Jumbo’s Stock Uplifted On ASX On Its FY2019 Outlook

Jumbo Interactive Limited (ASX: JIN) forms a part of consumer services industries and is a digital retailer taking care of government and charitable lotteries through Oz Lotteries website. The company was founded in the year 1995 with more than 100 employees and more than 2 million customer accounts.

The company today on 15 February 2019, provided an updated about the outlook for FY19.  In the second half of the financial year, Jumbo expects to benefit from the large number of new customers acquired to date (1H19 199,410) as well as from active customers engaged through the Jumbo Lotto platform.

Large jackpot activity has driven the total transaction value of the company. It is expected that the level of this activity will affect expected growth in the total transaction value accordingly over the remaining period of FY2019. The expected seventeen number of large jackpots for 2H19 (FY19: about 40) considers the random and unpredictable nature of lottery games, and potential variance in forward-looking estimates.

The average large jackpot value is expected to be about $34.1 million in 2H19 compared to $37.4 million in 1H19 and about $36.0 million for FY2019 compared to $28.4 million in FY18. To take advantage of increased levels of jackpot activity with time, the company is investing in its software platform and marketing to be in a better position.

In its results highlights the company updated about the financial performance of the company. Among the key highlights the company maintained strong cash position of $77.3 million up from $47.9 million at 30 Jun 2018. The revenue was up 57.9% to $30.5 million on prior corresponding period of $19.3 million. The revenue margin stood at 20.6% with prior corresponding period margin at 21.7%. The net profit before tax is up by 136.2% to $18.2 million compared to $7.7 million in the prior corresponding period. The net profit before tax achieved a margin of 59.7% compared to 39.9% over the prior corresponding period. The EBITDA margin is up to a record of 62.6% compared 46.5% over the previous corresponding period.

The company has a vision of developing and operating the world’s best digital lottery experience § 25% online lottery players by 2020 § significant diversification by 2020. Strong results from H1 FY19 together with the strong start to H2 FY19 is expected to deliver higher TTV, Revenue and Earnings for full year FY19 as disclosed in the company guidance.

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On the price-performance front, the stock of Jumbo Interactive Limited last traded at $9.830, increased by 6.27% during the day’s trade with a market capitalisation of $558.69 million. The stock has generated a YTD return of 26.37% and posted significant returns of 90.33%, 25.0% and 18.59% over the last six months, three months and one-month period respectively. It has a 52-week high price of $10.330 and a 52-week low price of $3.324 with an average trading volume of 156,746. The stock is trading at a PE multiple of 39.530x with an EPS of AUD 0.234 and with an annual dividend yield of 2.0%.

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