Lottery retailer Jumbo Interactive has reported a “subdued” start to the second quarter of its 2024 financial year, despite a solid first quarter.

Jumbo did not disclose full financials but provided a trading update at its 2023 annual general meeting. This update suggests a slower start to the second quarter due to a successful first quarter.

The Australia-based group said its retail business benefited from a solid environment with large jackpots in the first quarter. There were 11 major jackpots and a total value of AU$410.0 million (US$261.0 million/£213.4 million/€244.7 million), with the average jackpot value being €37.3 million. $ lay.

However, with a total of $185.0 million in October, the news wasn’t so good at the start of the second quarter. October 2022 was an impressive comparison period, according to Jumbo, with five major jackpots and a total value of $390.0 million.

As a result, lottery retail total transaction value (TTV) – the gross amount generated from the sale of goods and services during that period – declined in the first four months of fiscal 2024. TTV fell 11.0% to $153.7 million in the period.

On the other hand, revenue increased 3% to $35.0 million for the four months. Jumbo said this was underpinned by higher margins due to the pricing changes introduced in May 2023.

Better news for SaaS and managed services in the first quarter

Now let’s move on to Jumbo’s other business areas, namely Software-as-a-Service (SaaS) and Managed Services. Both areas recorded year-on-year growth in the first quarter.

External SaaS revenue increased 20.0% to $2.4 million, supported by growth in the Lotterywest business. SaaS TTV also increased 20.0% to $53.9 million in the quarter.

Managed Services revenue increased 123.1% to $5.8 million in the first quarter. Jumbo said this was due to contributions from Gatherwell and StarVale in the UK and Stride in Canada. It also benefited from the StarVale acquisition, which closed in November 2022.

As a result, managed services TTV also increased in the first quarter, increasing 128.7% year-over-year to $66.1 million.

Outlook for Jumbo unchanged

Looking at expectations for the full year, Jumbo says the outlook remains unchanged. A group EBITDA margin of between 48.0% and 50.0% is still targeted, excluding the impact of employee incentives and share-based compensation.

Jumbo also continues to work to grow revenue faster than operating costs. It is noted that there will be a final service fee increase for The Lottery Corporation in FY24. In the future, this service fee will remain constant.

“I would like to take this opportunity to thank our employees for their hard work and dedication and how we, as a team, have adapted to the changing work environment and the shift to a hybrid work model,” said CEO Mike Veverka.

“It was great to connect personally with our teams, both here in Brisbane and internationally, in the UK and Canada.”

Jumbo is looking for a new CFO

The update comes after Jumbo announced the resignation of David Todd as CFO last month.

Todd resigned in July due to unforeseen health reasons. He agreed to remain in office until a successor was appointed and offered his services in an advisory capacity.

Jatin Khosla becomes interim CFO after two and a half years as head of investor relations at the retailer. He will take on the interim role while Jumbo conducts a review of its global financial and support services.

“I would also like to take this opportunity to thank David,” said Veverka at the general meeting. “Dave’s invaluable insights, unparalleled work ethic and unwavering commitment to the team are an inspiration to us all.

“We wish Dave all the best for the future.”