Jackpotjoy Q1 profits hit by marketing costs and bonus tax
Operator to continue marketing investment as it plans new campaign in Spain for Q2
Jackpotjoy has reported group profits dropped 7% in Q1 to £27m due to increased marketing spend and the introduction of POC tax on bonusing in Q4 17.
EBITDA also took a hit from marketing costs rising 51% during Q1. Goulden said increased marketing efforts would continue in Q2 with a new campaign to launch in Spain.
However, revenues were up 13% on the previous year to £80.7m with the Vera&John arm of the business increasing by 35%.
Jackpotjoy, which accounts for 74% of the overall business, saw revenues rise 7% year-on-year to £60m.
JPJ executive chairman Neil Goulden put this down to “good operational execution across all brands”.
Revenue share in the UK dropped 4%, with Sweden also down 2%. Rest of Europe accounted for 16% of group revenues, up 5% on the previous year. This is likely attributed to growth in Spain.
“I am confident that we will continue to drive good growth and attractive returns for our shareholders over the remainder of FY18 and beyond,” Goulden said.
An analyst note by Regulus Partners said: “In order to drive sustained and broadly-based growth, JPJ needs at least one of two things from a strategic perspective, in our view: the ability to tap into higher growth product segments, and/or; a broader, deeper international reach.”