Intertain (now Jackpotjoy plc) FY Results 2016

LONDON, UNITED KINGDOM–(Marketwired – Mar 29, 2017) – Jackpotjoy plc (LSE: JPJ)

LSE: JPJ

Intertain (now a subsidiary of Jackpotjoy plc)
Year End Results 31 December 2016

Operating cash flow of 111.7p per share¹

Q1 2017 revenue forecasted to be up 10% year-on-year

Jackpotjoy plc (LSE: JPJ) and The Intertain Group Limited (“Intertain”) (TSX: ITX) today jointly announce the Intertain group’s (the “Group’s”) results for year ended 31 December 2016.

Financial summary²

		Year ended 31 December 2016 £m		Year ended 31 December 2015 £m3		Reported Change %
Revenue		269.0		234.9		15
Net loss (as reported under IFRS)		(40.6)		(111.1)		(63)
Adjusted EBITDA4		102.2		85.8		19
Adjusted net income4		83.5		71.5		17
Diluted net loss per share1		(57.1)p		(152.5)p		(63)
Diluted adjusted net income per share1,4		113.0p		95.0p		19

Group financial highlights

• Strong group financial performance on a like-for-like basis³:
  • Revenue growth of 15%
  • Adjusted EBITDA⁴ growth of 19%
  • Diluted Adjusted net income per share⁴ growth of 19%
• Record cash generation; £83.0 million of operating cash flow generated in 2016:
  • 111.7p of operating cash flow per share¹. Excluding one-time/exceptional items¹, this metric would increase to 138.8p per share¹
  • 81% conversion rate from Adjusted EBITDA⁴ to operating cash flow. Excluding one-time/exceptional items⁵ this metric would increase to 101%
  • Unlevered free cash flow⁶ of 108.4p per share
• Capital structure certainty and predictability:
  • Secured debt financing to pre-pay to Gamesys Limited (“Gamesys”) £150m of the earn-out relating to the Jackpotjoy and Starspins brands
  • All debt and earn-outs expected to be paid down from future internally generated cash
  • Cross-currency swap proceeds of US$42.6 million realized and new cross-currency swap entered into on 28 March 2017

¹ Per share figures are calculated on a diluted weighted average basis using the IFRS treasury method.
² Intertain reported its 31 December 2016 financial results using CAD as its reporting currency. This release reports all figures, unless otherwise noted, in GBP (as Intertain changed its reporting currency to GBP effective 1 January 2017). Intertain’s 31 December 2016 and 2015 consolidated statements of comprehensive income, consolidated balance sheets, and consolidated statements of cash flows, reported in GBP, are contained under “31 December 2016 and 2015 Results Reported in GBP” on pages 20 through 24 of this release.
³ Figures reflect results for full periods, rather than only the periods in which Intertain owned each brand.
⁴ This release contains non-IFRS financial measures, which are noted where used. For additional details, including with respect to the reconciliations from these non-IFRS financial measures, please refer to the information under the heading “Adjusted Measures for Financial Year Ended 31 December 2016 and 2015” on pages 25 through 27 of this release.
⁵ One-time/exceptional items include transaction-related costs paid, Independent Committee related expenses and severance payments.
⁶ Unlevered free cash flow is calculated by deducting cash used in investing activities from operating cash flow.

Operational highlights

• Robust operating performance across business units:
  • Jackpotjoy revenue growth of 17%, adjusted net income⁴ growth of 34%
  • Vera&John revenue growth of 20%⁴, adjusted net income⁴ growth of 124%⁷
  • Mandalay revenue growth of 1%, adjusted net income⁴ growth of (23%)
• Solid improvement in core KPIs⁸ year-on-year
  • Average Active Customers⁸ grew to 235,584 in 2016, an increase of 15%
  • Average Real Money Gaming Revenue per month⁸ grew to £20.3 million, an increase of 20%
  • Monthly Real Money Gaming Revenue per Average Active Customer⁸ of £86, an increase of 4%
• Revenues from regulated markets at 77% of overall revenues

Post period end highlights

• On 25 January 2017, Jackpotjoy plc ordinary shares admitted to trading on the standard segment of the Main Market of the London Stock Exchange
  • Intertain exchangeable shares also issued and listed on the Toronto Stock Exchange
• Based on data from the first 12 weeks of 2017, Jackpotjoy plc expects three months ended 31 March 2017 to show approximately 10% revenue growth year-on-year. This is in line with the expectations of the Jackpotjoy plc board of directors (the “Board”)

Outlook

We believe Jackpotjoy plc is ideally positioned to take advantage of exciting future growth in the online gaming sector, which will be driven by a combination of improved accessibility of customers through the growing use of mobile devices, expanding customer demographics, and regulatory trends that are opening more markets up to online gaming.

The value of the global online casino and online bingo market is forecast to be approximately EUR12 billion by 2018, representing a compound annual growth rate of more than approximately 10% from 2014 (source: H2 Gambling Capital 2015) while mobile gambling is expected to grow at double-digit rates (source: Global Online Gambling and Betting Market 2015). 

For 2017, management expects revenue growth in line with market growth rates. Based on data from the first 12 weeks of 2017, we expect Q1 2017 to show approximately 10% revenue growth year-on-year, in line with Board expectations. Although Adjusted EBITDA⁴ (on a pro forma basis)³ grew by 19% in 2016, profitability growth in 2017 will be somewhat impacted by the introduction of UK point-of-consumption (“POC”) tax on bonuses, due to commence in August 2017, and by an increasing proportion of our revenue being earned in the high-growth and relatively high-tax Spanish market.

⁷ Excludes income earned from the Revenue Guarantee (as defined below) and platform migration fees. In the year ended 31 December 2016, EUR2.7 million (2015 – EUR13.5 million) was earned from the Revenue Guarantee and platform migration fees.
⁸For additional details, please refer to the information under the heading “Key performance indicators” on page 19 of this release.

Andrew McIver, Chief Executive Officer, commented:

“The past financial year has been a turbulent one for the Group, so I am pleased to be reporting strong results today, which clearly demonstrate the strength of our brands across the portfolio. Strong group revenue growth of 15% has been driven by growth across all our business units, with our largest brand, Jackpotjoy, reporting impressive growth of 17%.

I am also pleased to say that on a constant currency basis we achieved the high end of our market guidance. This is something I am particularly proud of given the strategic initiatives that were ongoing throughout 2016, and clearly demonstrates our ability to develop and grow our brands whilst also undertaking significant corporate-level activities.

Looking ahead to 2017, I am excited about what the year holds for Jackpotjoy plc, following our listing on the London Stock Exchange in January 2017. I am confident that our strong portfolio of brands will continue to deliver strong organic growth and this is further evidenced by the 10% revenue growth year-on-year we are forecasting for Q1 2017. I look forward to updating you further on our progress throughout the year ahead.”

Conference call

A conference call for analysts and investors will be held today at 1.00pm UK / 8.00am ET. Please contact the Jackpotjoy Group or Finsbury for further details if you wish to participate.

Intertain results for the year ended 31 December 2016 and Jackpotjoy plc audited accounts for the year ended 31 December 2016

Intertain’s financial statements for the year ended 31 December 2016 (the “2016 Consolidated Financial Statements”) and related management’s discussion and analysis will be available today on Intertain’s SEDAR profile and the Jackpotjoy plc website at http://jackpotjoyplc.com/investors/intertain-q4-and-full-year-2016/

Jackpotjoy plc also announces today that its annual audited accounts for the financial year ended 31 December 2016 will be available today on Jackpotjoy plc’s SEDAR profile and the Jackpotjoy plc website at http://jackpotjoyplc.com/investors/annual-and-interim-reports/

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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