Revenue down, but profit up as Jumbo investors hit the jackpot
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Lottery app maker Jumbo Interactive’s share price has more than doubled in the past year, and profit increased despite lower revenue and user sign-ups.
Jumbo (ASX:JIN) released its annual report on Thursday morning, which showed off impressive results for the year to June 30 despite some challenges.
Revenue was down about 5 per cent, but profit jumped more than 20 per cent to $5 million. JIN shares rose from $1.30 to $2.66 during the year.
Jumbo’s app and website OzLotteries sells tickets to a range of sweepstakes including OzLotto, Powerball and TattsLotto.
It also specialises in smaller charity lotteries for organisations such as the Prince of Wales Hospital and Surf Life Saving.
The company was held back by its business in Germany, which was shuttered after a loss of about $2 million.
Jumbo was also challenged by a decline of interest in lotteries due to fewer massive payouts making headlines.
The number of OzLotto and Powerball jackpot wins valued more than $15 million decreased by 31 per cent over the financial year, Jumbo said.
This prompted a decrease in revenue and a drop in new customer sign-ups — which fell from 206,000 to 161,000 year-on-year.
Despite this, the average spend per online customer was up and Jumbo said charity lotteries in particular had been proving popular with younger players.
In May, Tatts Group bought a 15 per cent stake in the company and extended its ticket reseller agreements for another five years.
‘Hey mate, you’ve won $20 million’
Jumbo’s annual report included a colourful story about a memorable phone call that boss Mike Veverka got to make last year.
“Five years ago, an OzLotteries customer set up Autoplay to keep playing his favourite numbers each week,” it said.
“Then he forgot about it until one day in August 2016, he received a call from Mike.
“Mike told him he had just won $20 million in OzLotto.
“At first the bemused customer thought it was a prank because he didn’t remember buying a ticket.”
Jumbo’s annual report can be viewed here.