Jackpotjoy plc (JPJ)

Business description

Jackpotjoy plc (JPJ) is a leading online gaming operator mainly focused on bingo-led gaming targeted towards female audiences. Around 76% of revenues are generated in regulated markets.

Y/E Dec Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 269.0 102.2 83.5 112.6 7.2 6.9
2017A 304.7 108.6 78.2 103.9 7.8 5.9
2018E 334.5 113.6 93.7 120.4 6.8 5.8
2019E 358.7 116.5 102.0 128.1 6.4 5.7

Last updated on 15/05/2018

Investment summary

Jackpotjoy plc’s (JPJ’s) Q1 revenues rose 13% to £80.7m, driven primarily by diversification and growth in international markets, with its Vera&John division (26% of revenues) increasing 35%. The earn-out period for the Spanish division has now ended and, given its strong performance, the total contingent consideration increased 20% in the quarter to £72.1m, with £63.8m payable this year. Our headline revenue and profit forecasts remain broadly unchanged and we continue to expect significant deleverage after the final major earn-out payment in June 2018. The stock trades at 7.8x EV/EBITDA and 6.5x P/E for FY19, a meaningful discount to peers.

Last updated on 15/05/2018

Industry outlook

JPJ operates in growing markets with positive structural drivers. Regulus Partners estimates UK online bingo and slots market growth of 11% CAGR between 2014-2021. The extension of the UK 15% gaming tax from net to gross revenues is being enforced retrospectively from 1 August 2017, affecting UK EBITDA margins by 3-4%. M&A is a feature of the sector, driven by economies of scale and tax/compliance costs in regulating markets.

Last updated on 27/04/2018

Key management

Neil Goulden, Chairman
Keith Laslop, CFO

Company address

35 Great St Helen’s Street
London
EC3A 6AP
United Kingdom
+44 (0) 207 160 5000
View website