JPJ Group plc (Formerly Jackpotjoy plc) Results for the Six Months Ended 30 June 2018
LONDON, August 14, 2018 /PRNewswire/ --
Total gaming revenue up 10% year-on-year, performance in line with expectations
Shares transferred to a Premium Listing on LSE
JPJ Group plc (LSE: JPJ) (the 'Group'), a leading global online bingo-led operator, today announces results for the six months ended 30 June 2018.
Financial summary
Six months ended Six months ended Reported
30 June 2018 30 June 2017 Change
(GBPm) (GBPm) (%)
Total gaming revenue 161.1 146.6 10
Net loss (as reported under IFRS)(0.4) (20.1) 98
Adjusted EBITDA[1] 56.9 59.2 (4)
Adjusted net income[1] 45.5 42.6 7
Operating cash flows 49.0 45.6 7
Diluted net loss per share[2] GBP(0.01) GBP(0.27) 96
Diluted adjusted net income per
share[1],[2] GBP0.61 GBP0.57 7
Financial highlights for first six months
- Good financial performance
- Total gaming revenue rose 10% year-on-year (12% excluding social)
- Adjusted EBITDA[1] decreased 4% year-on-year, reflecting the planned increase in marketing costs and the application of point of consumption tax to gross gaming revenue ('POC2') in the UK from Q4 2017
- Adjusted net income[1] increased 7% year-on-year, principally due to a 37% decrease in interest expense
- Strong ongoing cash generation
- Operating cash flow of £49.0 million, an increase of 7% year-on-year, and 65p of operating cash flow per share[2]
- Adjusted EBITDA[1] to cash conversion of 86%; free cash flow[3] of £47.8 million
- Adjusted net debt[4] of £362.9 million (31 December 2017: £387.3 million) and adjusted net leverage ratio[5] of 3.41x (31 December 2017: 3.57x)
- Final Botemania earn-out payment of £58.5 million and a £5.0 million milestone payment made in June 2018 out of existing cash resources
- Signed a share purchase agreement for the sale of the social business for cash consideration of £18.1 million. Post completion, the Group will be exclusively focussed on its core activity of real money gaming and the disposal will represent another positive step in reducing net leverage
- Performance in line with expectations; outlook for the Group remains positive for the full year
Operational highlights
- Continued improvement in core KPIs[6] year-on-year:
- Average Active Customers per Month[6] grew to 259,861 in the twelve months to 30 June 2018, an increase of 7% year-on-year
- Average Real Money Gaming Revenue per Month[6] grew to £25.0 million, an increase of 15% year-on-year
- Monthly Real Money Gaming Revenue per Average Active Customer[6] of £96, an increase of 8% year-on-year
Business segments highlights for H1 2018
- Jackpotjoy[7] (72% of Group revenue) - Total gaming revenue growth of 2% year-on-year, reflecting strong growth in Botemania and Starspins (25% of segment revenues) and the impact of a reduction in social gaming revenue; Adjusted EBITDA[1] decreased 9% due to the impact of higher distribution costs from the UK TV advertising campaign and the introduction of POC2 on gross gaming revenue in the UK in Q4 2017
- Vera&John (28% of Group revenue) - Total gaming revenue growth of 37% year-on-year, 34% on a constant currency basis; Adjusted EBITDA[1] increased 31% due to strong organic revenue growth[8] partially offset by higher marketing spend and increased gaming tax
Neil Goulden, Executive Chairman, commented:
"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. Group revenue grew 10% with Average Active Customers per Month[6] also increasing 7%, driven by good growth across our global footprint, in particular in Spain and a number of relatively new markets. As expected, Adjusted EBITDA[1] was down 4% 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 ('LSE') 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."
Outlook
Profitability in the first six months of the financial year has been as expected and we are comfortable with market expectations for FY 2018. The Group's ongoing strong free cash flow generation is enabling us to rapidly deleverage, with net debt reduction to below 2.5x net debt/EBITDA remaining a key strategic target and the point at which we can consider options to return cash to shareholders. Significant growth opportunities continue to exist in global online gaming markets and we are confident that we are well-placed to take advantage of this backdrop.
Conference call
A conference call for analysts and investors will be held today at 1.00pm BST / 8.00am ET. To participate, interested parties are asked to dial +44 (0) 20 3003 2666 or +1 800 608-0547, or for US shareholders +1 866 966-5335, 10 minutes prior to the scheduled start of the call using the reference "JPJ" when prompted. A replay of the conference call will be available for 30 days by dialling +44 (0) 20 8196 1998 or +1 866 583-1035 and using reference 9762655#. A transcript will also be made available on JPJ Group plc's website at http://www.jpjgroup.com/investors
EXECUTIVE CHAIRMAN'S REVIEW
Overview and summary of results
JPJ Group plc has had a solid first half in the current financial year, continuing the strong momentum the company has demonstrated since listing on the London Stock Exchange in 2017. During the six-month period, we increased Group total gaming revenue by 10% and grew our customer base by 7%, to 259,861 Average Active Customers per Month[6]. Operating cash flow also remained strong, increasing by 7% year-on-year, and representing an Adjusted EBITDA[1] cash conversion rate of 86%.
The good performance across the Group was driven by strong growth in Botemania in Spain and Starspins in the UK. Vera&John also performed strongly, increasing total gaming revenue by 37%. Total gaming revenue growth in our Jackpotjoy[7] segment did slow in Q2 and partly reflects the impact of lower revenues in social gaming where high CPAs (cost per acquisition) shifted the focus to profitability. The introduction of a range of responsible gambling initiatives in the UK was also a feature of H1 and meant that good growth in actives was to a degree offset by lower UK average revenue per customer[9].
As previously highlighted and expected, Adjusted EBITDA[1] was negatively impacted in the first half of the year by higher distribution costs from the UK and Spanish TV advertising campaigns and the introduction of POC2 on gross gaming revenue in the UK in Q4 2017, resulting in a 4% year-on-year decline.
Significant milestones achieved during the period
There were several significant milestones for the Group during the period. In June we announced the intention to transfer to a Premium Listing on the LSE, providing us with an appropriate platform for continued growth, as well as exposure to a wider investor base and enhanced liquidity in our shares.
Also in June, we paid our final earn-out payment of £58.5 million to the Gamesys group in relation to Botemania, comfortably met from existing cash balances, which now stand at £29.5 million at 30 June 2018. The Group will make two further milestone payments of no more than £10.0 million in aggregate should the Jackpotjoy[7] brands attain certain EBIT targets in the years to March 2019 and March 2020.
Additionally, we were pleased to announce the appointment of Andria Vidler as a non-executive director to the Board at our AGM in June. She will also join the Group's Remuneration Committee. As the chief executive of Centaur Media, a leading business information group, Andria brings a wealth of experience in developing businesses and has a strong track record of creating digital solutions to engage with consumers and drive loyalty.
Outlook for the second half
Looking ahead to the second half of the year, we expect an improvement in Adjusted EBITDA[1] growth year-on-year following the conclusion of the successful TV advertising campaigns and as we pass the anniversary of the introduction of the UK POC2 gross gaming revenue tax. The Group will continue to focus on generating strong cash flow and will use this to deleverage towards and below 2.5x net debt/EBITDA. At this level, our strong cash flow provides us with opportunities to return cash to shareholders.
Conclusion and strategy update
Having delivered consistently strong results since our listing and given continued deleverage of the Group's balance sheet, we intend to announce an update at our 2018 Full Year Results next March that will outline our plans to return cash to shareholders.
As an organisation, we remain committed to delivering a best-in-class customer experience across all verticals that is underpinned by a robust approach to responsible gaming. Additionally, I believe securing a Premium Listing for JPJ Group plc is further proof that we are now a business that operates to the highest standards of corporate governance, and one that is set to continue delivering a fun and safe environment for our customers while generating value for our shareholders.
Neil Goulden
Executive Chairman
Note Regarding Non-IFRS financial measures
The following non-IFRS definitions are used in this release because management believes that they provide additional useful information regarding ongoing operating and financial performance. Readers are cautioned that the definitions are not recognised measures under IFRS, do not have standardised meanings prescribed by IFRS, and should not be considered in isolation or construed to be alternatives to revenues and net income/(loss) and comprehensive income/(loss) for the period determined in accordance with IFRS or as indicators of performance, liquidity or cash flows. Our method of calculating these measures may differ from the method used by other entities. Accordingly, our measures may not be comparable to similarly titled measures used by other entities or in other jurisdictions.
Adjusted EBITDA, as defined by the Group, is income before interest expense including accelerated debt costs and other accretion (net of interest income), income taxes, amortisation and depreciation, share-based compensation, severance costs, realised loss on cross currency swap, fair value adjustments on contingent consideration, transaction related costs, foreign exchange (gain)/loss, and gain on sale of intangible assets. Management believes that Adjusted EBITDA is an important indicator of the issuer's ability to generate liquidity to service outstanding debt and fund acquisition milestone payments and uses this metric for such purpose. The exclusion of share-based compensation eliminates non-cash items and the exclusion of realised loss on cross currency swap, fair value adjustments on contingent consideration, severance costs, transaction related costs, foreign exchange (gain)/loss, and gain on sale of intangible assets eliminates items which management believes are either non-operational and/or non-routine.
Adjusted Net Income, as defined by the Group, means net income plus or minus items of note that management may reasonably quantify and believes will provide the reader with a better understanding of the Group's underlying business performance. Adjusted Net Income is calculated by adjusting net income for accretion on financial liabilities, amortisation of acquisition related purchase price intangibles (including non-compete clauses), share-based compensation, severance costs, realised loss on cross currency swap, fair value adjustments on contingent consideration, transaction related costs, foreign exchange (gain)/loss and gain on sale of intangible assets. The exclusion of accretion on financial liabilities and share-based compensation eliminates the non-cash items and the exclusion of amortisation of acquisition related purchase price intangibles (including non-compete clauses), realised loss on cross currency swap, fair value adjustments on contingent consideration, severance costs, transaction related costs, foreign exchange (gain)/loss, and gain on sale of intangible assets eliminates items which management believes are non-operational and/or non-routine. Adjusted Net Income is considered by some investors and analysts for the purpose of assisting in valuing a company.
Diluted Adjusted Net Income per share, as defined by the Group, means Adjusted Net Income divided by the diluted weighted average number of shares outstanding, calculated using the IFRS treasury method, for the applicable period. Management believes that Diluted Adjusted Net Income per share assists with the Group's ability to analyse Adjusted Net Income on a diluted weighted average per share basis.
Cautionary Note Regarding Forward-Looking Information
This release contains certain information and statements that may constitute 'forward-looking information' (including future-oriented financial information and financial outlooks) within the meaning of applicable laws, including Canadian securities laws. Often, but not always, forward-looking information can be identified by the use of words such as 'plans', 'expects', 'estimates', 'projects', 'predicts', 'targets', 'seeks', 'intends', 'anticipates', 'believes', or 'is confident of' or the negative of such words or other variations of or synonyms for such words, or state that certain actions, events or results 'may', 'could', 'would', 'should', 'might' or 'will' be taken, occur or be achieved. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause actual results, performance, achievements or developments to be materially different from those anticipated by the Group and expressed or implied by the forward-looking statements. Forward-looking information contained in this release includes, but is not limited to, statements with respect to the Group's future financial performance, the future prospects of the Group's business and operations, the Group's growth opportunities and the execution of its growth strategies, the Group's milestone payment obligations, the future performance of the Jackpotjoy segment, the possibility of the Group drawing on the Revolving Facility, and the statements made under the heading 'Outlook' of this release. Certain of these statements may constitute a financial outlook within the meaning of Canadian securities laws. These statements reflect the Group's current expectations related to future events or its future results, performance, achievements or developments, and future trends affecting the Group. All such statements, other than statements of historical fact, are forward-looking information. Such forward-looking information is based on a number of assumptions which may prove to be incorrect, including, but not limited to, the ability of the Group to secure, maintain and comply with all required licences, permits and certifications to carry out business in the jurisdictions in which it currently operates or intends to operate; governmental and regulatory actions, including the introduction of new laws or changes in laws (or the interpretation thereof) related to online gaming; general business, economic and market conditions (including market growth rates and the withdrawal of the UK from the European Union); the Group operating in foreign jurisdictions; the competitive environment; the expected growth of the online gaming market and potential new market opportunities; anticipated and unanticipated costs; the protection of the Group's intellectual property rights; the Group's ability to successfully integrate and realise the benefits of its completed acquisitions, the amount of expected milestone payments required to be made; the Group's continued relationship with the Gamesys group and other third parties; the ability of the Group to service its debt obligations; and the ability of the Group to obtain additional financing, if, as and when required. Such statements could also be materially affected by risks relating to the lack of available and qualified personnel or management; stock market volatility; taxation policies; competition; foreign operations; the Group's limited operating history and the Group's ability to access sufficient capital from internal or external sources. However, whether actual results and developments will conform with the expectations and predictions contained in the forward-looking information is subject to a number of risks and uncertainties, many of which are beyond the Group's control, and the effects of which can be difficult to predict, including that the assumptions outlined above may not be accurate. For a description of additional risk factors, see Schedule 'A' attached to JPJ Group plc's most recently filed annual information form. Although the Group has attempted to identify important factors that could cause actual results, performance, achievements or developments to differ materially from those described in forward-looking statements, there may be other factors that cause actual results, performance, achievements or developments not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results, performance, achievement or developments are likely to differ, and may differ materially, from those expressed in or implied by the forward-looking information contained in this release. Accordingly, readers should not place undue reliance on forward-looking information. While subsequent events and developments may cause the Group's expectations, estimates and views to change, the Group does not undertake or assume any obligation to update or revise any forward-looking information, except as required by applicable securities laws. The forward-looking information contained in this release should not be relied upon as representing the Group's expectations, estimates and views as of any date subsequent to the date of this release. The forward-looking information contained in this release is expressly qualified by this cautionary statement. Investors should not place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might not occur.
Any future-oriented financial information or financial outlooks in this release are based on certain assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities. While the Group considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. These risks, uncertainties and other factors include, but are not limited to: credit, market, currency, operational, liquidity and funding risks, including changes in economic conditions, and interest rates or tax rates.
Financial Review
Total gaming revenue
The Group's total gaming revenue during the three months ended 30 June 2018 consisted of:
- £56.3 million in revenue earned from Jackpotjoy's[7] operational activities.
- £24.2 million in revenue earned from Vera&John's operational activities.
The Group's total gaming revenue during the three months ended 30 June 2017 consisted of:
- £57.8 million in revenue earned from Jackpotjoy's[7] operational activities.
- £17.4 million in revenue earned from Vera&John's operational activities.
The increase in total gaming revenue for the three months ended 30 June 2018 in comparison with the three months ended 30 June 2017 relates primarily to organic growth[8] of the Vera&John segment, where total gaming revenue increased by 39%.
The Group's total gaming revenue during the six months ended 30 June 2018 consisted of:
- £115.8 million in revenue earned from Jackpotjoy's[7] operational activities.
- £45.4 million in revenue earned from Vera&John's operational activities.
The Group's total gaming revenue during the six months ended 30 June 2017 consisted of:
- £113.5 million in revenue earned from Jackpotjoy's[7] operational activities.
- £33.1 million in revenue earned from Vera&John's operational activities.
The increase in total gaming revenue for the six months ended 30 June 2018 in comparison with the six months ended 30 June 2017 relates primarily to organic growth[8] of the Vera&John and Jackpotjoy[7] segments, where total gaming revenue increased by 37% and 2%, respectively.
Costs and expenses
Three month Three month Six month Six month period
period ended period ended period ended ended
30 June 2018 30 June 2017 30 June 2018 30 June 2017
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Distribution costs 39,487 34,302 80,986 65,546
Administrative costs 27,051 27,664 54,823 52,877
Transaction related
costs 1,418 - 1,493 1,315
Severance costs - - 450 -
67,956 61,966 137,752 119,738
Distribution costs
Three month Three month Six month Six month period
period ended period ended period ended ended
30 June 2018 30 June 2017 30 June 2018 30 June 2017
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Selling and marketing 13,298 10,846 27,848 20,449
Licensing fees 11,739 11,826 23,483 22,912
Gaming taxes 10,056 8,469 21,319 16,461
Processing fees 4,394 3,161 8,336 5,724
39,487 34,302 80,986 65,546
Selling and marketing expenses consist of payments made to affiliates and general marketing expenses related to each brand. Licensing fees consist of the fees for the Jackpotjoy[7] segment to operate on its platforms and game suppliers' fees paid by both, Vera&John and Jackpotjoy[7] segments. Gaming taxes largely consist of point of consumption taxes ('POC'), payable in the regulated jurisdictions that the Group operates in. Variance in gaming taxes from prior periods relates to a 15% general betting duty on all free or discounted online bets ('POC2'), which came into effect in the UK in Q4 2017. Processing fees consist of costs associated with using payment providers and include payment service provider transaction and handling costs, as well as deposit and withdrawal fees. With the exception of selling and marketing expenses, distribution costs tend to be variable in relation to revenue.
The increase in distribution costs for the three and six months ended 30 June 2018 compared to the same periods in 2017 is mainly due to higher revenues achieved and increased selling and marketing spending in the Jackpotjoy[7] and Vera&John segments.
Administrative costs
Three month Three month Six month Six month period
period ended period ended period ended ended
30 June 2018 30 June 2017 30 June 2018 30 June 2017
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Compensation and
benefits 8,108 8,016 16,828 16,091
Professional fees 811 797 2,100 2,005
General and
administrative 2,497 2,440 4,697 4,621
Amortisation and
depreciation 15,635 16,411 31,198 30,160
27,051 27,664 54,823 52,877
Compensation and benefits costs consist of salaries, wages, bonuses, directors' fees, benefits and share-based compensation expense. The increase in these expenses for the three and six months ended 30 June 2018 compared to the same periods in 2017 is due to additional staff hired in these periods as well as bonus accruals.
Professional fees consist mainly of legal, accounting and audit fees. These costs remained relatively flat in the three and six months ended 30 June 2018 compared to the same periods in 2017.
General and administrative expenses consist of items, such as rent and occupancy, travel and accommodation, insurance, listing fees, technology and development costs, and other office overhead charges. These costs also remained relatively flat in the three and six months ended 30 June 2018 compared to the same periods in 2017.
Amortisation and depreciation consists of amortisation of the Group's intangible assets and depreciation of the Group's tangible assets over their useful lives. The increase in amortisation and depreciation for the six months ended 30 June 2018 is due to the non-compete clauses for which amortisation started in Q2 2017.
Transaction related costs
Transaction related costs consist of legal, professional, due diligence, other direct costs/fees associated with transactions and acquisitions contemplated or completed, costs associated with the Group's Premium Listing, and the refinancing of the Group's external debt. Q1 2017 transaction related costs also included costs associated with the UK strategic review and implementation of UK-centred strategic initiatives, including the listing of the Group on the London Stock Exchange.
Severance costs
Severance costs during the six months ended 30 June 2018 relate to personnel redundancies resulting from internal restructuring.
Business unit results
Jackpotjoy[7]
Q2 2018 Q2 2017 Variance
GBP(millions) GBP(millions) GBP(millions) Variance %
Gaming revenue 53.6 53.9 (0.3) (1%)
Social gaming revenue 2.7 3.9 (1.2) (31%)
Total gaming revenue 56.3 57.8 (1.5) (3%)
Distribution costs 27.7 26.1 1.6 6%
Administrative costs 4.9 4.4 0.5 11%
Adjusted EBITDA[1] 23.7 27.3 (3.6) (13%)
YTD 2018 YTD 2017 Variance
GBP(millions) GBP(millions) GBP(millions) Variance %
Gaming revenue 110.1 105.1 5.0 5%
Social gaming revenue 5.7 8.4 (2.7) (32%)
Total gaming revenue 115.8 113.5 2.3 2%
Distribution costs 56.5 49.6 6.9 14%
Administrative costs 9.5 8.9 0.6 7%
Adjusted EBITDA[1] 49.8 55.0 (5.2) (9%)
Total gaming revenue for the Jackpotjoy[7] segment for the three months ended 30 June 2018 was 3% lower than in the same period in 2017 due to declines in the Mandalay and social gaming brands. Collectively they accounted for 10% of this segment's revenue. These decreases were partially offset by increases in Starspins and Botemania brands, which accounted for 25% of this segment's revenue.
Total gaming revenue for the six months ended 30 June 2018 was 2% higher than in the same period in 2017 due to organic growth[8] led by increases in the Starspins and Botemania brands. Collectively, they accounted for 25% of this segment's revenue.
The increase in distribution costs for the three and six months ended 30 June 2018 is driven by costs from the segment's TV marketing campaigns, as well as an incremental gaming tax expense, which relates to tax on bonuses through UK POC2 tax introduced in Q4 2017.
Vera&John
Q2 2018 Q2 2017 Variance
GBP(millions) GBP(millions) GBP(millions) Variance %
Total gaming revenue 24.2 17.4 6.8 39%
Distribution costs 11.8 8.3 3.5 42%
Administrative costs 4.0 4.0 - -
Adjusted EBITDA[1] 8.4 5.1 3.3 65%
YTD 2018 YTD 2017 Variance
GBP(millions) GBP(millions) GBP(millions) Variance %
Total gaming revenue 45.4 33.1 12.3 37%
Distribution costs 24.5 15.9 8.6 54%
Administrative costs 8.5 7.7 0.8 10%
Adjusted EBITDA[1] 12.4 9.5 2.9 31%
Total gaming revenue for the Vera&John segment for the three and six months ended 30 June 2018 increased by 39% and 37%, respectively, compared to the same periods in 2017 due to a combination of organic growth[8] and period-over-period GBP to EUR exchange rate movement. On a constant currency basis, revenue increased by 36% and 34% in the three and six months ended 30 June 2018 compared to the same periods in 2017. Constant currency amounts are calculated by applying the same EUR to GBP average exchange rates to both current and prior year comparative periods.
Distribution costs increased by 42% and 54%, respectively, for the three and six months ended 30 June 2018 compared to the same periods in 2017 as a result of higher marketing spending in the current period. The increase was further driven by higher gaming tax due to increased revenue in regulated jurisdictions compared to the prior period.
The increase in administrative costs for the six months ended 30 June 2018 compared to the same period in 2017 was mainly driven by increases in personnel costs as the segment continues to grow.
Unallocated Corporate Costs
Adjusted EBITDA[1] on Unallocated Corporate Costs increased from (£2.5) million to (£2.3) million in the three months ended 30 June 2018 as compared to the three months ended 30 June 2017. The variance mainly relates to a £0.1 million decrease in general and administrative overhead costs and a £0.1 million decrease in professional fees.
Adjusted EBITDA[1] on Unallocated Corporate Costs was flat for the six months ended 30 June 2018 compared to the six months ended 30 June 2017.
Net loss on Unallocated Corporate costs decreased from £20.5 million to £9.3 million in the three months ended 30 June 2018 as compared to the three months ended 30 June 2017. This decrease is primarily related to lower interest expense incurred as a result of the debt refinance that took place in Q4 2017. The decrease in net loss can further be attributed to the fact that there were no fair value adjustments on contingent consideration in the current period as the earn-out period ended in Q1 2018.
Net loss on Unallocated Corporate Costs decreased from £55.2 million to £30.5 million in the six months ended 30 June 2018 as compared to the six months ended 30 June 2017. This decrease is primarily related to lower interest expense incurred as a result of the debt refinance that took place in Q4 2017. The decrease in net loss can further be attributed to the fact that there were no fair value adjustments on contingent consideration in Q2 2018 as the earn-out period ended in Q1 2018.
Costs included in net loss which are excluded from the Adjusted EBITDA[1] measure are discussed on page 6 of this release.
Key performance indicators
Average Active Customers is a key performance indicator used by management to assess real money customer acquisition and real money customer retention efforts of each of the Group's brands. The Group defines Average Active Customers ('Average Active Customers') as being real money customers who have placed at least one bet in a given month. 'Average Active Customers per Month' is the Average Active Customers per month, averaged over a twelve-month period. While this measure is not recognised by IFRS, management believes that it is a meaningful indicator of the Group's ability to acquire and retain customers.
Total Real Money Gaming Revenue and Average Real Money Gaming Revenue per Month are key performance indicators used by management to assess revenue earned from real money gaming operations of the business. The Group defines Total Real Money Gaming Revenue ('Total Real Money Gaming Revenue') as revenue less revenue earned from affiliate websites and social gaming. The Group defines Average Real Money Gaming Revenue per Month ('Average Real Money Gaming Revenue per Month') as Real Money Gaming Revenue per month, averaged over a twelve-month period. While these measures are not recognised by IFRS, management believes that they are meaningful indicators of the Group's real money gaming operational results.
Monthly Real Money Gaming Revenue per Average Active Customer is a key performance indicator used by management to assess the Group's ability to generate Real Money Gaming Revenue on a per customer basis. The Group defines Monthly Real Money Gaming Revenue per Average Active Customer ('Monthly Real Money Gaming Revenue per Average Active Customer') as being Average Real Money Gaming Revenue per Month divided by Average Active Customers per Month. While this measure is not recognised by IFRS, management believes that it is a meaningful indicator of the Group's ability to generate Total Real Money Gaming Revenue.
Twelve Twelve
months ended months ended
30 June 2018 30 June 2017 Variance Variance %
Average Active Customers per Month (#) 259,861 243,896 15,965 7%
Total Real Money Gaming Revenue
(GBP000's) [(1)] 299,779 261,707 38,072 15%
Average Real Money Gaming Revenue per
Month (GBP000's) 24,982 21,809 3,173 15%
Monthly Real Money Gaming Revenue per
Average Active Customer (GBP) 96 89 7 8%
[(1)]Total Real Money Gaming Revenue for the twelve months ended 30 June 2018 consists of total revenue less revenue earned from affiliate websites and social gaming revenue of £19.4 million (30 June 2017 - £24.2 million).
Monthly Real Money Gaming Revenue per Average Active Customer[6] increased by 8% year-over-year which is in line with the Group's overall customer acquisition and retention strategy.
Principal risks and uncertainties
Details of the Group's principal risks were set out on pages 20 to 25 of the Annual Report for the year ended 31 December 2017 (the '2017 Annual Report'). As at 30 June 2018, the directors have reviewed the Group's risk profile in the context of current market conditions and the outlook for the remaining six months of the financial year. In addition, they have reconsidered previous statements made on risk appetite, risk governance and internal controls and do not consider there to be any significant changes since the 2017 Annual Report.
Directors' responsibility statement in respect of the half yearly financial report
For the six months ended 30 June 2018
We confirm to the best of our knowledge that:
- The condensed interim set of financial statements has been prepared in accordance with IAS 34 ̶ Interim Financial Reporting as adopted by the European Union;
- The Interim Report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
- The Interim Report includes a fair review of the information required by DTR 4.2.8 R (disclosure of related parties' transactions and changes therein).
Signed by order of the Board of Directors
Neil Goulden
Executive Chairman
14 August 2018
Independent review report to JPJ Group plc
Introduction
We have been engaged by the company to review the condensed set of financial statements in the interim financial report for the three and six months ended 30 June 2018 which comprises the Interim Condensed Consolidated Statement of Comprehensive Income, Interim Condensed Consolidated Balance Sheet, Interim Condensed Consolidated Statement of Changes in Equity, Interim Condensed Consolidated Statement of Cash Flows and the related notes.
We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The interim financial report for the three and six months ended 30 June 2018 is the responsibility of and has been approved by the directors. With regard to the six months ended 30 June 2018, the directors are responsible for preparing the interim financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, '‘Interim Financial Reporting'’, as issued by the International Accounting Standards Board and International Accounting Standard 34, '‘Interim Financial Reporting'’, as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the interim financial report based on our review.
Our report has been prepared in accordance with the terms of our engagement, and, with regard to the six months ended 30 June 2018, to assist the company in meeting its responsibilities in respect of interim financial reporting in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410, '‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity'’ as issued by the International Auditing and Assurance Standards Board and International Standard on Review Engagements (UK and Ireland) 2410, '‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity'’, issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing or International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the three and six months ended 30 June 2018 is not prepared, in all material respects, in accordance with International Accounting Standard 34, as issued by the International Accounting Standards Board, International Accounting Standard 34, as adopted by the European Union, and, in respect of the six months ended 30 June 2018, the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
BDO LLP
Chartered Accountants
London
14 August 2018
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Three Six Six
months months months months
ended ended ended ended
30 June 30 June 30 June 30 June
2018 2017 2018 2017
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Gaming revenue[4] 77,728 71,316 155,443 138,205
Social gaming revenue[4] 2,738 3,877 5,695 8,364
Total gaming revenue 80,466 75,193 161,138 146,569
Costs and expenses
Distribution costs[4],[5] 39,487 34,302 80,986 65,546
Administrative costs[5] 27,051 27,664 54,823 52,877
Severance costs[4] - - 450 -
Transaction related costs[4] 1,418 - 1,493 1,315
Foreign exchange (gain)/loss[4] (285) 4,766 125 6,899
Total costs and expenses 67,671 66,732 137,877 126,637
Gain on sale of intangible assets - - - (1,002)
Fair value adjustments on
contingent consideration[15] - 1,845 11,450 14,701
Realised loss on cross currency swap - - - 3,534
Interest income[6] (85) (57) (170) (95)
Interest expense[6] 4,950 7,720 9,889 15,667
Accretion on financial liabilities[6] 489 3,662 2,026 7,051
Financing expenses 5,354 13,170 23,195 40,858
Net income/(loss) for
the period before taxes 7,441 (4,709) 66 (19,924)
Current tax provision 228 168 699 359
Deferred tax recovery (98) (105) (197) (210)
Net income/(loss) for the period
attributable to owners of the parent 7,311 (4,772) (436) (20,073)
Other comprehensive income/(loss): Items
that will or may be reclassified to
profit or loss in subsequent periods
Foreign currency translation gain 1,081 13,088 198 18,643
Unrealised loss on cross currency hedge - (4,032) - (4,845)
Unrealised loss on interest rate hedge[10] (559) - (974) -
Total comprehensive income/(loss) for the
period attributable to owners of the parent 7,833 4,284 (1,212) (6,275)
Net income/(loss) for the period per share
Basic[7] GBP0.10 GBP(0.06) GBP(0.01) GBP(0.27)
Diluted[7] GBP0.10 GBP(0.06) GBP(0.01) GBP(0.27)
See accompanying notes
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
As at As at
30 June 2018 31 December 2017
ASSETS (GBP000's) (GBP000's)
Current assets
Cash[15] 29,462 59,033
Restricted cash[15] 195 208
Customer deposits[15] 8,677 8,180
Trade and other receivables[8] 16,100 19,379
Taxes receivable 6,719 6,432
Total current assets 61,153 93,232
Tangible assets 1,243 1,339
Intangible assets[11] 263,737 292,223
Goodwill[11] 296,976 296,781
Other long-term receivables[9],[15] 5,078 5,604
Total non-current assets 567,034 595,947
Total assets 628,187 689,179
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities[12] 14,646 17,821
Other short-term payables[10],[13],[15] 10,048 12,151
Interest payable[15] 675 924
Payable to customers[15] 8,677 8,180
Convertible debentures[17] - 254
Current portion of contingent consideration[15] 4,463 51,866
Provision for taxes 5,390 7,273
Total current liabilities 43,899 98,469
Contingent consideration[15] 4,170 7,717
Other long-term payables[10],[15],[16] 5,482 8,245
Deferred tax liability 1,361 1,204
Long-term debt[14],[15] 369,519 369,487
Total non-current liabilities 380,532 386,653
Total liabilities 424,431 485,122
Equity
Share capital[17] 7,427 7,407
Share premium and other reserves 196,329 196,650
Total equity 203,756 204,057
Total liabilities and equity 628,187 689,179
See accompanying notes
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share-
Redee Based Transl Retained
Share Share Merger mable Payment ation Hedge (Deficit)/
Capital Premium Reserve Shares Reserve Reserve Reserve Earnings Total
(GBP (GBP (GBP (GBP (GBP (GBP (GBP (GBP (GBP
000's) 000's) 000's) 000's) 000's) 000's) 000's) 000's) 000's)
Balance at 1
January 2017 7,298 403,883 (6,111) 50 8,667 (3,958) - (170,361) 239,468
Comprehensive
income/(loss)
for the period:
Net loss for
the period - - - - - - - (20,073) (20,073)
Other
comprehensive
income/(loss) - - - - - 18,643 (4,845) - 13,798
Total
comprehensive
income/(loss)
for the
period: - - - - - 18,643 (4,845) (20,073) (6,275)
Contributions
by and distri-
butions
to sharehol-
ders:
Conversion
of
debentures 75 2,263 - - - - - - 2,338
Exercise of
options 15 462 - - (105) - - - 372
Cancellation
of redeemable
shares - - - (50) - - - - (50)
Cancellation
of share
premium[2] - (405,932) - - - - - 405,932 -
Share-based
compensation - - - - 878 - - - 878
Total
contributions
by and
distributions
to
shareholders: 90 (403,207) - (50) 773 - - 405,932 3,538
Balance at
30 June 2017 7,388 676 (6,111) - 9,440 14,685 (4,845) 215,498 236,731
Balance at 1
January 2018 7,407 1,342 (6,111) - 9,971 23,649 - 167,799 204,057
Comprehensive
income/(loss)
for the period:
Net loss for
the period - - - - - - - (436) (436)
Other
comprehensive
income/(loss) - - - - - 198 (974) - (776)
Total
comprehensive
income/(loss)
for the
period: - - - - - 198 (974) (436) (1,212)
Contributions
by and
distributions
to
shareholders:
Conversion of
debentures
[17] 6 186 - - - - - - 192
Exercise of
options[17] 14 379 - - (110) - - 110 393
Share-based
compensation
[17] - - - - 326 - - - 326
Total
contributions
by and
distributions
to
shareholders: 20 565 - - 216 - - 110 911
Balance at 30
June 2018 7,427 1,907 (6,111) - 10,187 23,847 (974) 167,473 203,756
See accompanying notes
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Three Six Six
months months months months
ended ended ended ended
30 June 30 June 30 June 30 June
2018 2017 2018 2017
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Operating activities
Net income/(loss) for the period 7,311 (4,772) (436) (20,073)
Add (deduct) items not involving cash
Amortisation and depreciation 15,635 16,411 31,198 30,160
Share-based compensation expense[17] 170 353 326 878
Current tax provision 228 168 699 359
Deferred tax recovery (98) (105) (197) (210)
Interest expense, net[6] 5,354 11,325 11,745 22,623
Gain on sale of intangible assets - - - (1,002)
Fair value adjustments on contingent
consideration[15] - 1,845 11,450 14,701
Realised loss on cross currency swap - - - 3,534
Foreign exchange (gain)/loss (285) 4,766 125 6,899
28,315 29,991 54,910 57,869
Trade and other receivables 2,061 (1,012) 1,821 (525)
Other long-term receivables 328 468 508 452
Accounts payable and accrued liabilities (2,697) (415) (3,322) (1,844)
Other short-term payables (620) 130 (2,103) (3,542)
Cash generated from operations 27,387 29,162 51,814 52,410
Income taxes paid (3,236) (6,871) (3,326) (6,899)
Incomes taxes received 402 - 402 102
Total cash provided by operating activities 24,553 22,291 48,980 45,613
Financing activities
Restriction of cash balances - 154 (75) 175
Proceeds from exercise of options - 109 393 372
Proceeds from cross currency
swap settlement - - - 34,373
Debenture settlement[17] (62) - (62) -
Repayment of non-compete liability[16] (2,000) (1,333) (4,000) (1,333)
Interest repayment (5,328) (7,659) (10,254) (15,209)
Payment of contingent consideration[15] (63,455) (94,218) (63,455) (94,218)
Principal payments made
on long-term debt[14] - (6,510) - (12,806)
Total cash used in financing activities (70,845) (109,457) (77,453) (88,646)
Investing activities
Purchase of tangible assets (89) (252) (163) (763)
Purchase of intangible assets (1,370) (713) (2,457) (1,262)
Proceeds from sale of intangible assets - - 1,450 1,002
Total cash used in investing activities (1,459) (965) (1,170) (1,023)
Net decrease in cash during the period (47,751) (88,131) (29,643) (44,056)
Cash, beginning of period 76,231 112,297 59,033 68,485
Exchange gain/(loss) on cash
and cash equivalents 982 (203) 72 (466)
Cash, end of period 29,462 23,963 29,462 23,963
See accompanying notes
SUPPLEMENTARY NOTES FOR THREE AND SIX MONTHS ENDED 30 JUNE 2018
1. Corporate information
JPJ Group plc, formerly Jackpotjoy plc, is an online gaming holding company that was incorporated under the Companies Act 2006 (England and Wales) on 29 July 2016. On 27 June 2018, Jackpotjoy plc changed its name to JPJ Group plc. JPJ Group plc's registered office is located at 35 Great St. Helen's, London, United Kingdom. Unless the context requires otherwise, use of 'Group' in these accompanying notes means JPJ Group plc and its subsidiaries, as applicable.
The Group currently offers bingo, casino and other games to its customers using the Jackpotjoy, Starspins, Botemania, Vera&John, Costa Bingo, InterCasino, and other brands. The Jackpotjoy, Starspins, and Botemania brands operate off proprietary software owned by the Gamesys group, the Group's principal B2B software and support provider. The Vera&John and InterCasino brands operate off proprietary software owned by the Group. The Costa Bingo and related brands operate off the Dragonfish platform, a software service provided by the 888 group.
These Unaudited Interim Condensed Consolidated Financial Statements were authorised for issue by the Board of Directors of JPJ Group plc on 14 August 2018.
2. Basis of preparation
Basis of presentation
These Unaudited Interim Condensed Consolidated Financial Statements have been prepared by management on a going concern basis, are presented in compliance with International Accounting Standard ('IAS') 34 - Interim Financial Reporting, and have been prepared on a basis consistent with the accounting policies and methods used and disclosed in JPJ Group plc's consolidated financial statements for the year ended 31 December 2017 (the 'Annual Financial Statements'), except as described below. Certain information and disclosures normally included in the Annual Financial Statements prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union, and in accordance with IFRS as issued by the International Accounting Standards Board, have been omitted or condensed.
These Unaudited Interim Condensed Consolidated Financial Statements should be read in conjunction with the Annual Financial Statements. All defined terms used herein are consistent with those terms as defined in the Annual Financial Statements.
These Unaudited Interim Condensed Consolidated Financial Statements have been prepared under the historical cost convention, other than for the measurement at fair value of the Group's Interest Rate Swap (as defined in note 10), contingent consideration, certain hedged loan instruments, and loan receivable.
On 1 February 2017, having been approved in the High Court, the Group's share premium was cancelled. Accordingly, the balance has been reallocated within equity reserves to the Group's retained earnings account. This is now shown in the Unaudited Interim Condensed Consolidated Statements of Changes in Equity as an adjustment to the balances on the Group's equity reserves at 30 June 2017. There is no impact on the income statement, earnings per share or total equity.
The comparative financial information for the year ended 31 December 2017 in these Unaudited Interim Condensed Consolidated Financial Statements does not constitute statutory accounts for that year. The auditors' report on the statutory accounts for the year ended 31 December 2017 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under sections 498(2) or 498(3) of the Companies Act 2006.
Basis of consolidation
JPJ Group plc's Unaudited Interim Condensed Consolidated Financial Statements consolidate the parent company and all of its subsidiaries. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. All transactions and balances between companies are eliminated on consolidation.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which JPJ Group plc obtains control, and continue to be consolidated until the date that such control ceases.
Intercompany transactions, balances, income and expenses on transactions between JPJ Group plc's subsidiaries are eliminated. Profit and losses resulting from intercompany transactions that are recognised in assets are also eliminated.
3. Summary of significant accounting policies
For a description of the Group's significant accounting policies, critical accounting estimates and assumptions, and related information see note 3 to the Annual Financial Statements. Other than as described below, there have been no changes to the Group's significant accounting policies or critical accounting estimates and assumptions during the six months ended 30 June 2018.
Financial instruments
Effective from 1 January 2018, the Group adopted IFRS 9 - Financial Instruments: Recognition and Measurement ('IFRS 9') to account for the Gaming Realms Transaction (as defined in note 9). As a result, the Group no longer separates the embedded derivative from its host contract and the entire asset is measured at fair value through profit or loss. The adoption of IFRS 9 resulted in balances shown as other long-term receivables and other long-term assets at 31 December 2017 being combined into a single figure and shown as other long-term receivables at 30 June 2018.
Hedge accounting
The Group elected to use hedge accounting for the purposes of recognising realised and unrealised gains and losses associated with the Interest Rate Swap, in accordance with guidance provided in IFRS 9.
IFRS 9 permits hedge accounting under certain circumstances provided that the hedging relationship is:
- Formally designated and documented, including the entity's risk management objective and strategy for undertaking the hedge, identification of the hedging instrument, the hedged item, the nature of the risk being hedged, and how the entity will assess the hedging instrument's effectiveness;
- Expected to be highly effective in achieving offsetting changes in fair value or cash flows attributable to the hedged risk as designated and documented, and effectiveness can be reliably measured; and
- Assessed on an ongoing basis and determined to have been highly effective.
Based on the Group's analysis of the requirements outlined above, it was concluded that the Interest Rate Swap meets all the necessary criteria and qualifies for use of hedge accounting. The Interest Rate Swap was designated as a cash flow hedge.
Impairment policy
In accordance with IFRS 9, the Group reviewed its impairment policy and concluded that no impairment provision on its financial instruments, as discussed in note 15, is required. The Group uses the credit loss model to assess impairment.
Revenue recognition
Effective from 1 January 2018, the Group adopted IFRS 15 - Revenue from Contracts with Customers ('IFRS 15'), which replaces IAS 18 - Revenue. Applying this standard did not impact the Group's financial information as the Group's policy was already in compliance with the key principles outlined in IFRS 15.
4. Segment information
In March 2018, the Group determined that its reportable operating segments had changed such that the Mandalay segment was aggregated with the Jackpotjoy segment with effect from 1 January 2018, as Mandalay no longer met the criteria for a reportable operating segment, set out in IFRS 8 - Operating Segments. Mandalay was therefore aggregated with the Jackpotjoy segment consistent with the Group's other third-party platform hosted operations and all 2017 comparative segment figures have been restated accordingly.
The following tables present selected financial results for each segment and the Unallocated Corporate Costs:
Three months ended 30 June 2018:
Unallocated
Corporate
Jackpotjoy Vera&John Costs Total
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Gaming revenue 53,549 24,179 - 77,728
Social gaming revenue 2,738 - - 2,738
Total gaming revenue 56,287 24,179 - 80,466
Distribution costs 27,701 11,763 23 39,487
Amortisation and depreciation 13,074 2,464 97 15,635
Compensation, professional, and
general and administrative
expenses 4,909 4,041 2,466 11,416
Transaction related costs - - 1,418 1,418
Foreign exchange loss/(gain) 11 (180) (116) (285)
Financing, net 1 (30) 5,383 5,354
Income/(loss) for the period
before taxes 10,591 6,121 (9,271) 7,441
Taxes - 130 - 130
Net income/(loss) for the
period 10,591 5,991 (9,271) 7,311
Net income/(loss) for the
period 10,591 5,991 (9,271) 7,311
Interest expense/(income), net 1 (30) 4,894 4,865
Accretion on financial
liabilities - - 489 489
Taxes - 130 - 130
Amortisation and depreciation 13,074 2,464 97 15,635
EBITDA 23,666 8,555 (3,791) 28,430
Share-based compensation - - 170 170
Transaction related costs - - 1,418 1,418
Foreign exchange loss/(gain) 11 (180) (116) (285)
Adjusted EBITDA 23,677 8,375 (2,319) 29,733
Net income/(loss) for the
period 10,591 5,991 (9,271) 7,311
Share-based compensation - - 170 170
Transaction related costs - - 1,418 1,418
Foreign exchange loss/(gain) 11 (180) (116) (285)
Amortisation of acquisition
related purchase price
intangibles 13,057 1,967 - 15,024
Accretion on financial
liabilities - - 489 489
Adjusted net income/(loss) 23,659 7,778 (7,310) 24,127
Six months ended 30 June 2018:
Unallocated
Corporate
Jackpotjoy Vera&John Costs Total
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Gaming revenue 110,093 45,350 - 155,443
Social gaming revenue 5,695 - - 5,695
Total gaming revenue 115,788 45,350 - 161,138
Distribution costs 56,511 24,450 25 80,986
Amortisation and depreciation 26,147 4,862 189 31,198
Compensation, professional, and
general and administrative
expenses 9,488 8,549 5,588 23,625
Severance costs - 450 - 450
Transaction related costs - - 1,493 1,493
Foreign exchange loss/(gain) 213 (70) (18) 125
Financing, net 3 (66) 23,258 23,195
Income/(loss) for the period
before taxes 23,426 7,175 (30,535) 66
Taxes - 488 14 502
Net income/(loss) for the
period 23,426 6,687 (30,549) (436)
Net income/(loss) for the
period 23,426 6,687 (30,549) (436)
Interest expense/(income), net 3 (66) 9,782 9,719
Accretion on financial
liabilities - - 2,026 2,026
Taxes - 488 14 502
Amortisation and depreciation 26,147 4,862 189 31,198
EBITDA 49,576 11,971 (18,538) 43,009
Share-based compensation - - 326 326
Severance costs - 450 - 450
Fair value adjustments on
contingent consideration - - 11,450 11,450
Transaction related costs - - 1,493 1,493
Foreign exchange loss/(gain) 213 (70) (18) 125
Adjusted EBITDA 49,789 12,351 (5,287) 56,853
Net income/(loss) for the
period 23,426 6,687 (30,549) (436)
Share-based compensation - - 326 326
Severance costs - 450 - 450
Fair value adjustments on
contingent consideration - - 11,450 11,450
Transaction related costs - - 1,493 1,493
Foreign exchange loss/(gain) 213 (70) (18) 125
Amortisation of acquisition
related purchase price
intangibles 26,114 3,945 - 30,059
Accretion on financial
liabilities - - 2,026 2,026
Adjusted net income/(loss) 49,753 11,012 (15,272) 45,493
Three months ended 30 June 2017:
Unallocated
Corporate
Jackpotjoy Vera&John Costs Total
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Gaming revenue 53,904 17,412 - 71,316
Social gaming revenue 3,877 - - 3,877
Total gaming revenue 57,781 17,412 - 75,193
Distribution costs 26,008 8,278 16 34,302
Amortisation and depreciation 13,852 2,465 94 16,411
Compensation, professional, and
general and administrative
expenses 4,430 4,024 2,799 11,253
Foreign exchange (gain)/loss (67) 419 4,414 4,766
Financing, net 1 (53) 13,222 13,170
Income/(loss) for the period
before taxes 13,557 2,279 (20,545) (4,709)
Taxes - 63 - 63
Net income/(loss) for the
period 13,557 2,216 (20,545) (4,772)
Net income/(loss) for the
period 13,557 2,216 (20,545) (4,772)
Interest expense/(income), net 1 (53) 7,715 7,663
Accretion on financial
liabilities - - 3,662 3,662
Taxes - 63 - 63
Amortisation and depreciation 13,852 2,465 94 16,411
EBITDA 27,410 4,691 (9,074) 23,027
Share-based compensation - - 353 353
Fair value adjustments on
contingent consideration - - 1,845 1,845
Foreign exchange (gain)/loss (67) 419 4,414 4,766
Adjusted EBITDA 27,343 5,110 (2,462) 29,991
Net income/(loss) for the
period 13,557 2,216 (20,545) (4,772)
Share-based compensation - - 353 353
Fair value adjustments on
contingent consideration - - 1,845 1,845
Foreign exchange (gain)/loss (67) 419 4,414 4,766
Amortisation of acquisition
related purchase price
intangibles 13,837 2,105 - 15,942
Accretion on financial
liabilities - - 3,662 3,662
Adjusted net income/(loss) 27,327 4,740 (10,271) 21,796
Six months ended 30 June 2017:
Unallocated
Corporate
Jackpotjoy Vera&John Costs Total
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Gaming revenue 105,102 33,103 - 138,205
Social gaming revenue 8,364 - - 8,364
Total gaming revenue 113,466 33,103 - 146,569
Distribution costs 49,562 15,926 58 65,546
Amortisation and depreciation 25,135 4,833 192 30,160
Compensation, professional, and
general and administrative
expenses 8,876 7,684 6,157 22,717
Transaction related costs - - 1,315 1,315
Foreign exchange (gain)/loss (87) 478 6,508 6,899
Gain on sale of intangible
assets - (1,002) - (1,002)
Financing, net 2 (87) 40,943 40,858
Income/(loss) for the period
before taxes 29,978 5,271 (55,173) (19,924)
Taxes - 149 - 149
Net income/(loss) for the
period 29,978 5,122 (55,173) (20,073)
Net income/(loss) for the
period 29,978 5,122 (55,173) (20,073)
Interest expense/(income), net 2 (87) 15,657 15,572
Accretion on financial
liabilities - - 7,051 7,051
Taxes - 149 - 149
Amortisation and depreciation 25,135 4,833 192 30,160
EBITDA 55,115 10,017 (32,273) 32,859
Share-based compensation - - 878 878
Fair value adjustments on
contingent consideration - - 14,701 14,701
Realised loss on cross currency
swap - - 3,534 3,534
Transaction related costs - - 1,315 1,315
Gain on sale of intangible
assets - (1,002) - (1,002)
Foreign exchange (gain)/loss (87) 478 6,508 6,899
Adjusted EBITDA 55,028 9,493 (5,337) 59,184
Net income/(loss) for the
period 29,978 5,122 (55,173) (20,073)
Share-based compensation - - 878 878
Fair value adjustments on
contingent consideration - - 14,701 14,701
Realised loss on cross currency
swap - - 3,534 3,534
Transaction related costs - - 1,315 1,315
Gain on sale of intangible
assets - (1,002) - (1,002)
Foreign exchange (gain)/loss (87) 478 6,508 6,899
Amortisation of acquisition
related purchase price
intangibles 25,120 4,212 - 29,332
Accretion on financial
liabilities - - 7,051 7,051
Adjusted net income/(loss) 55,011 8,810 (21,186) 42,635
The following table presents net assets per segment and Unallocated Corporate Costs as at 30 June 2018:
Unallocated
Corporate
Jackpotjoy Vera&John Costs Total
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Current assets 16,796 29,981 14,376 61,153
Goodwill 240,960 56,016 - 296,976
Other non-current assets 228,666 29,130 12,262 270,058
Total assets 486,422 115,127 26,638 628,187
Current liabilities 9,806 17,098 16,995 43,899
Non-current liabilities - 1,361 379,171 380,532
Total liabilities 9,806 18,459 396,166 424,431
Net assets 476,616 96,668 (369,528) 203,756
The following table presents net assets per segment and Unallocated Corporate Costs as at 31 December 2017:
Unallocated
Corporate
Jackpotjoy Vera&John Costs Total
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Current assets 20,960 41,970 30,302 93,232
Goodwill 240,960 55,821 - 296,781
Other non-current assets 249,703 31,878 17,585 299,166
Total assets 511,623 129,669 47,887 689,179
Current liabilities 10,958 19,877 67,634 98,469
Non-current liabilities - 1,204 385,449 386,653
Total liabilities 10,958 21,081 453,083 485,122
Net assets 500,665 108,588 (405,196) 204,057
During the six months ended 30 June 2018 and 2017, substantially all of the revenue earned by the Group was in Europe. Revenue was earned from customers located in the following locations: United Kingdom - 60% (six months ended 30 June 2017 - 64%), Sweden - 8% (six months ended 30 June 2017 - 10%), rest of Europe - 17% (six months ended 30 June 2017 - 13%), rest of world - 15% (six months ended 30 June 2017 - 13%).
Non-current assets by geographical location as at 30 June 2018 were as follows: Europe £85.1 million (31 December 2017 - £87.7 million) and Americas £481.9 million (31 December 2017 - £508.2 million).
5. Costs and expenses
Three months Three months Six months Six months
ended ended ended ended
30 June 2018 30 June 2017 30 June 2018 30 June 2017
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Distribution costs:
Selling and marketing 13,298 10,846 27,848 20,449
Licensing fees 11,739 11,826 23,483 22,912
Gaming taxes 10,056 8,469 21,319 16,461
Processing fees 4,394 3,161 8,336 5,724
39,487 34,302 80,986 65,546
Administrative costs:
Compensation and benefits 8,108 8,016 16,828 16,091
Professional fees 811 797 2,100 2,005
General and administrative 2,497 2,440 4,697 4,621
Tangible asset depreciation 137 111 261 184
Intangible asset amortisation 15,498 16,300 30,937 29,976
27,051 27,664 54,823 52,877
6. Interest income/expense
Three months Three months Six months Six months
ended ended ended ended
30 June 2018 30 June 2017 30 June 2018 30 June 2017
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Interest earned on cash held
during the period 31 57 65 95
Interest earned on long-term
loan receivable 54 - 105 -
Total interest income 85 57 170 95
Interest paid and accrued on
long-term debt 4,947 7,702 9,883 15,627
Interest paid and accrued on
convertible debentures 3 18 6 40
Total interest expense 4,950 7,720 9,889 15,667
Accretion of discount recognised
on contingent consideration 32 2,365 1,055 4,468
Interest accretion recognised on
convertible debentures - 12 8 30
Debt issue costs and accretion
recognised on long-term debt 143 777 282 1,560
Interest accretion recognised on
other long-term liabilities 314 508 681 993
Total accretion on financial
liabilities 489 3,662 2,026 7,051
7.Earnings per share
The following table presents the calculation of basic and diluted earnings per share:
Three months Three months Six months Six months
ended ended ended ended
30 June 2018 30 June 2017 30 June 2018 30 June 2017
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Numerator:
Net income/(loss) -
basic 7,311 (4,772) (436) (20,073)
Net income/(loss) -
diluted[1] 7,311 (4,772) (436) (20,073)
Denominator:
Weighted average number
of shares outstanding -
basic 74,259 73,785 74,177 73,680
Weighted average number
of shares outstanding -
diluted[1] 74,992 73,785 74,177 73,680
Instruments, which are
anti-dilutive:
Weighted average effect
of dilutive share options - 401 740 391
Weighted average effect
of convertible
debentures[2] - 312 39 399
Net income/(loss) per
share[3],[4]
Basic GBP0.10 GBP(0.06) GBP(0.01) GBP(0.27)
Diluted[1] GBP0.10 GBP(0.06) GBP(0.01) GBP(0.27)
[
1
]
In the case of a net loss, the effect of share options potentially exercisable on diluted loss per share will be anti-dilutive; therefore, basic and diluted net loss per share will be the same.
[2] An assumed conversion of convertible debentures had an anti-dilutive effect on loss per share for the six months ended 30 June 2018 and the three and six months ended 30 June 2017.
[3] Basic income/(loss) per share is calculated by dividing the net income/(loss) attributable to common shareholders by the weighted average number of shares outstanding during the period.
[4] Diluted income per share is calculated by dividing the net income attributable to ordinary shareholders by the weighted average number of shares outstanding during the period and adjusted for the number of potentially dilutive share options and contingently issuable instruments.
8. Trade and other receivables
Trade and other receivables consist of the following items:
30 June 2018 31 December 2017
(GBP000's) (GBP000's)
Due from the Gamesys group 8,047 8,634
Due from the 888 group 1,739 3,101
B2B and affiliate revenue receivable 3,464 2,481
Receivable for intangible assets sold - 1,450
Prepaid expenses 2,289 2,375
Other 561 1,338
16,100 19,379
9. Other long-term receivables
On 29 November 2017, the Group entered into a secured convertible loan and services agreement with Gaming Realms plc ('Gaming Realms') (the 'Gaming Realms Transaction').
Key terms of the Gaming Realms Transaction include: (a) five-year secured convertible loan to Gaming Realms in the principal amount of £3.5 million with an interest rate of 3 month UK LIBOR plus 5.5% per annum; (b) conversion option that allows the Group to convert some or all of the loan (in tranches of £0.5 million) into ordinary shares of Gaming Realms after 12 months; (c) a ten-year services agreement ('Services Agreement') for the supply by Gaming Realms of some of its content to websites of the Group's choosing free-of-charge. The value of the free-of-charge services provided under this Services Agreement will be capped at £3.5 million over the first five years of the agreement, at which point the provision of free-of-charge services will cease.
In connection with this transaction, the Group recognised a long-term receivable of £3.5 million for the secured convertible loan, in accordance with IFRS 9, based on the calculation of fair value at 30 June 2018, as explained in note 15.
10. Interest rate swap
On 16 February 2018, JPJ Group plc entered into an interest rate swap agreement (the 'Interest Rate Swap') in order to minimise the Group's exposure to interest rate fluctuations. The Interest Rate Swap has an effective date of 15 March 2018 (the 'Effective Date') and an expiry date of 15 March 2023. Under this agreement, JPJ Group plc will pay a fixed 6.439% rate of interest in place of floating GBP interest payments of GBP LIBOR plus 5.25%. The fixed interest rate will be paid on 60% of the GBP Term Facility (£150.0 million - the 'Notional Amount') to start. The Notional Amount will decrease by £30.0 million every 12 months from the Effective Date. The Interest Rate Swap was designated as a cash flow hedge, as described in note 3.
As at 30 June 2018, the fair value of the Interest Rate Swap was a £0.7 million payable (31 December 2017 - £nil). The Group has included £0.1 million of this payable in current liabilities, as shown in note 13 (31 December 2017 - £nil), with the value of the remaining balance, being £0.6 million (31 December 2017 - £nil), included in other long-term payables.
11. Intangible assets
As at 30 June 2018
Customer
Gaming relationsh Brand Partnership Non-compete Total
licences ips (GB Software (GBP agreements clauses Goodwill (GBP
(GBP000's) P000's) (GBP000's) 000's) (GBP000's) (GBP000's)(GBP000's) 000's)
Cost
Balance, 1
January 2018 93 337,655 25,211 70,019 12,900 20,434 316,386 782,698
Additions - - 2,206 - - - - 2,206
Translation (5) 17 177 66 - - 650 905
Balance, 30
June 2018 88 337,672 27,594 70,085 12,900 20,434 317,036 785,809
Accumulated
amortisation
/impairment
Balance, 1
January 2018 81 139,333 12,551 10,005 4,458 7,661 19,605 193,694
Amortisation 22 20,651 2,599 1,747 811 5,107 - 30,937
Translation (58) 42 7 19 - - 455 465
Balance, 30
June 2018 45 160,026 15,157 11,771 5,269 12,768 20,060 225,096
Carrying value
Balance, 30
June 2018 43 177,646 12,437 58,314 7,631 7,666 296,976 560,713
As at 31 December 2017
Customer
Gaming relationsh Brand Partnership Non-compete Total
licences ips (GB Software (GBP agreements clauses Goodwill (GBP
(GBP000's) P000's) (GBP000's) 000's) (GBP000's) (GBP000's)(GBP000's) 000's)
Cost
Balance, 1
January 2017 94 340,927 21,670 70,054 12,900 20,434 317,829 783,908
Additions - - 2,708 - - - - 2,708
Disposals - (3,822) - - - - - (3,822)
Translation (1) 550 833 (35) - - (1,443) (96)
Balance, 31
December 2017 93 337,655 25,211 70,019 12,900 20,434 316,386 782,698
Accumulated
amortisation
/impairment
Balance, 1
January 2017 34 96,811 7,414 6,523 2,824 - 21,477 135,083
Amortisation 41 44,958 4,820 3,504 1,634 7,661 - 62,618
Disposals - (2,638) - - - - - (2,638)
Translation 6 202 317 (22) - - (1,872) (1,369)
Balance, 31
December 2017 81 139,333 12,551 10,005 4,458 7,661 19,605 193,694
Carrying value
Balance, 31
December 2017 12 198,322 12,660 60,014 8,442 12,773 296,781 589,004
12. Accounts payable and accrued liabilities
Accounts payable and accrued liabilities consist of the following items:
30 June 2018 31 December 2017
(GBP000's) (GBP000's)
Affiliate/marketing expenses payable 4,899 6,547
Payable to game suppliers 2,120 1,899
Compensation payable 4,046 4,868
Professional fees 995 875
Gaming tax payable 2,109 2,101
Other 477 1,531
14,646 17,821
13. Other short-term payables
Other short-term payables consist of:
30 June 2018 31 December 2017
(GBP000's) (GBP000's)
Transaction related payables 1,237 3,484
Current portion of other long-term payables (note
16) 8,667 8,667
Interest Rate Swap (note 10) 144 -
10,048 12,151
14. Credit facilities
Incremental Second
First Lien Lien EUR Term GBP Term
Term Loan Facility Facility Facility Facility Total
(GBP000's) (GBP000's) (GBP000's) (GBP000's) (GBP000's) (GBP000's)
Balance, 1
January 2017 220,016 67,534 83,243 - - 370,793
Principal - - - 122,574 250,000 372,574
Repayment (218,793) (70,000) (90,000) - - (378,793)
Debt financing
costs - - - (1,397) (3,434) (4,831)
Accretion[*] 7,846 2,466 6,757 8 18 17,095
Foreign exchange
translation (9,069) - - 1,718 - (7,351)
Balance, 31
December 2017 - - - 122,903 246,584 369,487
Accretion[*] - - - 85 197 282
Foreign exchange
translation - - - (250) - (250)
Balance, 30 June
2018 - - - 122,738 246,781 369,519
Current portion - - - - - -
Non-current
portion - - - 122,738 246,781 369,519
*Effective interest rates are as follows: EUR Term Facility - 4.44%, GBP Term Facility - 6.01%.
15. Financial instruments
The principal financial instruments used by the Group are summarised below:
Financial assets
Financial assets as subsequently
measured at amortised cost
30 June 2018 31 December 2017
(GBP000's) (GBP000's)
Cash and restricted cash 29,657 59,241
Trade and other receivables 16,100 19,379
Other long-term receivables 1,614 2,104
Customer deposits 8,677 8,180
56,048 88,904
Financial liabilities
Financial liabilities as subsequently
measured at amortised cost
30 June 2018 31 December 2017
(GBP000's) (GBP000's)
Accounts payable and accrued liabilities 14,646 17,821
Other short-term payables 9,904 12,151
Other long-term payables 4,908 8,245
Interest payable 675 924
Payable to customers 8,677 8,180
Convertible debentures - 254
Long-term debt 369,519 369,487
408,329 417,062
The carrying values of the financial instruments noted above approximate their fair values.
Other financial instruments
Financial instruments at fair value
through profit or loss -
assets/(liabilities)
30 June 2018 31 December 2017
(GBP000's) (GBP000's)
Interest Rate Swap (718) -
Contingent consideration (8,633) (59,583)
Other long-term receivables 3,464 3,500
(5,887) (56,083)
Fair value hierarchy
The hierarchy of the Group's financial instruments carried at fair value is as follows:
Level 2 Level 3
30 June 2018 31 December 2017 30 June 2018 31 December 2017
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Interest Rate Swap (718) - - -
Other long-term
receivables 3,464 3,500 - -
Contingent
consideration - - (8,633) (59,583)
The Interest Rate Swap balance represents the fair value of expected cash outflows under the Interest Rate Swap agreement.
Other long-term receivables represent the fair value of the loan receivable from Gaming Realms. The key inputs into the fair value estimation of this balance include the share price of Gaming Realms on the date of cash transfer, a five-year risk-free interest rate of 1.339%, and an estimated share price return volatility rate of Gaming Realms of 39.3%.
A discounted cash flow valuation model was used to determine the value of the contingent consideration. The model considers the present value of the expected payments, discounted using a risk-adjusted discount rate of 7%. The expected payments are determined by considering the possible scenarios of forecast EBITDA, the amount to be paid under each scenario and the probability of each scenario.
On 15 June 2018, JPJ Group plc made a final earn-out payment of £58.5 million for the Botemania brand, its Spanish business within the Jackpotjoy segment and a £5.0 million milestone payment related to certain performance achievements within the Jackpotjoy segment. This final payment was met using existing cash resources.
As at 30 June 2018, the contingent consideration balance related to the two remaining milestone payments for the Jackpotjoy segment. The value of these remaining milestone payments reflects the high likelihood of these amounts becoming payable by their respective due dates.
The movement in Level 3 financial instruments is detailed below:
(GBP000's)
Contingent consideration, 1 January 2017 120,187
Fair value adjustments 27,562
Payments (94,218)
Accretion of discount 6,052
Contingent consideration, 31 December 2017 59,583
Fair value adjustments 11,450
Payments (63,455)
Accretion of discount 1,055
Contingent consideration, 30 June 2018 8,633
Current portion 4,463
Non-current portion 4,170
16. Other long-term payables
The Group is required to pay the Gamesys group £24.0 million in equal monthly instalments in arrears over the period from April 2017 to April 2020, for additional non-compete clauses that came into effect in April 2017 and that expire in March 2019. The Group has included £8.7 million of this payable in current liabilities, as shown in note 13 (31 December 2017 - £8.7 million), with the discounted value of the remaining balance, being £4.9 million (31 December 2017 - £8.2 million), included in other long-term payables. During the six months ended 30 June 2018, the Group has paid a total of £4.0 million (six months ended 30 June 2017 - £1.3 million) in relation to the additional non-compete clauses.
17. Share capital
As at 30 June 2018, JPJ Group plc's issued share capital consisted of 74,258,930 ordinary shares, each with a nominal value of £0.10. JPJ Group plc does not hold any shares in treasury and there are no shares in JPJ Group plc's issued share capital that do not represent capital.
Ordinary shares
of GBP0.10
(GBP000's) #
Balance, 1 January 2017 7,298 72,983,277
Conversion of convertible debentures, net of costs 92 916,498
Exercise of options 17 165,156
Balance, 31 December 2017 7,407 74,064,931
Conversion of convertible debentures, net of costs 6 56,499
Exercise of options 14 137,500
Balance, 30 June 2018 7,427 74,258,930
Ordinary shares
During the six months ended 30 June 2018, JPJ Group plc did not issue any additional ordinary shares, except as described below.
Convertible debentures
During the six months ended 30 June 2018, debentures at an undiscounted value of £0.2 million were converted into 56,499 ordinary shares of JPJ Group plc. The remaining convertible debentures were redeemed in full to the value of £0.1 million on 1 June 2018.
Share options
During the six months ended 30 June 2018, nil share options were granted, 137,500 share options were exercised, nil share options were forfeited, and nil share options expired.
During the three and six months ended 30 June 2018, the Group recorded £0.1 million and £0.2 million, respectively (2017 - £0.4 million and £0.9 million) in share-based compensation expense relating to the share option plan with a corresponding increase in share-based payment reserve.
Long-term incentive plan
On 26 March 2018, JPJ Group plc granted a mirror award over ordinary shares of JPJ Group plc. The mirror award is on the same commercial terms as the Group's long-term incentive plan for key management personnel.
On 28 March 2018, JPJ Group plc granted additional awards over ordinary shares of JPJ Group plc under the Group's long-term incentive plan for key management personnel.
During the three and six months ended 30 June 2018, the Group recorded £0.1 million and £0.1 million, respectively (2017 - £nil) in share-based compensation expense relating to the long-term incentive plan with a corresponding increase in share-based payment reserve.
18. Contingent liabilities
Indirect taxation
JPJ Group plc subsidiaries may be subject to indirect taxation on transactions that have been treated as exempt supplies of gambling, or on supplies that have been zero rated where legislation provides that the services are received or used and enjoyed in the country where the service provider is located. Revenue earned from customers located in any particular jurisdiction may give rise to further taxes in that jurisdiction. If such taxes are levied, either on the basis of current law or the current practice of any tax authority, or by reason of a change in the law or practice, then this may have a material adverse effect on the amount of tax payable by the Group or on its financial position.
Where it is considered probable that a previously identified contingent liability will give rise to an actual outflow of funds, then a provision is made in respect of the relevant jurisdiction and period impacted. Where the likelihood of a liability arising is considered remote, or the possible contingency is not material to the financial position of the Group, the contingency is not recognised as a liability at the balance sheet date. As at 30 June 2018, the Group had recognised £nil liability (31 December 2017 - £nil) related to potential contingent indirect taxation liabilities.
19. Subsequent events
On 14 August 2018, the Group signed a share purchase agreement for the sale of its social business for a cash consideration of £18.1 million.
References
1. This release contains non-IFRS financial measures, which are noted where used. For additional details, including with respect to the reconciliations from these non-IFRS financial measures, please refer to the information under the heading 'Note Regarding Non-IFRS Measures' of this release and Note 4 - Segment Information of the unaudited interim condensed consolidated financial statements on pages 22 through 27 of this release.
2. Per share figures are calculated on a diluted weighted average basis using the IFRS treasury method.
3. Operating cash flow plus proceeds from sale of intangible assets, net of capital expenditures.
4. Adjusted net debt consists of existing term loan, convertible debentures, non-compete clause payout, fair value of swap and contingent consideration liability, less non-restricted cash.
5. Adjusted net leverage ratio consists of existing term loans, non-compete clause payout, fair value of swap and contingent consideration liability less non-restricted cash divided by LTM to 30 June 2018 Adjusted EBITDA of £106.3 million.
6. For additional details, please refer to the information under the heading 'Key performance indicators' on page 12 of this release.
7. Effective 1 January 2018, the Mandalay segment has been aggregated with the Jackpotjoy segment. Refer to Note 4 - Segment Information of the unaudited interim condensed consolidated financial statements on pages 22 through 27 of this release for further discussion.
8. Organic growth is growth achieved without accounting for acquisitions or disposals.
9. Defined as Monthly Real Money Gaming Revenue per Average Active Customer - please refer to information under the heading 'Key performance indicators' on page 12 on this release.
Enquiries
JPJ Group plc
Jason Holden
Director of Investor Relations
jason.holden@jpj.com
+44(0)203-907-4032
Amanda Brewer
Vice President of Corporate Communications
amanda.brewer@jpj.com
+1-416-720-8150
Media Enquires
Finsbury
James Leviton, Andy Parnis
jpj@finsbury.com
+44(0)207-251-3801
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