position will be utilized for value-adding acquisitions.
We will get back with a comment following the release of the report.
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