Jumbo Interactive posts 21% revenue growth


Jumbo Interactive released its half-year results, with revenue and earnings even higher than what the company had forecast in its upwardly revised figures just last month.

Key figures from today?s results include: Revenue up 21% on the previous corresponding period (pcp) to $19.3 million
Net profit after tax from continuing operations up 53% on pcp to $5.3 million Interim dividend up 114% on pcp to 7.5 cents.Total transaction value up 28% on pcp to $89.1 million

The company stated improved customer engagement and a greater number of lottery jackpots for the period were key drivers of higher revenue and earnings. I expect demand growth for online lottery tickets to continue due to increasing awareness of the product and demographic changes.

Total expenses also increased 8.2% during the period as Jumbo continues to invest in “three main pillars” to support ongoing growth; the company’s proprietary software platform, marketing, and employees.

Although expenses were higher, Jumbo is a pure-online player and is not a capital-intensive business which requires large reinvestment.

While revenue rose 21% on the same time last year, cost of sales actually fell 9.7% for the period, highlighting the impressive scalability of the business.

Cash is an issue, though only because Jumbo has so much of it. For a company with a market capitalisation of around $200 million, it has $34.4 million in cash of its own.

Jumbo more than doubled operating cash flow to $11.3 million for the period, and even though the interim dividend was increased 114%, company directors have stated they will “continue to review capital management options in respect of the general cash surplus.”

That could mean another special dividend coming in 2018, following the whopping 15 cents special the company paid in August last year. As it stands, Jumbo has a cash position of almost twice its total liabilities and has no interest-bearing debt. With the company performing so well and in such a strong financial position, it makes sense for surplus funds to be returned to shareholders.