Published: February 28, 2023

Jumbo delivers continued revenue and earnings growth - Reaffirms FY23 outlook


Jumbo Interactive Limited (ASX:JIN) (Jumbo) today announced its results for the half year ended 31 December 2022. Jumbo CEO and Founder Mike Veverka said “We are pleased with the solid growth achieved in 1H23 which reflects a strong recovery in jackpots in the second quarter, including the $160 million Powerball, our best draw to date. Our platform continues to perform exceptionally well, with 100% uptime for the $160 million Powerball and a several records broken in terms of signups, checkouts and tickets sold per second. This performance is a testament to the work we’ve done in building a best-in-class lottery platform.”

“Stride has made a meaningful contribution to Group earnings and we are pleased to have completed our acquisition of StarVale in November 2022. We continue to be impressed by the quality and growth potential of these businesses, and the integration process is now well underway. The strength of our balance sheet, strong cash generation profile and debt headroom provide significant flexibility to support further growth.”

1H23 performance highlights Continued growth across key performance metrics: − TTV up 27.2% to $417.0 million. − Revenue up 18.1% to $62.4 million.

− Underlying EBITDA1 up 7.4% to $30.4 million.

− Underlying NPATA1,2 up 8.2% to $18.2 million.

− Underlying EPSA1,2 up 7.4% to 28.9 cents per share.

− Fully franked interim dividend up 4.5% to 23 cents per share.

Lottery Retailing There were 23 Powerball/OzLotto large jackpots3 in 1H23 (1H22: 23) with the average value per jackpot up 10% to $41.7 million (1H22: $37.8 million). 1Q23 jackpots were relatively subdued, reflecting one of the lowest average value per jackpot periods in over three years. This however was followed by a strong recovery in jackpots in 2Q23 which benefitted from three Powerball jackpots greater than or equal to $100 million. Against this backdrop, Lottery Retailing delivered TTV growth of 8% and revenue growth of 7%. The revenue margin declined 0.1% due to a shift in product mix with a relatively higher proportion of Powerball ticket sales. EBITDA decreased 3% to $15.3 million, reflecting an EBTIDA/revenue margin of 30.6% (1H22: 33.9%), which was impacted by the step-up in the service fee4 paid to The Lottery Corporation Limited (TLC).

1 Adjusted for one-off items of $0.126 million and $0.275 million in 1H22 and 1H23 respectively.

2 Net Profit After Tax/Earnings Per Share before amortisation of acquired intangible assets.

3 Greater than or equal to $15 million.

4 Pursuant to the Reseller Agreements with TLC signed on 29 August 2020, a ‘stepped-up’ service fee is payable in the subscription cost of the tickets purchased at 1.5% FY2021, 2.5% FY2022, 3.5% FY2023, and 4.65% FY2024 and thereafter. If the subscriptions exceed $400,000,000 in any applicable financial year, then a service of 4.65% applies to the excess amount.

Software-as-a-Service (SaaS) Jumbo licenses its Powered by Jumbo (PBJ) digital lottery platform to government and charity lottery operators in Australia and globally. Jumbo has an advantage through its dual role as a developer and client of our proprietary lottery software. SaaS delivered underlying TTV growth of 20%1 and external revenue growth of 19%1 with a stable revenue margin. Underlying EBITDA increased 8%1 to $15.7 million, reflecting an EBTIDA/revenue margin of 67.7% (1H22: 69.1%1 ).

Managed Services Jumbo provides its digital lottery platform as well as class leading lottery management services to charities and worthy causes looking to establish a lottery program or enhance an existing program. Managed Services includes Gatherwell Limited (Gatherwell) and the StarVale Group (StarVale) in the United Kingdom, and Stride Management Corp (Stride) in Canada.

Jumbo completed the acquisition of Stride on 1 June 2022 with a full six-month contribution recorded in 1H23 (nil in pcp), and StarVale on 1 November 2022 with only a two-month contribution recorded in 1H23 (nil in pcp). In aggregate, Managed Services generated $66.6 million in TTV, $8.0 million in revenue and $2.7 million in EBITDA, reflecting an EBITDA/revenue margin of 33.8%.



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