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This year. We're going Beyond.

FY20 result: Jumbo (ASX:JIN) reports solid profit

Jumbo Interactive Ltd (ASX: JIN) announced a solid FY20 result, but the Jumbo share price is down.

Jumbo is a lottery reseller and operates the ozlotteries websites.

FY20 result

Jumbo revealed that its total transaction value (TTV) went up 9% to $349 million in FY20. This helped revenue increased by 9% to $71.1 million.

Underlying EBITDA (click here to learn what EBITDA means) grew by 8%, though EBIT only rose by 1% to $37.2 million. The low EBIT growth meant net profit was steady to $26.5 million.

This result was achieved with the number of large jackpots dropping by 20% to 39.

Dividends and balance sheet

Jumbo’s dividend was down 3% to 35.5 cents per share for the annual payment.

The company had $61 million of general cash, plus another $11 million of players’ funds. However, $15 million has been paid to Tabcorp Holdings Limited (ASX: TAH) since the year end due to the recent extension fee under the recently signed 10 year reseller agreements.

Summary

COVID-19 has driven players online, though the Tabcorp deal has put a dent in future profitability. Jumbo is often named among other ASX growth shares as promising, but I’m unsure how much further growth the company has. For that reason, there are other businesses I’d rather buy first. Names like Pushpush Holdings Ltd (ASX: PPH) and Australian Ethical Investments Limited (ASX: AEF) come to mind.

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Is BNPL the opportunity of a lifetime or is the sector a ticking time bomb?

Rask's analyst has just finished a 7,500-word report, The Ultimate BNPL Sector Report, taking a deep dive into this booming ASX sector. It shines a spotlight on each of the major players. You can get the full analyst report for FREE by CLICKING HERE NOW.

Note: the report is 100% free.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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