Shares in Jackpotjoy slip as profit growth softens in third quarter

 
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Paddy McGuinness has replaced Barbara Windsor as the face of the brand (Source: Jackpotjoy)

Gambling operator Jackpotjoy reported another increase in revenue today, but underlying profit growth in the third quarter was softer.

The figures

Gaming revenue rose 14 per cent in the three months to 30 September to £75.4m. This was consistent with the 14 per cent rise for the first nine months of the year, with revenue at a total of £222m so far.

But underlying profits grew four per cent in the third quarter to £26.7m, bringing the nine-month average growth down to 11 per cent.

Shares fell 1.75 per cent today to 842.5p.

Why it's interesting

Underlying profits were impacted by higher marketing spend, as the core Jackpotjoy brand launched a new campaign fronted by Paddy McGuinness, who replaces Barbara Windsor as the face of the brand.

Mandalay, another of the group's brands, declined as it reduced bonusing activity ahead of a change in UK point of consumption tax. The tax, which is already payable on all bets made by UK customers at a rate of 15 per cent, will be payable on bonuses in the fourth quarter of this year.

Read more: Jackpotjoy's shares are up after its CEO said he was stepping down

Analysts at Canaccord Genuity said: "JPJ has been one of the strongest performers in the online gaming sector this year, up by 34 per cent since its move to a London listing in January. But while it has continued to deliver premium LfL revenue growth, it still trades at a discount valuation". They added that market share gains for Jackpotjoy or regulatory changes could both act as a catalyst to see the company trading in line with its peers.

What Jackpotjoy said

Newly-installed executive chairman Neil Goulden said: "Against a positive operational backdrop and given the new management structure in place, I have full confidence that Jackpotjoy plc will continue to go from strength to strength and generate attractive returns for our shareholders."

Read more: Jackpotjoy projects cash return for shareholders

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