Australia’s largest betting operator Tabcorp Holdings has increased its stake in online lottery reseller Jumbo Interactive Limited, further cementing the commercial relationship between them.
In a disclosure to the Australia Stock Exchange, Tabcorp said it bought approximately 3.5 million Jumbo shares at an excise price of AUD2.37 (US$1.75) per share, for a total of AUD8.3 million ($6.08 million). The sale was made through Tabcorp’s wholly-owned subsidiary, Tatts Online Pty. Ltd.
The Aussie wagering operator also sold approximately 2.9 million Jumbo shares worth AUD6.9 million ($5.09 million) to a group of institutional investors in conjunction with the exercise of the option with the operator of Oz Lotteries site. Despite this move, Tabcorp’s stake in Jumbo still grew to 12.49 percent. As of July 3, Tabcorp’s shareholding in Jumbo has increased from 6.6 million shares to approximately 7.2 million shares.
“Tabcorp regards its holding in Jumbo as strategically important. Tabcorp has no current intention to sell any remaining shareholding in Jumbo,” the company said in a statement.
The relationship between Jumbo and Tabcorp started in May 2017 when Tatts Group Limited inked a long term extension and expansion agreement with the online lottery reseller. The AUD15.66 million ($11.56 million) initial investment of Tatts was used by Jumbo to fund or supplement additional growth or business investment opportunities; strategic acquisition opportunities; and expansion opportunities to accelerate its growing charity lottery business.
In its recent trading update, Jumbo expressed optimism that its net profit after tax (NPAT) may grow 45 percent to AUD11.3 million ($8.34 million) in FY 2018 from AUD7.6 million ($5.61 million) in the previous financial year.
The company’s total transactional value may also rise 25 percent to AUD182 million ($134.36 million) in FY 2018, while growth in its active customer base is expected to lift Jumbo’s FY2018 revenue by 15 percent to AUD37.3 million ($27.54 million).
Jumbo Interactive founder and CEO Mike Veverka attributed the company’s optimism to the “continual improvements in marketing that have engaged existing customers as well as acquiring new customers.”