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“Subdued” start to Q2 for Jumbo Interactive after solid Q1

| By Robert Fletcher
Lottery retailer Jumbo Interactive has reported a “subdued” start to Q2 of its 2024 financial year, despite a solid first quarter.
Svenksa Spel revenue

Jumbo did not reveal a full set of financial figures but did publish a trading update as part of its 2023 AGM. This update suggests a slower start to Q2 on the back of a successful Q1.

The Australia-headquartered group said its retail business benefited from a solid large jackpot environment in Q1. There were 11 large jackpots and an aggregate value of AU$410.0m (US$261.0m/£213.4m/€244.7m), with the average jackpot value at $37.3m.

However, it was not so good news for the start of Q2, with October’s aggregate value at $185.0m. October 2022 was what Jumbo described as a formidable comparable period, featuring five large jackpots and an aggregate value of $390.0m. 

As a result, lottery retail total transaction value (TTV) – the gross amount received from the sale of goods and services rendered in the period – was down in the first four months of FY24. TTV for the period hit $153.7m a decline of 11.0%.

On the flip side, revenue for the four months was up 3% to $35.0m. This, Jumbo said, was underpinned by higher margins due to pricing changes implemented in May 2023. 

Better news for SaaS and managed services in Q1

Turning to Jumbo’s other operations, namely software-as-a-service (SaaS) and managed services. Both areas reported year-on-year growth during Q1.

SaaS external revenue increased 20.0% to $2.4m, helped by growth within the Lotterywest business. TTV for SaaS was also 20.0% higher for the quarter at $53.9m.

As for managed services, revenue climbed 123.1% to $5.8m in Q1. Jumbo says this was due to contributions from Gatherwell and StarVale in the UK, as well as Stride in Canada. It also felt the benefit of the StarVale acquisition that completed in November 2022.

Managed services TTV in Q1 also increased as a result of this, rising 128.7% year-on-year to $66.1m.

Outlook unchanged for Jumbo

Looking to expectations for the full year, Jumbo says its outlook remains unchanged. It will continue to target a group EBITDA margin of between 48.0% to 50.0%, excluding the impact of employee incentives and share-based payments.

Jumbo also continue to work to grow revenue faster than operating expenses. It notes that FY24 will see the final step up in the service fee to The Lottery Corporation. Moving forward, this service fee will remain constant.

“I would like to take this opportunity to thank our staff for their hard work and commitment and how as a team we have adapted to the changing work environment and the shift to a hybrid work model,” CEO Mike Veverka said.

“It has been great to connect with our teams in person, both here in Brisbane but also internationally, in the UK and Canada.”

Jumbo seeks new CFO

The update comes after Jumbo last month announced the exit of David Todd as its CFO

Todd resigned in July due to unforeseen personal health reasons. He agreed to remain in the position until a replacement was appointed and offered his services in an advisory capacity.

Jatin Khosla becomes interim CFO after two and a half years as head of investor relations at the retailer. He will serve in the temporary role while Jumbo undertakes a review of its global finance and support services.

“I would also like to take this opportunity to thank David,” Veverka said at the AGM. “Dave’s invaluable insights, incomparable work ethic and unwavering commitment to the team are an inspiration to us all. 

“We wish Dave the very best for the future.”

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