Transcription of Finance News Network Interview with Jumbo Interactive Limited (ASX:JIN) CEO and Executive Director, Mike Veverka
Carolyn Herbert: Jumbo Interactive Limited (ASX:JIN) sells lottery tickets online in Australia and throughout the world, including in North America, Europe and the Asia Pacific. I’m Carolyn Herbert and joining me at the CEO Sessions in Sydney is the company’s CEO and Executive Director, Mike Veverka. Mike, welcome back.
Mike Veverka: Thank you, it’s good to be back.
Carolyn Herbert: Can you start by giving us an introduction to the Jumbo Interactive business?
Mike Veverka: Jumbo’s a frontrunner in the growing world of Internet lotteries. We sold our first lottery ticket on the Internet back in 2000, and the company’s grown steadily ever since. From a very modest start to last year, we had ticket sales in excess of 130 million. And even in this first half, our ticket sales have reached 80 million, so we’re on quite a good growth path.
Carolyn Herbert: What sort of benefit does your online offering provide?
Mike Veverka: It basically takes the typical lottery ticket that you can buy anywhere and puts it on the Internet, over the web, on mobile. It brings with it lots of conveniences, such as you can never lose a ticket. We check the numbers for you; even collect your winnings. You can play your favourite number week in, week out. It’s available on the iPhone as well as on the web. So convenience is a real drawcard with what we do.
Carolyn Herbert: Have you had any large lotto winners recently?
Mike Veverka: We have actually. I had the exciting job just last Friday of contacting one of our customers, who scooped the $25 million pool on the Powerball using our app. So that was exciting for her and for us also.
Carolyn Herbert: Tell us a little bit about the key growth drivers of the business. What are they?
Mike Veverka: It’s basically an influx of customers into the lotteries by the younger demographics. By putting it on mobiles and on the web, you’re really getting in front of the younger demographics, who are now adopting lotteries. Also just the convenience of traditional lottery players that also buy tickets at their local store, but they also buy some of their tickets online. And that pretty much is the growth driver in Australia and around the world.
Carolyn Herbert: Taking a look at financials now, you’ve just released your results for the half ended 31 December 2015. What were the highlights?
Mike Veverka: Our results were highlighted by a dramatic increase, about a 600 per cent increase in our profit, to $2 million. And growth in ticket sales was around 20 per cent, to about $81 million. And about 20 per cent growth in revenue, to $17.8 million. So quite a good half year for us and it sets us up for a good second half.
Carolyn Herbert: How does the dividend compare to the previous period?
Mike Veverka: The strong result has given us the ability to increase the dividends from 1.5 cents to two cents now. That comes on the back of the strengthening of our balance sheet. Our net assets are now up to $23 million and the cash available of the company is up to $20 million. So it’s enabled us to increase our dividend.
Carolyn Herbert: Your German business has just undergone a significant restructure. Can you tell us a little bit more about this?
Mike Veverka: A few years ago, we decided to get into the German lottery market as a way of expanding the business. The first year was always going to be a tough year, luckily that’s behind us now. The company lost $3.6 million in the first year. This year we’ve restructured it, we’ve moved the head offices to Hamburg and made some improvements. Increased the sales and reduced the expenses, and lowered our loss, so that’s helped contribute to our better result this year.
Carolyn Herbert: Finally Mike. What’s your outlook for the next half, and what are you hoping to achieve over the next 12 months?
Mike Veverka: With a good start to this financial year, we really want to build on that and really drive towards a really good full year result. We’ve had a really good run of jackpots in January this year, so that’s set us on the right path. So with ticket sales of around about $80 million, we’d like to get to around about the $150-$160 million mark, maybe even more for the full year and drive our profits even higher.
Carolyn Herbert: Mike Veverka, thanks for the update on Jumbo Interactive.
Mike Veverka: Thank you very much.