Online bingo-led operator JPJ Group, formerly known as Jackpotjoy, has signed a share purchase agreement for the sale of its social business for £18.1m as it focuses on real-money gaming and reducing net leverage.
Detailing the sale in this morning’s half-year figures that fell in line with market expectations, JPJ Group also stated that “significant growth opportunities continue to exist in global online gaming markets… we are confident that we are well-placed to take advantage of this backdrop”.
JPJ Group’s total game revenue was up 10 per cent year on year to £161.1m by the end of June 2017 and adjusted EBITDA decreased four per cent to £56.9m, due to a planned increase in marketing costs and the application of a raise in point of consumption tax in the UK in Q4 2017.
Adjusted net debt was £362.9m (December 31, 2017: £387.3m) with the adjusted net leverage ratio of 3.41x (December 31, 2017: 3.57x).
Adjusted net income increased by seven per cent to £45.5m year-on-year and strong cash generation produced operating cash flow of £49m, up seven per cent, with 65p of operating cash flow per share.
During the period, the final Botemania earn-out payment of £58.5m was made, along with a £5m milestone payment.
Neil Goulden, JPJ Group executive chairman, said: "The first half of the year has seen a continuation of the strong momentum that JPJ Group plc has reported since listing in the UK in January 2017.
“As expected, Adjusted EBITDA1 was down four per cent year-on-year, but is expected to return to growth in the second half of the year following the conclusion of the TV advertising campaigns and as we pass the anniversary of the introduction of the POC2 on gross gaming revenue in the UK.
"There were also several significant milestones for the Group during the period. In June, we announced the intention to move to a premium listing on the London Stock Exchange, which was effective from 26 July 2018. We believe this provides us with an appropriate platform for continued growth, as well as exposure to a wider investor base and enhanced liquidity in our shares.
“In addition, also in June, we made the final earn-out payment to Gamesys in relation to Botemania, which was comfortably met from existing cash balances, and today we announced that we have signed a share purchase agreement for the sale of the social business enabling us to focus solely on our core activity of real money gaming. Looking ahead, I am confident that the Group's strong cash flow generation provides us with the opportunity to create additional value for shareholders as we continue to deleverage."
