Pinned straw:
Jumbo is giving a presentation at a Macquarie event today.
Included is a trading update for the first 10 months of the financial year:
Good growth is continuing, with increased service fees being somewhat offset by price increases.
If you pro-rata ytd performance, you get a FY24 TTV of $534m. They told us to expect a better revenue margin (last year was 20.3%, but based on the 2nd half to date that's more like 22.5%), so FY revenue should be around $120m, giving an EBITDA estimate of ~$59m (based on 49% EBITDA margin) -- both of which are only marginally ahead of FY23 results. Still, as we saw last year, volatile jackpot results can really move things around.
In FY23, they went from $72m in revenues for the first 10 months and then added $45m in the last 2 months!
So it's hard to know, but my best guess is that shares are on a forward PE of something like 22x, which isn't excessive given the nature of earnings and their momentum.
Not sure it's a level where a buy back is really warranted (they have the capacity to buy back another $25m if they choose). To be fair, for the first half they only bought back $3.2m at an average price of $12.74, so as long as they are disciplined and opportunistic, it's not a worry for me.
Held.
FWIW this is what Morgan Stanley (Overweight PT $20.80) released in their update this morning ...
JIN today reiterated FY24 guidance with <2months>
Lottery retailing:
TTV +22% ytd vs MSe +16% and implied total system jackpot game sales of +19% ytd
Revenue +38% ytd vs MSe +32% for FY24e
1.1m active players vs MSe for FY24 of 1.03m
Revenue take rate 22.6% vs MSe 22.8%
Revenue A$101m after 10 months vs MSe A$119m for FY24e
5 cent price above TLC hike for Mon/Wed games (3% of TTV) - FY25 impact
Reiterated S&M as % of sales at 1.5-2.0%
Reiterated 48-50% group EBITDA margins
Expect 100% OCF conversion of EBITDA
Less colour on SaaS/managed services performance - reiterated MSD-HSD growth with reinvestment for FY24
Reaction to earnings:
Strengthens our investment thesis
Modest upside Financial results versus consensus
Modest revision higher Impact to next 12-month consensus EPS
Risks to Upside
- Acceleration in online penetration of lottery ticket sales
- Continuing to win share vs. The Lott
- Acceleration in SaaS growth
- Higher jackpot levels from lengthening odds
Risks to Downside
- Online penetration of lottery ticket sales starts to mature
- Failure to gain online share from increased competition
- Rising churn, lower customer spending
- Lower levels of jackpots
- Failure to achieve traction in software