This morning online lottery ticket retailer Jumbo Interactive Ltd (ASX: JIN) reported its net profit soared 124% to $26.4 million on revenue up 65% to $65 million for the financial year ending June 30, 2019.
Jumbo is the group behind the Oz Lotteries Group that operates popular lotteries like Oz Lotto, Powerball, Lotto and Lucky Lotteries.
It's growing sales and profits as more people prefer the convenience of buying tickets online, rather than over the counter at the local newsagents. Buying online also means it's impossible to lose the ticket if you do hit the jackpot.
Thanks to the digital shift and Jumbo's new lotto products total transaction value (TTV or all ticket sales) lifted 75% to $325.7 million.
The group will pay a final full franked dividend of 21.5 cents per share to take full year normalised dividends to 36.5 cents per share, an amount which monsters last year's normalised 18.5 cents per share. The group has also paid special dividends over the past three financial years.
"Jumbo's performance, which is attributable to our new software platform's ability to make the most from a favourable run of jackpots, is our best selling point to new Software as a Service (SaaS) clients", said Mr Mike Veverka, CEO of Jumbo Interactive.
Jumbo is now targeting a $1 billion in lottery ticket sales by 2022 which would triple TTV and likely drag revenues and profits even higher given the operating leverage in the business. It expects its resellers of ozlotteries.com to be the main contributor if the TTV growth target is met.
Despite the impressive numbers the stock is down 13% to $17.57 in trade today. The group reported TTV in July 2019 was up 61% on the prior corresponding period, but declined to provide any specific guidance for FY 2020.
