JPJ Group revenues up 14% on strong Vera&John growth
London-listed operator benefits from growth of Japan-facing business as revenue from Jackpotjoy brand falls 6%
JPJ Group has revealed a 14% year-on-year revenue increase in H1 2019 revenue to £169.5m, driven by strong growth from Vera&John and Japan.
The online gaming operator reported “strong organic growth” from its Vera & John subsidiary, up 59% YoY to £71.8m, while Vera&John adjusted EBITDA rose 109% YoY.
Earlier this month, JPJ chose to close its Vera&John and InterCasino brands in the UK, with JPJ Group chair Simon Wykes attributing this to a desire to adopt a “single market, single platform strategy”.
Jackpotjoy revenues fell by 6% YoY to £103.6m during the first half of 2019, due in part to the impact of enhanced due diligence measures in the UK and regulatory changes in the Swedish market.
As a result, adjusted EBITDA fell 26% YoY due to the impact of RGD in the UK (21%), increased taxation in Sweden (18%) and a growth in marketing spend in both markets.
Despite these issues, JPJ cited strong growth in its Botemania brand, which accounted for 17% of revenues in the Jackpotjoy segment during H1.
Overall adjusted EBITDA for the entire JPJ Group rose by a modest 2% YoY during H1 2019 to £54m.
The average number of active customers per month rose by 7% YoY during H1 2019 to 245,893, with an increase in average real-money gaming revenue per month of 12% YoY, or £26.5m.
JPJ Group executive chairman Neil Goulden expressed his satisfaction that the company had continued to deliver solid revenue growth despite the impact of higher gaming taxes on company EBITDA.
Speaking about the forthcoming acquisition of the Gamesys business, which was approved by shareholders last month, Goulden said he expects it to deliver “double-digit earnings accretion” during the first full year of ownership by JPJ.
“Our customers will also now have an even greater choice of major brands and different games, creating a truly leading UK and international operator. We expect the Gamesys acquisition to complete during Q3 2019 and we will update the market further in due course,” Goulden added.
Analysts Numis singled out a doubling of revenues from the group’s Japanese operations as playing a significant part in its revenue rise during the period.
“Given this is an unregulated market, with little visibility re market share, market growth etc, it is difficult to judge how sustainable this is, but clearly its bespoke content and marketing initiatives are paying dividends,” Numis added.
Numis believes UK revenues “should return to growth” during the second half of 2019, citing a fall in the decrease in revenues during the first two quarters of 2019. It also highlighted strong growth in JPJ Group’s operations in Brazil and Germany.