Expansion costs hurt Jumbo Interactive profits
Australian internet lottery company increases expansion costs by 257% as net profits tumble 55% year-on-year
Australian online lottery company Jumbo Interactive saw net profits fall 55% in 2013 as costs soared due to the firm’s moves into the German and Latin American markets.
Net profits fell to A$3m in the financial year ended 30 June 2013, a 55% fall compared to $6.7m in FY2012 as the Australian firm’s international expansion costs rose 257% from $0.7m to $2.5m. EBITDA also declined 36.4% year-on-year from $10.5m to $6.7m, despite year-on-year revenues increasing 4.6% from $24.1m to $25.2m in FY2013.
Jumbo Interactive Limited CEO and founder Mike Veverka said in a statement the company is well placed to benefit from its expansion drive by next year.
“In 2014, Jumbo will begin earning revenue in Germany, USA and Mexico as well as Australia and we are making the right progress in building the required infrastructure to support these businesses for the benefit of the company and its shareholders over the long term,” he said.
“With over $16.9m in net cash and a strong balance sheet with net assets of $20.5m, Jumbo is able to comfortably steer these projects into profitability,” Veverka added.
Jumbo Interactive announced last month that it had been awarded licences to sell internet lottery tickets in 16 German states for a period of five years. Jumbo’s move into the German market follows expansions into the $64m North American and Latin American lottery markets in November last year.