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© Provided by The Motley Fool jumbo share priceThe Jumbo Interactive Ltd(ASX: JIN) share price is on the move on Tuesday following the release of its half year results.
In early trade, the online lottery ticket seller’s shares are up 1.5% to $14.70.
How did Jumbo perform in the first half?
For the six months ended 31 December, Jumbo reported a 26% increase in total transaction value (TTV) to $233 million. This was despite an unkind Australian lottery jackpot cycle, with only 15 large jackpots during the period. This compares to 23 in the previous corresponding period, representing a decline of 35%.
However, due to softer revenue margins, Jumbo’s revenue grew at the slower rate of 9% to $41 million.
Nyc gambling center crossword. Also softening was Jumbo’s EBITDA/Revenue margin, which reduced 300 basis points to 59%. This led to underlying EBITDA growing just 3.7% to $24.1 million.
And on the bottom line, the company posted a 0.5% lift in net profit after tax (before amortisation) to $16.3 million.
In light of its soft profit growth, the Jumbo board elected to cut its interim dividend slightly to 18 cents per share fully franked.
Management commentary
Jumbo’s Executive Director and CEO, Mike Veverka, was very pleased with the result.
He said: “We are delighted with the Group results which show our new business segments helping to lift results in periods when the Jackpot cycles are low.”
“For the first time we are reporting our results in three segments, reflecting the evolving strength and diversity of Jumbo, as we continue to leverage our superior lottery management capabilities and technology to reshape our business, making lotteries easier for our partners and customers, and underpinning our continued growth, both domestically and offshore.”
Those three segments are its Lottery Retailing, SaaS, and Managed Services segments.
- The core Lottery Retailing business delivered TTV of $185.7 million, revenue of $37.8 million, and EBITDA of $15.4 million.
- Whereas the SaaS business contributed TTV of $39.9 million, revenue of $15.5 million, and EBITDA of $10.4 million.
- Finally, the Managed Services business was responsible for TTV of $7.2 million, revenue of $1.5 million, and EBITDA of $0.5 million.
Outlook
No guidance has been given for the full year. However, management notes that its Lottery Retailing business has had a promising start to the second half.
Management said: “Although we have made a promising start to the current half year, especially in our Lotteries Retailing segment, the macro environment we face is more uncertain than ever, which makes it difficult to make any financial forecasts for the financial year with any conviction.”
“However, I am confident that with the suite of businesses that we own, coupled with the likely growth of the markets within which they operate domestically and overseas, that we are well positioned to deliver superior returns to all our stakeholders over the medium to long term.”
One slight negative, though, is that the company revealed that its 85% payout ratio is under review.
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- Jumbo (ASX:JIN) share price slides despite positive update
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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