The Jumbo Interactive Ltd (ASX: JIN) share price will be on watch on Monday following the release of its half year results.
How did Jumbo perform in the first half?
For the six months ended December 31, Jumbo reported total transaction value (TTV) of $185.3 million and revenue of $37.6 million. This represents a 25% and 23% increase on the prior corresponding period.
This was driven largely by the addition of 199,200 new accounts during the half, bringing the number of active customers to 848,600 on a 12-month basis. The latter was a 47% lift from the end of December 2018. And although large jackpots during the half were flat at 23, the aggregate value of them lifted 24.4% to $1,070 million.
Two metrics that didn't improve during the half were its cost per lead (CPL) and the average spend per active customer. Jumbo's CPL lifted from $13 to $15 and its average spend fell from $420 to $389 per active customer.
Also weighing on its profits was a 36.7% increase in total expenses compared to the prior corresponding period. Management advised that this was due to its increased TTV and revenue, the Gatherwell acquisition, and step change expenses.
This ultimately led to its net profit after tax coming in 14% higher than the same time last year at $14.4 million. This was largely in line with its guidance. Diluted earnings per share rose 11% to 23 cents.
Pleasingly, this didn't stop the Jumbo board from growing its dividend at a quicker rate. It has lifted its interim dividend by 23% to a fully franked 18.5 cents per share.
Outlook.
Management provided an update on its "Billion dollar vision." This refers to its goal of growing the business to the point of processing $1 billion of tickets on the Jumbo software platform by 2022.
Jumbo explained: "To achieve the billion dollar vision by 2022, management will need to maintain growth in the ticket selling business at about the same rate as the 5-year-CAGR 24.7% for the next 3 years to reach $680 million. The remaining $320 million will need to come from the SaaS business which has signed up and is in the process of onboarding 3 clients that will generate approximately $135 million pa. of ticket sales."
It also notes that there is potential in the UK market and that the US online lottery market is opening up.
