Jumbo Interactive boosts profits as it leans on Australia’s love of the lotto
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Jumbo Interactive just beat on half-year earnings guidance, as its online lotteries business continues to build momentum.
Revenue for the six months to December 31 came in at 30.5 million, topping the company’s forecast of 29.9m.
Net profit after tax for the period came in at $12.7m, ahead of guidance and a 140 per cent increase from the prior year corresponding period.
Shares in Jumbo (ASX: JIN) were up more than three per cent in early trade at $9.54.
Jumbo’s been at this for a while — the company sold its first lottery ticket online back in 2000.
But it attributes recent momentum to the rollout of new software which has helped drive a surge in user engagement.
The “Jumbo Lotto” platform was launched in March 2017 and user migration was completed in June last year.
In the six months since then, new account signups almost doubled and the number of active users increased by 47.9 per cent.
Over the same time frame, Jumbo’s share price has also been on a steady upward trajectory, rising from around $4.50 in early June to above $9.50 today.
As a digital lottery retailer, Jumbo provides people with a simple platform to try to hit the jackpot.
But amid the recent success of the business, CEO Mike Veverka has also been cashing in himself.
The CEO and founder routinely popped up in Stockhead’s coverage of substantial director trades last year, exercising cheap stock options before selling down (and picking up some seven-figure gains in the process).
Jumbo says that based on its half-year numbers, it now has a springboard for substantial growth in the 2019 financial year.
“In the second half of the financial year, Jumbo expects to benefit from the large number of new customers acquired to date, as well as from active customers engaged through the Jumbo Lotto platform,” the company said.
Full-year net profit after tax is now forecast to come in at $24.2 million, an increase of more than 100 per cent from the prior year.