JUMBO SLOW IN GERMANY BUT TICKET SALES HIT A RECORD
Written on the 19 February 2015 by Jenna Rathbone
LOTTERY business Jumbo Interactive Limited (ASX:JIN) has reported record ticket sales of $66 million for the December half year an increase of 21 per cent from the same time last year and 28 per cent up on the preceding six months.
JIN says a number of factors have contributed to sluggish development in Germany, including minimal differentiation in the JumboLotto app and website, limited interactive marketing channels and lack of legislation and enforcement to curb offshore unlicensed websites selling.
"Jumbo has reduced spending in Germany to allow time for changes to take effect and provide a foundation for a more sustainable operation," says JIN CEO and founder Mike Veverka.
"The fundamental attractiveness of the German market remains and I am confident that Jumbo can achieve its strategic goal of diversified earnings from multiple jurisdictions."
The $11 billion German lottery market is almost twice the size of the Australian market, however internet use is minimal with penetration around 1 per cent compared to 10 per cent in Australia.
JIN also has a presence in the US and Mexico.
JIN says strong sales in December helped lift pre-tax net profit to $800,000 and a lower than expected bottom-line loss of $23,000.
The number of customer accounts on OzLotteries.com.au has grown from 1.64 million to 1.82 million over the 12 months to December 31, while a steady 1.5c dividend has been declared.
Following this growth, the company is planning a significant rebuild, rebrand and relaunch of the company's app and website and says it will provide capabilities for new products integrated into the lottery game play process.
"With the continuing rise in popularity of the OzLotteries app and website, we have increased our investment in technology to further escalate growth through efficiency and product rather than just be proportional to marketing spend and optimisation," says Veverka.
JIN sold its first lottery ticket on the internet in 2000 and has since been listed on German stock exchanges in Frankfurt, Berlin and Stuttgart.
Author: Jenna Rathbone
About: Jenna Rathbone is a Queensland-based journalist who writes on a range of issues including business and property affairs and social issues.Connect via: Twitter