Jackpotjoy reports 17% growth in H1 and opts to pay down debt

Jackpotjoy this morning reported revenue growth of 13% to £146.6m in H1, although the firm’s effort to reduce its debt by 20% resulted in a net loss before tax of £19.9m.

Revenues grew 16% on a like-for-like constant currency basis to £75.2m in Q2, with growth driven by Vera&John and the firm’s StarSpins and Botemania brands within the Jackpotjoy segment while revenues were flat year-on-year at the Mandalay segment.

“The second quarter has been another good quarter of growth across the Group with revenue increasing 17%, including top-line growth of 18% at our leading UK bingo brand, Jackpotjoy,” McIver commented.

But CEO Andrew McIver said reducing the group’s “historic debt burden” had been a key priority, with gross debt including earn-outs reduced 19.5% from £514.8m to £414.5m in the six months to July 2017.

EBITDA also increased 15% to £59.2m for the six month period ending 30 June 2017 partly due to marketing costs being weighted towards H2, and McIver noted the highly cash generative nature of the business allowed them to focus on paying down debt in the period.

“A major milestone in this debt reduction was achieved in June when we made the final earn-out payment of £94.2 million for the non-Spanish assets within the Jackpotjoy segment, using existing cash resources, with the total consideration representing excellent value for shareholders,” McIver added.

The bingo-led operator predicted further robust revenue growth for 2017 despite the potential impact on profitability in H2 of the new PoC tax on bonus and free bets.

In an analyst note this morning, Regulus Partners said: “Jackpotjoy’s scale, brand strength and differentiated offer through Gamesys is likely to provide more opportunities through market disruption than the vast majority of its competitors. Equally, tighter management focus and an improving balance sheet should also underpin operational momentum and strategic flexibility.”