Jackpotjoy reports strong gaming revenue growth for Q1

Jackpotjoy reports strong gaming revenue growth for Q1

Tuesday, May 16, 2017 Posted by Luke Massey

London Stock Exchange (LSE) new boy Jackpotjoy Group Plc has reported corporate revenues of £71 million for its Q1 2017 performance (period ending 31 March), as the company details growth for its flagship brand Jackpotjoy.com and subsidiary Vera&John Casino.

Updating investors, Jackpotjoy was pleased with a ‘robust opening’ to the year, which saw active customers exceed 230,000 players across its gaming portfolio.

The multi-brand operator also declared an adjusted EBITDA growth of 4% from Q1 2016 to £29.2 million. However, there was an 11% decline in ‘adjusted’ net income to £20.8 million, as the firm was impacted by interest expenses on a debt facility secured in Q4 2016.

Jackpotjoy CEO Andrew McIver said that, following a transformative 2016, the firm was adjusting to new business conditions as an LSE enterprise.

"The past quarter has been an exciting time for the Group as we have settled into our new home on the London Stock Exchange,” said McIver.

“Against this backdrop, it is pleasing to report strong gaming revenue growth of 11%, with particularly impressive growth of 14% at our largest brand, Jackpotjoy. Meanwhile, cash conversion remained strong at over 100% excluding one-off and exceptional items.”

As the latest sector player to secure an IPO, Jackpotjoy Group’s stock and share price has garnered close attention from industry analysts seeking to find out if the LSE new boys can deliver growth and value within the ultra-competitive UK and European online gambling market.

Victoria Pease, analyst at Edison Investment Research, commented: “Driven by the market-leading Jackpotjoy division, Q1 gaming revenues rose 11% to £71.4m with an EBITDA margin of 40.9% and underlying cash conversion of c 100%.

“Q2 trading has started well across all divisions. Adjusted net debt/EBITDA of c 4.0x remains high, but Jackpotjoy plc (JPJ) is comfortably positioned to pay a major c £95m earnout in June and we expect significant deleverage from 2018.

“The market is pricing in a high degree of execution risk, with 2017 trading multiples of 6.9x EV/EBITDA and 6.1x P/E. Despite regulatory headwinds, we forecast continued strong underlying growth and we would expect a re-rating as debt repayments begin to drive value to equity.”

Totally Gaming says: Jackpotjoy Plc and its assets will be given little time to adjust to their new PLC surroundings. The firm is now faced with a quick reorganisation of an operator which has proved be a consistent ‘cash cow’ for its London exchange investors.

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