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Jackpotjoy continues to adjust to its London listing

The gambling website moved its listing from Toronto to London in January and is in the process of paying down its debt
August 15, 2017

Gambling website Jackpotjoy (JPJ) is still adjusting to being a London-listed company after moving its headquarters from Toronto to the UK in January. Part of the reason the group made the move is to pay down its debt, and chief executive Andrew McIver is optimistic about progress on this front, particularly as cash conversion peaked at 99 per cent during the second quarter.

IC TIP: Hold at 685p

As such, adjusted net leverage fell from four times to 3.6 times cash profit at the halfway stage, although Mr McIver would like this ratio to eventually fall to around two times by the end of the financial year. The debt reduction process should also be helped by the fact the company has now paid its last instalment of £94.2m for the non-Spanish assets of the Jackpotjoy and Starspins brands – two historic acquisitions – from existing its cash resources.

In the meantime, more users are heading to the site. The number of average active customers rose by 13 per cent year on year to 243,896, which helped average real monthly gaming revenue rise 16 per cent year on year to £21.8m.

Analysts at Canaccord Genuity expect pre-tax profit of £71.1m in the year to December 2017, giving EPS of 93.4p, compared with £83.5m and 113p in 2016.

JACKPOTJOY (JPJ)   
ORD PRICE:685pMARKET VALUE:£507m
TOUCH:681-685p12-MONTH HIGH:690pLOW: 529p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:319p*NET DEBT:137%
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2016130-9.6-14.0nil
2017147-19.9-27.0nil
% change+13---
Ex-div:na   
Payment:na   
*Includes £620m of intangible assets, or 837p a share