JPJ Group sees Jackpotjoy decline offset by Vera&John growth in Q3

JPJ Group sees Jackpotjoy decline offset by Vera&John growth in Q3

Wednesday, November 14, 2018 Posted by News Team
Operator's core business impacted by new social responsibility controls

JPJ Group has shrugged off the impact of a decline in revenue from its core Jackpotjoy business to post an 8% year-on-year increase in revenue for the third quarter of the year.

Revenue for the period ended September 30th grew to £77.8m, with a 3% decline in Jackpotjoy revenue resulting from the poor performance of a number of brands, as well as new social responsibility measures. This, however, was offset by a 40% jump in revenue from the Vera&John business.

Jackpotjoy revenue fell to £52.1m, with this blamed on a decline in the brands acquired from Mandalay Media. The division was also hit by a drop in UK revenue resulting from the closure of a number of high-value accounts due to new social responsibility controls.

JPJ executive chairman Neil Goulden admitted that this was likely to impact revenue growth for the division in the short-term: “As part of our commitment to meeting the highest industry standards on responsible gambling, revenues at Jackpotjoy UK have been impacted by the responsible gambling measures we have implemented and the closure of a number of high value accounts.

“We expect that the impact of closed accounts will begin to annualise during H2 2019 and, provided there are no further regulatory challenges, the Jackpotjoy segment will return to revenue growth thereafter.”

During the quarter JPJ agreed to sell its social gaming business to South Korean studio Bagelcode in an £18m deal, as part of efforts to focus exclusively on real-money gaming.

The operator is looking to progress these plans further by bringing a number of operational functions currently outsourced to Gamesys – the business from which it acquired Jackpotjoy and other brands – in-house.

In addition, it has decided not to renew the non-compete agreement signed with Gamesys following the Jackpotjoy brands acquisition. This will allow Gamesys to launch new B2C brands, though JPJ said it does not believe this represents “significant incremental competitive threat” to its business.

Vera&John, meanwhile, saw revenue climb to £25.7m, with the strong quarterly performance driven by organic growth.

Over the quarter costs fell marginally to £65.1m, with a decline in administrative expenses offset by increased distribution costs. Adjusted earnings before interest, tax, depreciation and amortisation grew 13% to £28.8m.

For the quarter JPJ made a post-tax profit of £7.3m, having posted a loss of £8.2m in the prior year.

Looking at the first nine months of 2018, JPJ posted an 11% year-on-year rise in revenue to £233.2m, with EBTIDA up 3% to £84m for the period.

“Overall, we remain confident in our outlook for the full year,” Goulden added. “We continue to enjoy a strong association with Gamesys in a relationship which provides mutual benefits and we are also excited by the significant growth opportunities that exist in both existing and new markets, where we are well-placed to take advantage of this promising backdrop.”


Paddy Power Betfair takes majority stake in Adjarabet


888 secures igaming licence in Portugal


Swedish regulator issues final warning to licensed operators


IG highlights client ‘quality’ as ESMA measures hit

Gaming Products & Services Directory

The essential directory for the gaming industry