Shareholders in recently renamed JPJ Group (JPJ), formerly Jackpotjoy, could soon be receiving dividends. The online bingo operator just reported a 7 per cent improvement in operating cash flow to £49m, with an adjusted operating profit to cash conversion rate of 86 per cent. Part of that free cash flow will go towards paying down debt, aiming for a leverage ratio of 2.5 times cash profits, compared with 3.41 times at present. But chairman Neil Goulden said that once this target is achieved – expected to be this time next year – JPJ could start paying dividends. Any money left over that isn't reinvested could go towards share buybacks too.
Since the end of last year, the UK’s point of consumption tax now applies on bonus prizes to customers. This change, along with a higher marketing spend, contributed to a 4 per cent fall in adjusted cash profits to £56.9m. But profit growth is expected in the second half as TV advertising campaigns come to an end and the one-year anniversary of the tax passes.
Analysts at Numis expect pre-tax profits of £85.8m during 2018, giving EPS of 113p, up from £77.8m and 102p in 2017.
| JPJ GROUP (JPJ) | ||||
| ORD PRICE: | 967p | MARKET VALUE: | £718m | |
| TOUCH: | 962-967p | 12-MONTH HIGH: | 1,048p | LOW: 650p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 274p* | NET DEBT: | 178% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 147 | -19.9 | -27.0 | nil |
| 2018 | 161 | 0.07 | -1.0 | nil |
| % change | +10 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £561m, or 755p a share | ||||
