The Jumbo Interactive Ltd (ASX: JIN) share price is edging higher today following the release of the company's full-year results.
At the time of writing, the lottery ticket seller's shares are up 5.88% to $14.77.
Image source: Getty Images
Jumbo share price climbs amid double-digit growth
Jumbo delivered its FY2022 results for the 12 months ended 30 June 2022. Here are some of the key financial highlights:
- Total Transaction Value (TTV) up 36 % to $659.9 million
- Revenue up 25% to $104.3 million
- Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) up 13% to $55.1 million
- Underlying net profit after tax (NPAT) up 14% to $32.2 million
- Final dividend of 20.5 cents per share, fully franked, bringing the full year dividend to 42.5 cents per share, up 16%
What happened in FY2022?
Jumbo reported a robust result with all key metrics increasing by double-digits.
Group revenue surged by 28% on an underlying basis, underpinned by strong growth across all operating segments.
This included the lottery retailing segment, which registered a 26.7% increase in revenue to a record $91 million. Improved jackpots and customer activity drove the outstanding performance.
The software-as-a-service (SaaS) division experienced a 31.9% jump in revenue to $42.7 million. Jumbo stated that all SaaS clients were tracking well.
And lastly, the managed services business which predominantly reflects UK-based Gatherwell, soared 24.3% in revenue to $2.3 million. The company's expanded international footprint via acquisitions of Stride and StarVale helped support this result.
On the back of achieving ongoing positive cash generation, the board declared a final, fully franked dividend of 20.5 cents per share. This translates to a dividend payout ratio of 85.6% of statutory NPAT.
The payment date for the dividend is on 23 September 2022.
In addition, Jumbo decided to further maximise shareholder value by undertaking an on-market share buyback of up to $25 million. This will be conducted on an opportunistic basis from next month.
What did management say?
Jumbo CEO and founder, Mike Veverka said:
We are pleased with the strong growth achieved in FY22 off the back of an improved jackpot cycle. FY22 was a pivotal year for Jumbo as we build the foundations to successfully execute our global growth strategy. Lottery Retailing is exceptionally well positioned to benefit from the ongoing shift to digital and the new OzLotto game launched in May 2022, while the integration of Stride and StarVale will build scale in our Managed Services and SaaS segments globally.
Veverka went on to talk about the company's capital management, adding:
The strength of our balance sheet, strong cash generation profile of our business, debt headroom and flexibility from our revised dividend policy enables us to continue to invest in the business, provides capacity for further M&A and organic growth, and delivers shareholder returns through dividends and a share buy-back.
What's the outlook for FY2023?
Jumbo didn't provide any earnings or profit guidance for FY2022 but provided some insight on what lies ahead.
Cost of sales will be impacted by the increase in The Lottery Corporation service fee rising from 2.5% to 3.5%.
Marketing costs are expected to be in the range of 1.5% to 2% of Lottery Retailing TTV.
Excluding the impact of the Stride and StarVale acquisitions, group underlying operating cost growth is anticipated to moderate, with Jumbo targeting an increase of 20% to 22%.
This is expected to translate to an underlying EBITDA margin between 48% to 50%.
Jumbo share price snapshot
In the past 12 months, the Jumbo share price has fallen 10%.
