Jumbo Interactive shares on watch after acquisition approval

Jumbo Interactive Ltd (ASX: JIN) shares have been rocketing higher in 2019, but could climb higher after its UK acquisition was approved.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Jumbo Interactive Ltd (ASX: JIN) shares will be worth watching this morning after the company's recent UK acquisition gained regulatory approval.

What's the background to the acquisition?

Jumbo announced on 12 November that it would be acquiring lottery manager Gatherwell Limited for $9.1 million.

CEO Mike Veverka said the purchase would "accelerate Jumbo's expansion of the Software as a Service business in the UK."

The company is aiming for $1 billion of ticket sales through the Jumbo platform by 2022.

Jumbo had anticipated a response from the UK Gambling Commission by 31 January 2020, but today received the green light for the purchase.

The effective date of the acquisition will be 1 December 2019, with an expected 7-month contribution of $8.6 million in ticket sales to the Group's financial results.

The latest step is key to Jumbo reaching its $1 billion vision for the Jumbo platform by FY 2022.

How has Jumbo performed on the ASX this year?

Jumbo shares have climbed an astonishing 186.75% higher since the start of January. 

However, it's been a difficult November for shareholders as the company's shares have slumped 19.05% in the last 30 days.

The company's ambitious near-term goals have set the stage for a successful 2019, which has been full of aggressive customer acquisition and strong earnings.

Jumbo reported record financial results with a 74% year on year (YoY) increase in active customers to 761,863. Revenue rocketed 64% YoY, while net profit and earnings before interest, tax, depreciation and amortisation surged by 124% and 107%, respectively.

The group's SaaS vision has proven to be a hit, while the potential entry into the UK market also boosted investors' hopes higher.

Jumbo has a market cap of $1.3 billion and trades at a price-to-earnings ratio of 49.4x earnings. Jumbo shares are also netting a tidy 1.74% per annum dividend yield at the moment.

Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a miserly session for investors today.

Read more »

Happy coal miner.
Share Gainers

Up 75% this week, why is this ASX All Ords stock rocketing again today?

Investors are piling into this ASX 300 stock on Wednesday. But why?

Read more »

A young woman smiles as she rides a zip line high above the trees.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a bountiful session for investors this hump day.

Read more »

Man looking happy and excited as he looks at his mobile phone.
Share Gainers

Why Coronado, DroneShield, Lovisa, and Mayne Pharma shares are racing higher today

These shares are having a good time on hump day. But why?

Read more »

Man pointing at a blue rising share price graph.
Share Gainers

Guess which ASX 300 stock just rocketed 43% on big news!

Investors are piling into this ASX 300 stock on Wednesday. But why?

Read more »

Three friends leaping in the air in joy with a dog on the ground.
Share Gainers

Can May's top 3 performing ASX 50 stocks repeat in June?

These three blue chip stocks led the pack in the month of May. Do brokers think they can back it…

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX was back to the races this Tuesday.

Read more »

A woman reaches her arms to the sky as a plane flies overhead at sunset.
Travel Shares

Why the Qantas share price soared 20% in May to new all-time highs

With another stellar month in May, Qantas shares are up more than 79% in a year.

Read more »