Q&A: JPJ Group on struggles in Sweden and focusing on big brands
EGR Intel chats to JPJ Group CEO Neil Goulden on rising growth in Vera&John, the aftermath of the Mandalay sale and its renewed focus on turning around its UK fortunes
JPJ Group yesterday reported a 13% year-on-year rise in its group revenues for Q1 2019, with strong organic growth in its Vera&John subsidiary but an 8% decline in the Jackpotjoy business.
CEO Neil Goulden chats to EGR Intel about the growth of Vera&John, the challenges of UK operation and the company’s renewed focus on its core portfolio of egaming brands.
EGR Intel: Once again, business revenues have been buoyed by “strong organic growth” in the Vera&John brand. What for you is the principle driver of that growth?
Neil Goulden (NG): I think it’s about getting the right people and the right products into the right markets. We trade very strongly in the Far East because we understand the market, have individuals working out there and have developed products specifically for that market. We don’t just try and push a generic UK-type business into the Far East, we adapt what we’re trying to do here specifically to that market. That applies not only to Japan, but equally to Germany and Brazil, all three of which are growing very fast for us.
EGR Intel: How are you going to return JackpotJoy to revenue growth?
NG: I think the first thing to say is that the brand itself is very healthy. In the first quarter we had a 35% increase in first-time deposits and we had a 8% increase in active customers, so more people than ever depositing on the site. It’s the biggest first-time depositor number we’ve had since 2012. More people are joining the site and more people are active on the site than ever before, so the brand is healthy. What we have had is the impact of UK regulatory activity on responsible gambling measures predominantly around obviously the VIP segments of the business.
EGR Intel: What are your impressions of the newly regulated Swedish market?
NG: Sweden’s turning out to be a difficult market for everyone. I think we’ve seen lots of other operators reporting difficult trading conditions in Sweden and we are no exception to this. The regulations are quite tight around what you can do in terms of bonusing, customer setting limits and self-exclusion, so there are several rules that have really tightened regulation far more than some people anticipated. Operators and customers alike are taking time to adapt to the new regulatory arrangements. However, in April we had a record number of first-time depositors in Sweden and in Q1 overall they were held pretty steady. It’s just adapting to what is a new regulatory regime.
EGR Intel: What is JPJ doing to distinguish itself in the intensely competitive Swedish environment?
NG: I think at the moment we’re actually to an extent sitting back a bit in Sweden and seeing what’s happening. We’re deliberately not spending a lot right at this stage and just wait to see how the market evolves, so we’re being quite cautious now. We’re getting our site right and product right but we’re not doing anything particularly active right at this moment.
EGR Intel: What are some of things you can do more of, having sold off Mandalay to focus on core UK brands?
NG: We have taken the view that where gambling regulation in the market is going is there will be a much lower number of operators over time. I think the regulator would like to see that as it makes it easier for them to regulate with a smaller number of bigger players in the marketplace. We therefore believe those with strong brands and big liquidity will ultimately be the winners. We just want to focus our attention on core brands InterCasino, Vera&John, Jackpotjoy and Star Spins, and having a platform like Mandalay with multiple brands on it doesn’t fit with our strategy.
EGR Intel: We understand you’ve been advocating for an operator-led lobby group for the industry, what’s the current progress on this?
NG: At the moment there still seems to be a divergence of interests between sports betting operators, particularly those with retail betting shops, and the rest of the industry. Unfortunately, there doesn’t seem to be a consensus in the industry but I’m still strongly of the opinion that the industry will be stronger if it unites, and we would like to try and encourage that. I talk to my counterparts from the other business and we get together regularly. Everyone says it’s a good idea but then you can’t agree what the strategy should be. So, I think there’s a will, we’ve just got to find the way.