# JIN - Jumbo Interactive



## System (27 November 2010)

Jumbo Interactive Limited (JIN) was formerly known as Manaccom Corporation Limited (MNL).

Previous discussion of this company can be found in the MNL thread: https://www.aussiestockforums.com/forums/showthread.php?t=18589


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## jtl (2 December 2010)

Man, since its shares consolidation done under MNL or as JUM, as great as its profit margin is on the rising, I am still waiting for the share price to get up to 50c again where I will break even.. lol

JIN share price does seem to be undervalued considering it's last two years of annual profit increases but I guess with no storm like news but its prudent announcements, the market is feeling lukewarm toward it.


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## decadon (5 December 2010)

Hey JTL,

I've been holding this company for a while and also like the growth story. Sales have been increasing year on year and profit is following the same trend too. With dividends on the horizon it won't be long until the market takes notice of this stock again. 

I think we just have to wait for half yearly and yearly profit announcements to come up with the goods to kick the sp along.


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## decadon (17 February 2011)

The share price has responded positively to the profit upgrade, looks like this company is starting to produce some good results.


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## decadon (10 March 2011)

JIN has announced an interim dividend of .5c per share. Looks like this company is well positioned for continued growth. 

Based on the Internet lotteries division making an annual profit of 4.6 million and a p/e of 8 the share price should be around the 90c mark.


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## skc (10 March 2011)

decadon said:


> JIN has announced an interim dividend of .5c per share. Looks like this company is well positioned for continued growth.
> 
> Based on the Internet lotteries division making an annual profit of 4.6 million and a p/e of 8 the share price should be around the 90c mark.




Their internet lottery business licence is only good until 2014. So you can't apply PE of 8 to that business. What you are buying for is ~3 years of $4.6m profit and some 'pseudo-option' that they will have their licence extended. Do your own numbers and see what JIN is worth with and without the extension, and trade/invest accordingly.


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## decadon (19 March 2011)

With sales fast approaching $100 million a year I find it highly likely that their license will be renewed. Such a fast and effective retailer selling their product they'd be crazy not to. 

Sure there is a risk and any investor should be aware of that. A company like this should be left for the speculative part of your portfolio. But I am certainly enjoying the rise in the share price.


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## skc (19 March 2011)

decadon said:


> With sales fast approaching $100 million a year I find it highly likely that their license will be renewed. Such a fast and effective retailer selling their product they'd be crazy not to.
> 
> Sure there is a risk and any investor should be aware of that. A company like this should be left for the speculative part of your portfolio. But I am certainly enjoying the rise in the share price.




I traded this stock last month but I couldn't find more details around the licensing issue.
Because it is so profitable / valuable, many people will like a slice of the pie. It may be the case that they will auction off the license... I have no idea. However, their customer accounts is their most valuable asset and that definitely gives them an inside track for license renewal. 

You are definitely right about it being the speculative part and it is probably worth a punt. Good luck.


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## decadon (22 March 2011)

JIN closed at a 52 week high yesterday @ .43 on good volume (for JIN that is  )


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## Douglas (10 May 2011)

*Jumbo Interactive (Buffet would like this stock)*

Jumbo Interactive (JIN) would be one Buffet would consider buying. They sell tickets for the Victorian and NSW lotteries online This year they forecast they will make 4 to 4.5 million dollars on sales of 75 million. The whole company is only selling for 17 million at 45 cents. They have 10.2 million in cash at the bank so its a pretty safe stock.  They have the exclusive license to sell tickets in NSW until December 2013 and sell them with Tatts in Victoria. Its a great business because people want to make sure they buy their lottery tickets every week or miss out on their big chance to win. They have around 3 percent of the lottery market and sales are increasing every year as people move online to buy.

Its only selling at 4 X 2011 profit and is 45 cents, Carsales, Seek, Wotif, all trade between 18-25X. Put a 12X earning on this stock and it trades at $1.20. Its only a small stock and has been ignored by the market,with a solid results in 2011 and  with  10 million in cash this stock should do extremely well. 

Anyway, check it out, it should do well.


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## Plumber1 (10 May 2011)

*Re: Jumbo Interactive (Buffet would like this stock)*



Douglas said:


> They have the exclusive license to sell tickets in NSW until December 2013 and sell them with Tatts in Victoria.
> 
> .




How long have they had these licences? And why hasn't the market factored these low P/Es into the share price?
When does their licence with Tatts in Victoria expire?


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## Douglas (10 May 2011)

*Re: Jumbo Interactive (Buffet would like this stock)*



Plumber1 said:


> How long have they had these licences? And why hasn't the market factored these low P/Es into the share price?
> When does their licence with Tatts in Victoria expire?




The Victoran license expires in June 2013. The previous license ended in 2008 and was renewed for five years until June 2013. They picked up the NSW contract in Dec 2008 and it runs to Dec 2013. They have done a good job of selling tickets and hold all the customer details  and technology to run the sales so it is likely they will have their license renewed again for both in 2013.

Good question about valuation, why only 4X, basically its undervalued but like anything there are reason. Generally companies under 50 million are not considered by institutions and dont get the exposure that larger stocks do.  They also had another busines selling software which contributed around 10 percent of sales which they closed this year to focus purely on the online lottery busines. That may have clouded the picture for investors too. The profit for this year of 4 to 4.5 million includes the costs of closing this business. Anyway it is at an excellent  price  and  has  pretty good financials and future. I have been investing for a long time and that sort of combination doesnt come along often.


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## Country Lad (10 May 2011)

*Re: Jumbo Interactive (Buffet would like this stock)*



Plumber1 said:


> ...............And why hasn't the market factored these low P/Es into the share price?................




Probably for 2 reasons, firstly because it was a dog for 30 years through all its iterations since Longreach Metals, particularly its period as JUM, then those rosy promises which were followed by the losses in the last 2 years ($11.7 million last year) which has no doubt led to a sceptical market.

The second reason would be that both the lottery licenses cease in 2013 with no guarantee that they will be renewed and there will be keen competition for those licences.  Consequently the market has assessed the risk and hence the low P:E.  Maybe JIN will enter into overseas agreements, maybe the Tatts and NSW agreements will be renewed, maybe Julia Gillard will win the next election, but there is no certainty and the risk is the reason for the low P:E. While those risks are there, the P:E is unlikely to change much.

JIN is probably a good example of there being a very good reason for some apparently good companies have a low P:E.

Cheers
Country Lad


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## Country Lad (10 May 2011)

.... and I would add that Buffet would not buy this one, even with your money.

Cheers Country Lad


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## skc (10 May 2011)

*Re: Jumbo Interactive (Buffet would like this stock)*



Douglas said:


> Its only selling at 4 X 2011 profit and is 45 cents, Carsales, Seek, Wotif, all trade between 18-25X. Put a 12X earning on this stock and it trades at $1.20. Its only a small stock and has been ignored by the market,with a solid results in 2011 and  with  10 million in cash this stock should do extremely well.
> 
> Anyway, check it out, it should do well.




PE valuation methods = earnings into the future forever. A business that may have no business after 2013 should not be valued with a PE multiple. And for that reason, comparing JIN with these other internet plays is really quite wrong.

Like I said a few posts back - it's a punt on them revewing the licensces. You can beat the market only if you have some insight into how that process will pan out.


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## Plumber1 (9 June 2011)

decadon said:


> JIN has announced an interim dividend of .5c per share. Looks like this company is well positioned for continued growth.
> 
> Based on the Internet lotteries division making an annual profit of 4.6 million and a p/e of 8 the share price should be around the 90c mark.




It has dropped from 44c to 34c  (about 25%)  in the last three weeks.  A long way from 90c.

Tatts is  setting up an internet website to sell tickets in competition to Jumbo. My money is on Tatts to tear a hole in Jumbo's sales real fast.


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## McLovin (25 July 2011)

*Re: Jumbo Interactive (Buffet would like this stock)*



Douglas said:


> They have 10.2 million in cash at the bank so its a pretty safe stock.




That cash number is a bit misleading. Most of "their" cash is actually client cash from winnings yet to be paid out and deposits made by customers in order to buy lottery tickets.


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## decadon (24 August 2011)

JUMBO INTERACTIVE : 23 Aug 2011 2011 
Preliminary Final Report results Full Announcement
ASX  RELEASE  –  Tuesday,  23  August  2011  FY  2011  RESULTS  

• 6th consecutive Record Revenue up 15% to $76 million
• Record Net Profit After Tax $4.8 million
• 0.5c Final Dividend declared bringing full year dividend to 1.0c
• Strong balance sheet with Net Assets $10 million

Leading interactive lottery business, Jumbo Interactive (ASX: JIN), today announced its 6th consecutive record Revenue of $76 million, record Net Profit After Tax of $4.8 million and also declared a fully franked 0.5c final dividend bringing total dividends for the year to 1.0c.

The result was due to the continuing growth of the Internet lottery market in Australia and overseas. Jumbo’s key asset, www.ozlotteries.com benefitted from significant in-house technological development with the release of the smartphone service m.ozlotteries.com and the customer loyalty program www.lottopoints.com. Both were key to opening new markets and adding value to OzLotteries.com customers that have grown to record numbers.

“Our record result, strong balance sheet and key lottery assets puts the Company in a good position to grow international markets and to evolve in the Australian market in the year ahead”, said Mr Mike Veverka, CEO and Founder of Jumbo Interactive Limited.

The Australian market for Internet lotteries has grown to approximately 6% of the overall lottery market since the launch of both OzLotteries.com and Tatts.com over
7 years ago. Similar markets overseas such as the UK have reached 15% giving a
guide to the growth ahead.

During the past 7 years, OzLotteries.com has adapted well to the emerging market with both OzLotteries.com and Tatts.com developing markets independently. Directors caution however that the market is set to evolve again with the expected introduction of a NSW version of Tatts.com with a potentially adverse impact to results in the year ahead. Management will continue to guide OzLotteries.com with a long-term view with respect to other operators and stakeholders in the lottery industry.

“I wish to thank the board and our staff for their valuable contribution in achieving this record result and I look forward to the year ahead”, said Mr Veverka.

Interactive  Lottery  Assets  
The cornerstone to Jumbo’s success is the lottery technology that has been in constant development for over 10 years. In the past 12 months, this technology was given a boost with the release of the smartphone version m.ozlotteries.com that opened a new market of mobile customers. The customer loyalty program www.lottopoints.comwas also enhanced and is a key asset to retaining customer accounts. This technology is not only benefiting the Australian market, but is key to expanding international markets. Throughout the year, significant effort was directed towards expanding Australian lotteries into international markets as well as working with new lotteries in North America and Europe.

The technology was exhibited on the world stage at the World Lottery Association, European Lottery Congress, National Association of State and Provincial Lotteries (USA) and other key lottery associations (www.jumbolotteries.com). Further exhibitions are planned in the year ahead, particularly in the USA.

The customer database of Australian and overseas customers has also become a key asset to the Company. A significant number of customers evenly split between male and female and over 18 years old have accounts on OzLotteries.com and have developed loyalty to the brand through years of quality service.

About  Jumbo  Interactive  
In 2000, the Company sold its first lottery ticket on the Internet and since then has developed www.ozlotteries.com into a popular place for lotteries to be played.

Jumbo has proven its ability to open up new lottery markets with its innovative technology and Internet marketing initiatives that have brought lotteries to new
demographics via the Internet.

International markets are key targets for the Company, in particular the $60 billion North American and $110 billion European lottery markets. The US market has not yet moved to the Internet due to federal regulations that are currently under review.
OzLotteries.com plays an important role in the Australian lottery industry with over
$17 million in additional State Government revenue raised from sales in 2011 and
$15 million in 2010.


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## Douglas (2 November 2011)

*Re: Jumbo Interactive (Buffet would like this stock)*



McLovin said:


> That cash number is a bit misleading. Most of "their" cash is actually client cash from winnings yet to be paid out and deposits made by customers in order to buy lottery tickets.




The cash balance in the 2011 Annual Report (Page48) is 11.770 million dollars. Of that amount 4.285 million is customers accounts so the real balance is 7.485 million which is pretty good for a company currently valued at 12 million who made 4.8 million profit in 2011.


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## McLovin (2 November 2011)

*Re: Jumbo Interactive (Buffet would like this stock)*



Douglas said:


> The cash balance in the 2011 Annual Report (Page48) is 11.770 million dollars. Of that amount 4.285 million is customers accounts so the real balance is 7.485 million which is pretty good for a company currently valued at 12 million who made 4.8 million profit in 2011.




This is true. 

I just had a quick look through their annual report. I don't like the fact they are capitalising customer acquisition costs. Plus, the $1m they capitalised for "website development costs".And why is the dividend so woefully low? This thing should be throwing cash off.


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## Douglas (2 November 2011)

*Re: Jumbo Interactive (Buffet would like this stock)*

Yeah it would be better if the dividend was higher. I always look at the cash flow statement to make sure of investing as it is a good indicator of performance and not subject to the same accounting difficulties you mentioned.  Looking at Jumbos cash flow, they made 6.5 million in operating cash flow, spent 2.7 million in investment cash flow leaving 3.8 million left for the company to spend.  If they had returned all that to shareholders it would have been a dividend of 9.5 cents. They however are fairly conservative and are also laying aside funds for future expansion so spent the 3.8 million as follows. $1.07 million for buybacks, paid $300,000 off debt, $166,000 thousand in dividends and increased their cash in bank by $2.3 million.


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## JTLP (2 November 2011)

I remember reading somewhere that their contracts are only guaranteed until 2012/13/14 (can't exactly remember). Thus why this is probably priced "cheaply" according to some. They will need to rebid on these and if unsuccessful then they would be in some serious trouble...

Anyway FYI and DNH


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## McLovin (2 November 2011)

*Re: Jumbo Interactive (Buffet would like this stock)*



Douglas said:


> Yeah it would be better if the dividend was higher. I always look at the cash flow statement to make sure of investing as it is a good indicator of performance and not subject to the same accounting difficulties you mentioned.  Looking at Jumbos cash flow, they made 6.5 million in operating cash flow, spent 2.7 million in investment cash flow leaving 3.8 million left for the company to spend.  If they had returned all that to shareholders it would have been a dividend of 9.5 cents. They however are fairly conservative and are also laying aside funds for future expansion so spent the 3.8 million as follows. $1.07 million for buybacks, paid $300,000 off debt, $166,000 thousand in dividends and increased their cash in bank by $2.3 million.




The problem is that I'm dubious as to whether those capitalised expenses really should have been capitalised. I think there are very, very few examples of where customer acquisition costs should be capitalised and this doesn't strike me as one. There is also ~$900k in capitalised website development costs. For a company this size with, from what I have seen, a relatively basic website, it's seems strange that there is no mention of what R&D was done wrt website development during the year considering almost 20% of operating cash flow was ploughed into development. Add those two numbers back to your operating cash flow, the remove the income tax received item and apply a more reasonable income tax paid number and it doesn't look that great.


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## robusta (17 January 2012)

WOW - good old US of A. Good luck to all who hold.

http://www.asx.com.au/asxpdf/20120117/pdf/423ssj5j6qwrs6.pdf


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## McLovin (17 January 2012)

Bit of an over-reaction me thinks. Up 34% because they hired a couple of execs to pursure opportunities.


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## robusta (17 January 2012)

McLovin said:


> Bit of an over-reaction me thinks. Up 34% because they hired a couple of execs to pursure opportunities.




You could be right there.


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## skc (17 January 2012)

McLovin said:


> Bit of an over-reaction me thinks. Up 34% because they hired a couple of execs to pursure opportunities.




Probably an over-reaction but a trading opportunity nonetheless. Watched the action and bid up to 42.5c on open but didn't get a fill. 

The ruling means JIN's _potential _market is now 50x bigger than before, so a sharp rise is not without reason. If they land a deal or two then it will be a company maker. 

The funny thing is...the ruling actually passed late last year. The smart ones already bought 3 weeks ago. It also shows that there are zero analyst following JIN.

http://www.bloomberg.com/news/2011-...ternet-lottery-jackpots-after-u-s-ruling.html


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## McLovin (17 January 2012)

skc said:


> The ruling means JIN's _potential _market is now 50x bigger than before, so a sharp rise is not without reason. If they land a deal or two then it will be a company maker.




I did a quick Google search and there are already several sites selling lottery tickets for American lotteries (as well as European). They use local agents to buy the tickets.

Here's an example...

http://www.thelotter.com/

Worth noting as well that the lottery industry in Europe is worth almost double the American one and doesn't have restrictions on it. I wonder why they haven't done anything there.


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## McLovin (23 January 2012)

Well that fizzled out quickly.


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## skc (23 January 2012)

McLovin said:


> Well that fizzled out quickly.




Technically it's done a gap fill but also an ugly weekly candle.

Fundamentally the upside of a deal in US is probably at least 60-70c, while the downside will be a continued slow drip lower.

There's a long shot bonus that the Australian license is renewed... although the market hasn't priced that in for the last few years (and prob for good reason). The database of existing clients might worth a couple of $m.


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## ROE (7 February 2012)

something is up
has a very good run last few days and even like a day today ...

Could be nothing just risk and reward for this stock look extremely square on
the upside some months ago, even if they didn't have anything, no work, no renewal
they will have enough cash in a few years to wind up and hand back cash to shareholder
and you wouldn't lose much money at all... so only upside and the upside is huge...

disc: I load this up about 6 months ago


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## ROE (21 February 2012)

Headline profit up 7% but look closely, it is a stunner business
underlying profit up more like 50% wooho another rising stars


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## ROE (5 March 2012)

Incredible volume and price last few days...
no news, no speeding ticket ...

Friday up 15%
Today up 12% 
tomorrow? looking at sell side it going to be up again...

Come on out with a contract or 2 on US and this going to be my 10 baggers baby...it may even beat CCP
to the 10 baggers for me


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## ROE (28 March 2012)

McLovin said:


> I did a quick Google search and there are already several sites selling lottery tickets for American lotteries (as well as European). They use local agents to buy the tickets.
> 
> Here's an example...
> 
> ...




Now I have a sizeable interest in this business I can explain a few things 

thelotter.com is a grey market operator, it doesn't have any official license
so if they want they can shut it down at any time

where as JIN is an official accredited agent, it operates within the law so there is no risk
to its business being shut down for not compliance or not having license...

Can only be a good thing for license operator , if and when these guys get shutdown
who would stand to gain market share


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## ROE (2 May 2012)

Second profit upgrade for the year ..

FY 2012 NPAT IN THE RANGE $5.9 TO $6.2 MILLION (23% to 29% inc)
FY 2012 REVENUE IN THE RANGE $94 TO $98 MILLION (24% to 29% inc)

STRONG SALES FROM A GROWING CUSTOMER DATABASE AND RECENT RUN OF LARGE JACKPOTS


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## catfish (4 May 2012)

Very interesting times for this company. I picked up a few recently as I was attracted to the amazing upside from a potential US contract. I have also seen some positive commentary on this stock recently which will only assist price in the short term. For now it's exciting to be part of this story.


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## ROE (4 May 2012)

catfish said:


> Very interesting times for this company. I picked up a few recently as I was attracted to the amazing upside from a potential US contract. I have also seen some positive commentary on this stock recently which will only assist price in the short term. For now it's exciting to be part of this story.




Yeah I'm super impressed when I discovered them and try out their online lottery and bought a few tickets.

So easy, their online system I ranked it.. one of the all time best for me in term of online usability...

I shop a lot online and use numerous site, JIN and Wotif are best of the best up there

when it come to user interface and it is such a pleasure to use, Just like google
search engine then there is everyone else...

Right now the market still pint this stock down but once they score a US or two contract this stocks should be on a PE of 15-20 or more ...

such an awesome leverage earning business, every dollar extra after the fixed cost of running the IT system the margin get bigger.....

just have a look of their revenue grow vs profit grow rate ..staggering unheard of in
the world of normal brick and mortal business.....

I think they will exceed the current revise forecast as a few more big jackpot are lining up from now till 30 June .... next week Tuesday 70m should draw crazy number of people playing and if that doesn't pop like the last 2 (30m,50m) this will get to
90m or 100m Jackpot ...now that would be a fireworks finish for the FY year


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## catfish (4 May 2012)

ROE said:


> Yeah I'm super impressed when I discovered them and try out their online lottery and bought a few tickets.
> 
> So easy, their online system I ranked it.. one of the all time best for me in term of online usability...
> 
> ...




Interesting comments from CEO regarding jackpots and their ability to bring in those registered customers which do not play on a regular basis. I also believe the result will exceed revised forecasts, let’s hope no one wins next week. 

Very impressive and typical of an internet business with profit growing faster than revenue as you mentioned. Better to put your capital into JIN rather than using it on their services, although 70 million may exceed to return on my investment in JIN.  haha


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## ROE (4 May 2012)

May use my JIN dividend and get a few tickets this Tuesday 

If I win I take 5% of JIN stock


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## Ves (19 May 2012)

SKC, I will reply here so as not to de-rail the DTL discussion thread.



skc said:


> Jin is not a IT company. It is a marketing company with a customer database and a licence to sell lotto tickets.



The reason that I said this was that they developed their own systems / website, over the last decade. It's a world-class system. I consider most services based companies that rely heavily on "people power" to be marketing companies at heart. They also won the SA Lotteries contract recently by the way. Gives the earnings a higher degree of certainty than there was twelve months ago.  Certainly wouldn't hold this company as a core holding though.  Agree that there is still speculation involved.


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## skc (19 May 2012)

Ves said:


> SKC, I will reply here so as not to de-rail the DTL discussion thread.
> 
> 
> The reason that I said this was that they developed their own systems / website, over the last decade. It's a world-class system. I consider most services based companies that rely heavily on "people power" to be marketing companies at heart. They also won the SA Lotteries contract recently by the way. Gives the earnings a higher degree of certainty than there was twelve months ago.  Certainly wouldn't hold this company as a core holding though.  Agree that there is still speculation involved.




The system and websites are mere enablers of their business. They are not having a competitive advantage because of those. They have a competitive advantage because of the fact that they have exclusive licence to sell lotto tickets online. 

That's why it is not an IT company.

Plus you don't need a world class system to sell lotto tickets... You just need a working system.


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## Ves (8 June 2012)

This has tanked since late May when Tatts announced that they had started competing in the NSW market.  

ROE - you clearly know this business well.  Why would someone pay an extra 15% for a ticket off OzLotteries.com when they could use the Tatts site for the same price as paying at the newsagent?  They seem to be still doing well in Victoria since the competition started there, they must have something up their sleave.  Possibly some extra features on their website that I see people talking about  (syndication, repeat purchases and saving "favourite" number combinations).

I guess you could also say that lottery customers are pretty "sticky" once they have opened an account.

Thoughts?


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## McLovin (8 June 2012)

skc said:
			
		

> The system and websites are mere enablers of their business. They are not having a competitive advantage because of those. They have a competitive advantage because of the fact that they have exclusive licence to sell lotto tickets online.
> 
> That's why it is not an IT company.
> 
> Plus you don't need a world class system to sell lotto tickets... You just need a working system.




Yeah I agree. 

Also, some very large corps in the US sell lottery tickets in store (Walmart/CVS/Walgreens) they're not just going to watch their revenue march out the door and they already are interacting with their customers online, so they likely will already have the customer captured. Joe can get his blue doctors online from CVS _and_ get his lottery tickets! How on Earth is JIN going to compete with that?

JIN may have a world class system but that could just be a function of the fact that lottery tickets couldn't be sold online in the biggest consumer market in the world, so no one bothered developing a better one. They've spent $10-15m developing their system, that's pocket change for a large company. Someone like Amazon could just start selling lottery tickets at cost to kill off any competition. There's no moat to this business, outside of its monopoly revenue.

Maybe I'm missing something.

ETA: Walgreens does not sell lottery tickets, but CVS does. Point still stands though.


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## Ves (8 June 2012)

Don't these big corporates like Amazon or Walgreens have to win a lottery contract first?


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## McLovin (9 June 2012)

Ves said:


> Don't these big corporates like Amazon or Walgreens have to win a lottery contract first?




Why is the assumption that it will be done as a contract instead of whoever wants to sell them can ¿


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## Ves (9 June 2012)

McLovin said:


> Why is the assumption that it will be done as a contract instead of whoever wants to sell them can ¿



Are you saying that the big players are going to become lottery companies and run their own lotteries? How else do you get the tickets to sell without signing a contract with the company that runs the lottery?    I would assume that since lottery is heavily regulated in the US (hence why internet lottery took so long to be legalised) that this would mean that you need to have a contract or risk being de-commissioned as a _grey lotter._

Am I missing something?


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## McLovin (9 June 2012)

Ves said:


> Are you saying that the big players are going to become lottery companies and run their own lotteries? How else do you get the tickets to sell without signing a contract with the company that runs the lottery?    I would assume that since lottery is heavily regulated in the US (hence why internet lottery took so long to be legalised) that this would mean that you need to have a contract or risk being de-commissioned as a _grey lotter._
> 
> Am I missing something?




No, I'm saying they are already selling lottery tickets in their stores, so I would just assume that anyone who has a license to sell lottery tickets in store will have that license extended to sell online. So, JIN will just become a very small player in a huge market. I'm questioning whether the assumption that JIN will somehow win an exclusive contract, as they did in Australia, is correct. You may not have been inferring that, in which case I apologise.


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## Ves (9 June 2012)

I don't think an American contract is a massive chance or a forgone conclusion (but I don't think the market is pricing it in).  Cash balance is about 35c per share I believe, so you are paying 60c for the rest of the business.  With the SA lotteries contract being 5+ 5 year option I don't think there is too much downside to that.  The market may disagree in the short-term however.   I only have a really small position in this companyy  (roughly $2k) but I may look to increase it when I am more comfortable with some of these underlying issues that we are discussing.

I think it is interesting to note the relationship between JIN and SA Lotteries and the major player who has the maintenance contract for SA Lotteries systems, but did not win the contract.

I will research the possibility of some of the major corporations being able to sell tickets online without needing a special license.  Not 100% sure on the answer.


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## ROE (9 June 2012)

Ves said:


> This has tanked since late May when Tatts announced that they had started competing in the NSW market.
> 
> ROE - you clearly know this business well.  Why would someone pay an extra 15% for a ticket off OzLotteries.com when they could use the Tatts site for the same price as paying at the newsagent?  They seem to be still doing well in Victoria since the competition started there, they must have something up their sleave.  Possibly some extra features on their website that I see people talking about  (syndication, repeat purchases and saving "favourite" number combinations).
> 
> ...




I dont know the exact answer to this one but this is something I do know

1. JIN system is far superior to other online lottery (interface and easy of use and replay features)

2. Psychology wise unless you are a serial gambler cost may not be a factor when paying lottery.

3. Switching hassle, it require a bit of paper work to switch from one player to another unless
    there is some very strong incentive for someone to do it, 10-15% is that a strong incentive?
    no one really know until some stats is compiled...I guess some people will but that is not a worry, it will be an issue if there is large number of people do it...

4. I guess if JIN start losing players they can stop this price gap and that will 99% guaranteeing people wont    switch because JIN is better in every other aspect except price 

we will find out in a few years how many of those points sticks


----------



## McLovin (9 June 2012)

Ves said:


> I don't think an American contract is a massive chance or a forgone conclusion (but I don't think the market is pricing it in).  Cash balance is about 35c per share I believe, so you are paying 60c for the rest of the business.




Don't forget to remove the players' cash in their playing accounts which shows up on JIN's balance sheet.  



			
				Vespuria said:
			
		

> With the SA lotteries contract being 5+ 5 year option I don't think there is too much downside to that.  The market may disagree in the short-term however.   I only have a really small position in this companyy  (roughly $2k) but I may look to increase it when I am more comfortable with some of these underlying issues that we are discussing.




What's the anticipated value of the contract, revenue wise?





Ves said:


> I will research the possibility of some of the major corporations being able to sell tickets online without needing a special license.  Not 100% sure on the answer.




I suspect this will be a state to state thing as lotteries are regulated at the state level. Illinois is going to begin its own trial program soon. 

More info here if you're interested...

http://www.scribd.com/fullscreen/86509847?access_key=key-g3asni7d3mxlyvmhcki

And the website..

https://www.myillinoislottery.com/en-us/games/megamillions.html


----------



## Ves (9 June 2012)

McLovin said:


> What's the anticipated value of the contract, revenue wise?



Players funds under liabilities would decrease cash, I agree... but it's still over 30c per share if I recall.

I found this on another site,  The Boat Fund (on Facebook)



> Blue sky
> 
> As with any investment, what I look for is the potential for the business to grow. Until the change of legislation in the US, JIN had plenty of growth in Australia but the real sizzle in this steak is a potential contract win in the US.
> 
> ...



Clearly not priced into the current share price - the market agrees with you and thinks that they have little if any hope.  I would not include this "blue sky" in a valuation method.  The most conversative for JIN is a 10-year mine life type DCF.  

Thanks for the links - will read them when I get a chance.

ROE - thanks also for your reply.   Tough to know if JIN has a competitive advantage, let alone a lasting one, but they certainly have a headstart over the competition.   Apparently a lot of these big lottery sellers have very poor online presences.


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## ROE (9 June 2012)

Ves said:


> Players funds under liabilities would decrease cash, I agree... but it's still over 30c per share if I recall.




JIN Annual report tell you how much cash is its money and how much are customers money..


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## Ves (9 June 2012)

ROE said:


> JIN Annual report tell you how much cash is its money and how much are customers money..



Without looking I remember the net balance being $30 million if you take out the players accounts. Don't have the chance to look at the moment, sorry.


----------



## ROE (9 June 2012)

Ves said:


> ROE - thanks also for your reply.   Tough to know if JIN has a competitive advantage, let alone a lasting one, but they certainly have a headstart over the competition.   Apparently a lot of these big lottery sellers have very poor online presences.




Small company rarely has any competitive advantage, what you buying for is a reasonable management that can
build it into a bigger business with better moat and JIN has a reasonable chance of doing there because of its
first mover advantages...

People invest in small caps looking for large moat going to be disappointed but you compensate for better return
if thing turn out well...

you not going to see WOW/WES double in price in a few years doesn't matter how well it travel because they face the law of large number.....

but these small caps if pick correct can easily do that....


----------



## McLovin (10 June 2012)

Ves said:


> I found this on another site,  The Boat Fund (on Facebook)




Interesting. I'd note though that the US lottery market maybe $56b, but 60% of that is scratchies.

For me, it's a pretty simple equation; these guys got lucky with their Tatts contract. They may or may not end up selling lottery tickets in the US but I see all these forecasts based on the presumption that what they do in the US will be similar to what they did with Tatts, which I think is highly unlikely.


----------



## Ves (10 June 2012)

They also won the SA Lotteries contract though?  GTECH have an agreement with SA Lotteries for technology and maintenance - I find it curious that Jumbo Interactive won this contract.  Does this not indicate that they had a better offering than GTECH? The Lottomatica group who owns GTECH is a massive player, it dwarves JIN.

Surely that information alone is worth something!  I don't see why Tatts would not renew the two VIC and NSW licenses either.  Jumbo Interactive provides them with their biggest lottery revenue stream (outside of their own operations). It may be naive to ask this - but would you sack your best employee?


----------



## Ves (10 June 2012)

McLovin said:


> Interesting. I'd note though that the US lottery market maybe $56b, but 60% of that is scratchies.



JIN quoted the $56 billion figure in the April 2012 investor update.  Fairly sure it doesn't include the scratchies?


----------



## McLovin (11 June 2012)

Ves said:


> JIN quoted the $56 billion figure in the April 2012 investor update.  Fairly sure it doesn't include the scratchies?




I think it does. The difference is that lotto is a game but the word lottery is applied to the entire industry. JIN's addressable market is significantly smaller than they are stating in their presentations. Surprised that they don't disclose that. 



> Lottery Sales
> 
> How many lotteries are there?
> In North America every Canadian province, 43 U.S. states, the District of Columbia, Mexico, Puerto Rico, and the U.S. Virgin Islands all offer government-operated lotteries. Elsewhere in the world publicly-operated lotteries exist in at least 100 countries on every inhabited continent. In some cases they are operated by national governments, in other cases by state or provincial governments, and in still others by cities.
> ...




http://www.naspl.org/index.cfm?fuseaction=content&menuid=14&pageid=1020


----------



## McLovin (11 June 2012)

Ves said:


> They also won the SA Lotteries contract though?  GTECH have an agreement with SA Lotteries for technology and maintenance - I find it curious that Jumbo Interactive won this contract.  Does this not indicate that they had a better offering than GTECH? The Lottomatica group who owns GTECH is a massive player, it dwarves JIN.
> 
> Surely that information alone is worth something!  I don't see why Tatts would not renew the two VIC and NSW licenses either.  Jumbo Interactive provides them with their biggest lottery revenue stream (outside of their own operations). It may be naive to ask this - but would you sack your best employee?




Fair point.


----------



## Ves (11 June 2012)

McLovin said:


> I think it does. The difference is that lotto is a game but the word lottery is applied to the entire industry. JIN's addressable market is significantly smaller than they are stating in their presentations. Surprised that they don't disclose that.
> 
> 
> 
> http://www.naspl.org/index.cfm?fuseaction=content&menuid=14&pageid=1020




You might be right by the looks of it.  Seems odd that they wouldn't disclose.  A bit of a red-mark against management... slightly misleading to those who factored this into their valuation.


----------



## skc (11 June 2012)

Ves said:


> Clearly not priced into the current share price - the market agrees with you and thinks that they have little if any hope.  I would not include this "blue sky" in a valuation method.  The most conversative for JIN is a 10-year mine life type DCF.




The 10-year mine life type DCF will get you the right value for the company _if you have control_. I bet you that the management isn't going to distribute all funds and delist the company if their licences are not re-newed. What's stopping them burning cash looking for some illusive US opportunity while ensuring they are still being paid? Bit like smaller oil companies that hit a few good and be profitable for a few years, then management simply drain on the company's assets until they either strike it lucky again, or live in a cap-raising-every-6-month kind of existence.

That was my concern when I looked at the company at 40c. At the time the share price supported the DCF-type analysis, but I had no idea on how to include a factor of safety taking into account that I had no control how management will treat the cash. And I still don't so JIN is not something that I would invest in.

Obviously others view things differently and if they made good profits on the last leg up then good on them.



Ves said:


> Surely that information alone is worth something!  I don't see why Tatts would not renew the two VIC and NSW licenses either.  Jumbo Interactive provides them with their biggest lottery revenue stream (outside of their own operations). It may be naive to ask this - but would you sack your best employee?




Would you sack your best employee? Depends on how much you are paying them vs the cost of substitute.

The three enablers of JIN's business are:
1). The licence.
2). The IT systems.
3). The customer database.

Tatts owns 1) can probably duplicate 2) and needs to either purchase 3) from JIN or build up over time.

Imgaine Tatts says "We won't renew your licence, and we are offering you $5m for the customer database." Can a reasonable JIN board refuse if they are looking after shareholder's interest?


----------



## McLovin (12 June 2012)

Ves said:


> You might be right by the looks of it.  Seems odd that they wouldn't disclose.  A bit of a red-mark against management... slightly misleading to those who factored this into their valuation.




I'll put this in there with the fact they are capitalising customer acquisition costs and website development. That's about when I decided they weren't for me.


----------



## Ves (12 June 2012)

skc said:


> The 10-year mine life type DCF will get you the right value for the company _if you have control_. I bet you that the management isn't going to distribute all funds and delist the company if their licences are not re-newed. What's stopping them burning cash looking for some illusive US opportunity while ensuring they are still being paid? Bit like smaller oil companies that hit a few good and be profitable for a few years, then management simply drain on the company's assets until they either strike it lucky again, or live in a cap-raising-every-6-month kind of existence.



SKC, all of these points are pertinent and I certainly don't disagree. 

The risks are their for all to see, and I have definitely considered them. This is where the great unknown of investing for the future comes into it and you have to trust yourself and control the risks as much as possible  (in your case avoid the company, in my case a very small position).  In the case of JIN, they have currently issued stock options to two very senior US lottery executives, only able to be taken up in the event that they win a USA contract.  I think this in itself helps mitigate some of the risks about splurging for US opportunities that may or may not come. Not sure why else these US executives would work for "free" unless they had some confidence in securing a contract. Also believe that their business model and technology development is highly scalable in its current form.  I don't doubt they could waste money  -  but hard to see where at the moment.  I think this is the case with any company and their free cash flow to equity.  

Also helps that the CEO has most of his wealth in the company and has sat on illiquid shares for over 10 years now.  




> Would you sack your best employee? Depends on how much you are paying them vs the cost of substitute.
> 
> The three enablers of JIN's business are:
> 1). The licence.
> ...



I don't think the last line here is as risky as it was six months ago.  The SA Lotteries contract insulates them from this to a greater extent than if they did not win it.  They now have additional bargaining power over Tatts, that they previously did not have.  Remember, they are also building a decent profit margin (cream) onto the tickets that they buy from Tatts, they have room to move cost-wise if need be.

If anything they could be a prime takeover target for one of the bigger players  (perhaps Lottomatica).


----------



## skc (12 June 2012)

Ves said:


> In the case of JIN, they have currently issued stock options to two very senior US lottery executives, only able to be taken up in the event that they win a USA contract.  I think this in itself helps mitigate some of the risks about splurging for US opportunities that may or may not come. Not sure why else these US executives would work for "free" unless they had some confidence in securing a contract.




Executive / employee options exists in most US companies - even working level staff are incentivised with options. The use of options (and the employee's acceptance of them as incentives) has absolutely no bearing on the chance of success of the venture imo. 



Ves said:


> I don't think the last line here is as risky as it was six months ago.  The SA Lotteries contract insulates them from this to a greater extent than if they did not win it.  They now have additional bargaining power over Tatts, that they previously did not have.  Remember, they are also building a decent profit margin (cream) onto the tickets that they buy from Tatts, they have room to move cost-wise if need be.




Can you explain why the SA lotteries contract create bargaining power over Tatts?



Ves said:


> The risks are their for all to see, and I have definitely considered them. This is where the great unknown of investing for the future comes into it and you have to trust yourself and control the risks as much as possible  (in your case avoid the company, in my case a very small position).




Very sensible. This is what I find interesting with this type of "investing". With a very large range of outcome, the share price is determined by the opinion of the marginal buyer/seller. So the share price movement, in the absence of real confirmative news, will be driven by sentiment and money flow. You can argue that JIN is worth 40c to $1.20 and you wouldn't be wrong. I believe a trader has the advantage in this kind of situation, trading within this range, following sentiment and flow, with appropriate stops. You'd only achieve high confidence/ good risk-adjusted investing at below the sensible price range.


----------



## Ves (12 June 2012)

skc said:


> Can you explain why the SA lotteries contract create bargaining power over Tatts?



Sure.  Lotteries in Australia are operated in a national bloc. The lottery companies (Tatts, Intralot, SA Lotteries) operate and market the games in their respective states, but these games are often sydnicated on a national level so that winnings can be pooled from all tickets sold across the country.  Therefore, in states that allow selling of tickets interstate via the internet JIN can now choose whether to buy the tickets that they on-sell to customers from Tatts or SA Lotteries.  This obviously isn't allowed in all states however (fairly certain QLD is an example of this).

I think that this puts them in a better position than if they had not won the SA Lotteries contract.


----------



## Ves (12 June 2012)

skc said:


> Executive / employee options exists in most US companies - even working level staff are incentivised with options. The use of options (and the employee's acceptance of them as incentives) has absolutely no bearing on the chance of success of the venture imo.



No it probably doesn't - but if they do not succeed then JIN owes them nothing. Certainly better than paying for no result.  My comment was more in relation to JIN wasting money chasing the big bucks in the US - I think that this demonstrates that they are willing to be sensible about it  (at least from what we can tell in the beginning).


----------



## skc (12 June 2012)

Ves said:


> Sure.  Lotteries in Australia are operated in a national bloc. The lottery companies (Tatts, Intralot, SA Lotteries) operate and market the games in their respective states, but these games are often sydnicated on a national level so that winnings can be pooled from all tickets sold across the country.  Therefore, in states that allow selling of tickets interstate via the internet JIN can now choose whether to buy the tickets that they on-sell to customers from Tatts or SA Lotteries.  This obviously isn't allowed in all states however (fairly certain QLD is an example of this).
> 
> I think that this puts them in a better position than if they had not won the SA Lotteries contract.




I was not aware of this. If this is the case it puts them in a pretty strong position - not so much to bargain with Tatts but it basically changes their DCF valuation from 2 years to 5 years. Yet that announcement was not marked as market sensitive?!

Do you have a reference as to where you got this info? Was it in a company presentation?


----------



## Ves (12 June 2012)

skc said:


> I was not aware of this. If this is the case it puts them in a pretty strong position - not so much to bargain with Tatts but it basically changes their DCF valuation from 2 years to 5 years. Yet that announcement was not marked as market sensitive?!
> 
> Do you have a reference as to where you got this info? Was it in a company presentation?



It's amazing how they didn't mark it as market sensitive. And I think that is why it was never priced in  (the major price rises seem to have come from the US announcement - the market always fancies "blue sky" fantasies).

http://en.wikipedia.org/wiki/Lotteries_in_Australia

Have a read of this - it describes it fairly well.  The company announcements do offer some insight, but some of it you have to piece together.

I am pretty sure that the SA Lotteries contract is 5 years with a 5 year option by the way. Also remember that currently JIN has one million customers on their database.  Tatts has no direct access to these - they would have to run a full-marketing campaign to start poaching them IMO. It's a bit of a double-edged sword for Tatts.  JIN is both a competitor and a source of revenue - and I think the market is mis-interpreting that relationship, which has the potential for mispricing.  

Honestly if they keep selling the amount of tickets that they have been this year, their cash balance will at least double by the time 2014 comes around.  As you said, if they mis-use that cash it's worth nothing - but the optimist in me says have they done anything poorly with it so far?  What if they put it to good use or even returned it to shareholders?


----------



## McLovin (13 June 2012)

Ves said:


> Sure.  Lotteries in Australia are operated in a national bloc. The lottery companies (Tatts, Intralot, SA Lotteries) operate and market the games in their respective states, but these games are often sydnicated on a national level so that winnings can be pooled from all tickets sold across the country.  Therefore, in states that allow selling of tickets interstate via the internet JIN can now choose whether to buy the tickets that they on-sell to customers from Tatts or SA Lotteries.  This obviously isn't allowed in all states however (fairly certain QLD is an example of this).
> 
> I think that this puts them in a better position than if they had not won the SA Lotteries contract.




I didn't know this, thanks. 

So at the end of the day, these guys just charge a premium for something I can buy online for the same price as in store?


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## Ves (13 June 2012)

McLovin said:


> I didn't know this, thanks.
> 
> So at the end of the day, these guys just charge a premium for something I can buy online for the same price as in store?



They initially charged a premium to cover costs of their website and technology development, but found over-time that consumers are not as price conscious with lottery tickets as they are other items.  It seems an extra $2 or $3 is nothing compared to the promises of the riches that a big jackpot conjures up in their dreams.

No guarantee that this will always be the case; but Australia only has 7% online penetration of lottery sales compared to much higher levels in parts of Europe, so the industry will grow and JIN looks fairly well placed to take advantage of it IMO.


----------



## McLovin (13 June 2012)

Ves said:


> They initially charged a premium to cover costs of their website and technology development, but found over-time that consumers are not as price conscious with lottery tickets as they are other items.  It seems an extra $2 or $3 is nothing compared to the promises of the riches that a big jackpot conjures up in their dreams.
> 
> No guarantee that this will always be the case; but Australia only has 7% online penetration of lottery sales compared to much higher levels in parts of Europe, so the industry will grow and JIN looks fairly well placed to take advantage of it IMO.




Thanks

It will be interesting to see how this plays out, over the next few years.


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## Vader (13 June 2012)

A few notes to add that you might find interesting (I don't own any shares, but do know the company - though I haven't kept comlpetely up to date with them over the last 5 or so years).


Jumbo is a survivor of the tech bubble (asx code was JUM back then, has gone through a merger and a demerger in between).
 Started life with the concept of developing online shopping malls
 CEO is a pretty smart operator and is generally a step or two ahead of things that are happening IMO... I have complete faith that he will always do what is best for shareholders, the company is his baby and he knows how to survive tough times.
 Prior to buying OzLotteries.com in 2005/6(?) they earned the majority of their money selling online tickests for the RSL prize homes and also selling cigarettes online, duty free, via Switzerland... That industry started to change quickly (supply issues, legalities etc.). At the time Jumbo had some small interests in a couple of online casinos (and the RSL prize home ticket sales), spent a bit of time feeling out a couple of options in related industries before moving quite quickly to take over OzLotteries.com and move all focus to that (marketing and selling online had always been a core component of the business). If you start to see them branching out into other industries, you'll know they are starting to get a bit nervous about cashflows over the next couple of years 
 As mentioned above, the key lotteries in Australia (Saturday lotto, powerball, ozlotto) are syndicated nationally, so having a license in one jurisdiction is enough to sell those tickets. There is some room for complication (i.e. Tatts sell tickets online in Qld and while it has been some time since I last looked at the legislation, I think it's complicated further given that Jumbo are also located in Qld)
 Unless things have changed in the past few years (which they quite possibly have), they also operate the point of sale for lottery sales in several pacific island nations - which I believe was under the NSW lotteries license. Not sure if anything changed there when NSW privatised their lottery a few years ago, but I suspect that (NSW privitisation) was a key driver for getting the SA online lottery license (insurance basically).
 The've been looking at potential Europe and US licencses since the day they bought OzLotteries.com... so I wouldn't put too much hope in that - it's a very tight, protected and exclusive market as you might imagine, though if the opportunity does arise I would certainly expect them to expand quite quickly.
 Interesting to note the CEO just sold about $500k worth of shares a week or so ago. If it turns out the current price is getting near the top I would expect him to pour most of that money back in at a later date when the price gets low again... either that or he might have just bought a new porsche 

IMO, yes they are a high risk option. They are a small company and I have no idea whether they can continue to grow profits substantially over the next few years, but they are helped by low costs and good margins. I've got no problems predicting that they will still be around in 10 years time, but wether they are still selling Australian Lottery tickets in 10 years is another question altogether (they are doing everything right, but continuation of licenses isn't something under their control).


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## Ves (14 June 2012)

Thanks Vader - I certainly didn't know about some of those little tidbits!


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## ROE (22 August 2012)

beautiful set of number

profit up 39% 
dividend increase 100%

Network effect certainly play apart with this result, it can only get better from here.
Stage 1: first mover advantage Stage 2: Network effect .. Stage 3: yet to play out...

Still holding and hang out they may bag Western Australia Market...


----------



## ROE (22 August 2012)

http://www.brrmedia.com/event/102193/mike-veverka-ceo

Customers database up, these guys use technology very cleverly 
to drive grow in customer database and sales much like Dominos Pizza.

all this without counting SA revenue, that will be up and running in October.


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## Ves (22 August 2012)

Rock solid result.  Completely blew brokers & analyst's estimates out the water (the few that cover it).

Still growth left in Australia, but the big upside is in the US.


----------



## ROE (22 August 2012)

Ves said:


> Rock solid result.  Completely blew brokers & analyst's estimates out the water (the few that cover it).
> 
> Still growth left in Australia, but the big upside is in the US.




May update upper guidance is 6.2m they did a 6.7m Amazing, all in 2 months space.
not even got a 1 sentence mentioned on AFR  BHP takes Centre stage today


----------



## Ves (22 August 2012)

ROE said:


> May update upper guidance is 6.2m they did a 6.7m Amazing, all in 2 months space.
> not even got a 1 sentence mentioned on AFR  BHP takes Centre stage today



Let's hope they turn into a serial under-promiser, over-deliverer!


----------



## VSntchr (22 August 2012)

I think that Mike may have low balled the guidance in order to surprise on the upside..
Still, as a holder I'm happy with the result and continue to hold with a big


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## McLovin (22 August 2012)

Well done. Seems like a pretty good result. I may have to eat humble pie on this one. Time will tell.


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## ROE (23 August 2012)

McLovin said:


> Well done. Seems like a pretty good result. I may have to eat humble pie on this one. Time will tell.




All informed educated decisions at the end of the day, could go either way....I dont take other people negative views as a bad things give me more information to research in those area of concerned.

I am now more optimistic on this business than when I first bought in...I calculated it as a mine with end date 2013
but in the last 12-18 months look like it discovered more resource to mine...

if it bag another contract, it should be rerate as a growth stock and the leader in its market much like carsales seek etc....


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## herzy (23 August 2012)

ROE and others, at what point are you intending to sell?


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## Ves (23 August 2012)

herzy said:


> ROE and others, at what point are you intending to sell?



I won't be influenced by market price in my decision  -  I would only sell if the fundamentals started to materially deteriorate.   It's hard to say what that would look like in advance, but it's handy to keep an eye on margins, subscription numbers, customer participation and of course the returns they are getting on the capital they are putting into technology and marketing.


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## ROE (23 August 2012)

herzy said:


> ROE and others, at what point are you intending to sell?




Not for a while, it still has plenty of potential and I have all the time in the world to wait until then
I am not worry about volatility....I am a business owner sort of investor, not trading for profit

As long as it provide me reasonable yield and business intact and it has further growth options ahead I continue to hold...this is less than CCP 6 baggers and I still hold CCP...

I Follow Phil Fisher principles when to sell.. in the book common stock uncommon profit...


----------



## herzy (23 August 2012)

Ves said:


> I won't be influenced by market price in my decision  -  I would only sell if the fundamentals started to materially deteriorate.   It's hard to say what that would look like in advance, but it's handy to keep an eye on margins, subscription numbers, customer participation and of course the returns they are getting on the capital they are putting into technology and marketing.






ROE said:


> Not for a while, it still has plenty of potential and I have all the time in the world to wait until then
> I am not worry about volatility....I am a business owner sort of investor, not trading for profit
> 
> As long as it provide me reasonable yield and business intact and it has further growth options ahead I continue to hold...this is less than CCP 6 baggers and I still hold CCP...
> ...




Fair enough, pretty much what I was expecting. Given that their is volatility though, isn't there merit in accumulating shares (i.e. selling high and buying low over and over)? Still trying to iron out my strategy. I've worked out what to buy, now trying to work out when to sell. I'm about 20% up on JIN, which is quite nice, but as you say the fundamentals are still good. But of course, if I sold some now at say 150, then rebought some more at 125, I'd be better positioned for long-term growth... Of course the flip-side is that they never go down again, but in the current climate that seems unlikely. I'd value both of your thoughts (and anyone elses) both on JIN and when value investing generally.


----------



## ROE (23 August 2012)

herzy said:


> Fair enough, pretty much what I was expecting. Given that their is volatility though, isn't there merit in accumulating shares (i.e. selling high and buying low over and over)? Still trying to iron out my strategy. I've worked out what to buy, now trying to work out when to sell. I'm about 20% up on JIN, which is quite nice, but as you say the fundamentals are still good. But of course, if I sold some now at say 150, then rebought some more at 125, I'd be better positioned for long-term growth... Of course the flip-side is that they never go down again, but in the current climate that seems unlikely. I'd value both of your thoughts (and anyone elses) both on JIN and when value investing generally.




There are many ways to skin a cat and what works for you I think you keep doing it

buy and hold vs trading vs buy low sell high they all have their advantages and disadvantages

I chose to buy and hold mostly for dividend and the income stream, right or wrong it is something I always do and will be doing...

I do sell in and out but that is purely on business fundamental and or when I need the cash for something big.

I have surplus cash each month and my dividend income stream is reasonably large so if I need the cash for holiday or buy a car I can always spend the dividend or the surplus cash so no need for me to sell stocks unless Phil Fisher criteria is triggered.


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## Ves (23 August 2012)

herzy said:


> Fair enough, pretty much what I was expecting. Given that their is volatility though, isn't there merit in accumulating shares (i.e. selling high and buying low over and over)? Still trying to iron out my strategy. I've worked out what to buy, now trying to work out when to sell. I'm about 20% up on JIN, which is quite nice, but as you say the fundamentals are still good. But of course, if I sold some now at say 150, then rebought some more at 125, I'd be better positioned for long-term growth... Of course the flip-side is that they never go down again, but in the current climate that seems unlikely. I'd value both of your thoughts (and anyone elses) both on JIN and when value investing generally.



I don't see the point in having two masters  (technical and fundamental).  Every time I have tried it is like playing tug of war with your mind. Which one do you listen to when they disagree?  Timing the market with perfection to etch every little gain out of a stock is much, much harder to put in practice than it seems.  With JIN, if you trade in and out frequently, what if they land a US contract and it doubles over night and you were out of the stock waiting for a decline?


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## herzy (23 August 2012)

ROE said:


> I chose to buy and hold mostly for dividend and the income stream, right or wrong it is something I always do and will be doing...
> 
> I have surplus cash each month and my dividend income stream is reasonably large so if I need the cash for holiday or buy a car I can always spend the dividend or the surplus cash so no need for me to sell stocks unless Phil Fisher criteria is triggered.




Thanks Ves for your comments as well. Excellent point with the US contract.

I guess you're lucky ROE that you have enough cash to play with that you can buy the shares in whichever company interests you, rather than choosing between companies. On second thought, that's probably much more due to skill and planning than lucky. Anywho...

In terms of buying and holding for dividend stream, surely JIN seems like an odd candidate? There are many companies with a much higher payout than JIN (e.g. AAD), albeit maybe with less growth potential. But that would go more towards capital growth than dividends?


----------



## ROE (23 August 2012)

herzy said:


> Thanks Ves for your comments as well. Excellent point with the US contract.
> 
> I guess you're lucky ROE that you have enough cash to play with that you can buy the shares in whichever company interests you, rather than choosing between companies. On second thought, that's probably much more due to skill and planning than lucky. Anywho...
> 
> In terms of buying and holding for dividend stream, surely JIN seems like an odd candidate? There are many companies with a much higher payout than JIN (e.g. AAD), albeit maybe with less growth potential. But that would go more towards capital growth than dividends?




JIN at current yield of 3c give me close to 7.5c fully franked on my entry price
now share gone up a couple hundred % is what market responding to earning increase, not much I can do apart from
selling out which I dont want just yet....

I dont want to waste space on stock thread talking about general investment stuff but I have very clear
strategy regarding dividend, when to sell etc...so seriously it doesn't bother me if the stock done a 100% and I need to freak out whether to sell or not .... I am over that sort of stuff,  I'm more of an old man with a Toyota chucking along rather than a teenager with a fast car and doing burn out and spins 

same stuff was discussed on NVT threat I still hold NVT and just pocket 20c dividend a year despite all the Volatility....I'm out unless it's JIN related news post...


----------



## herzy (23 August 2012)

ROE said:


> JIN at current yield of 3c give me close to 7.5c fully franked on my entry price
> now share gone up a couple hundred % is what market responding to earning increase, not much I can do apart from
> selling out which I dont want just yet....
> 
> ...




Sorry, I forgot that JIN was MUCH cheaper not so long ago, when you were smart enough to buy - which would of course greatly affect div yield. Thanks again for your insights ROE, sorry everyone else from distracting from the thread.


----------



## ROE (24 August 2012)

http://www.ajc.com/news/georgia-politics-elections/online-georgia-lottery-sales-1480981.html

Keep eyes and ear open oct-nov timeline


----------



## herzy (25 August 2012)

Just to add onto what ROE has said, since the restriction of the Wire Transfer Act earlier this year, expansion into the US seems more and more promising - which would have a HUGE impact on JIN. 

Here's an article that gives a bit of insight into the legal side of things.
http://www.haslaw.com/wp-content/uploads/2012/04/Hichar-Article.pdf


----------



## VSntchr (7 September 2012)

Announcement from JIN this morning that they have developed and are now implementing new technologies into their business model..

From statement: 







> 1. Jumbo Smart Signs allow customers that see a lottery sign to instantly
> ‘snap, tap or check in’ to buy tickets, check results and redeem in store
> offers using their smartphone. ‘Snap’ refers to the familiar QR code (Quick
> Response Code);  ‘Tap’ refers to NFC (Near Field Communications); and
> ...




Clearly its technology such as this is leading the way to retailers accepting the online influence and integrating it into their models aswell..

Will be interesting to see which retailers decide to use the signs and how the commissions are split between the parties...


----------



## Gringotts Bank (7 September 2012)

VSntchr said:


> Announcement from JIN this morning that they have developed and are now implementing new technologies into their business model..
> 
> From statement:
> 
> ...




Yeh I like this one snatch (may I call you snatch?  ).  I'm going to wait for $1.51 and get some then.  Maybe early next week...


----------



## ROE (7 September 2012)

VSntchr said:


> Announcement from JIN this morning that they have developed and are now implementing new technologies into their business model..
> 
> From statement:
> 
> ...




The digital scratchies look promising, big US market for scratchies and digital scratchies could be made available in Australia in the future


----------



## Ves (7 September 2012)

ROE said:


> The digital scratchies look promising, big US market for scratchies and digital scratchies could be made available in Australia in the future



Surely the government will make it legal eventually... despite pressure from the independants and Greens to curb gambling in Australia.  They will get their fair share of taxes, which they will surely need if our tax base is set to shrink...


----------



## VSntchr (7 September 2012)

Gringotts Bank said:


> (may I call you snatch?  ).




No objections from me haha 




> Surely the government will make it legal eventually... despite pressure from the independants and Greens to curb gambling in Australia. They will get their fair share of taxes, which they will surely need if our tax base is set to shrink...




I echo this thinking. Labour is obsessed with having a budget surplus at the moment, so I feel the risk of laws hardening around heavily taxed industries is presently low...


----------



## Ves (21 September 2012)

Tech/A or Boggo or Canoz  - what does the bar on the 12th of September mean in the context of today's price action?   It looks to have rejected the low on that that day, however subsequent price action seems to indicate that someone is trying to get out.  Today's bar looks indecisive, some selling at top levels, but buyer's meeting supply at the lower range. The fact that it breached the previous low on the 12th looks significant...

I couldn't draw a wave count on this chart for any period over the last year if I tried. 

Again pure curiousity on my behalf...


----------



## tech/a (21 September 2012)

The 12 th bar would have you anticipating support at the low with supply being swamped.
So you would anticipate the same on Monday
Your not going to know until trading begins on Monday.
So in the context of the whole chart supply is being exhausted at some levels
However supply keeps swamping buyers as sellers watch to see if support holds.

I would be waiting to see a final very high volume down bar before feeling as though supply is near to exhaustion.


----------



## Ves (21 September 2012)

I take it that stocks that have big impulsive moves (ie. 800% rises like this one) become very volatile after the  initial move ends because the next phase starts seeing more supply to meet whatever demand is left?


----------



## ROE (27 September 2012)

bag another contract 5 years for NT


----------



## Huskar (28 September 2012)

ROE said:


> bag another contract 5 years for NT




Your calls have been spot on with Jumbo ROE. What does this contract win mean for the other states? Surely it makes it more likely Tatts will join with rather than fight JIN in other states as well?


----------



## skc (28 September 2012)

Huskar said:


> Your calls have been spot on with Jumbo ROE. What does this contract win mean for the other states? Surely it makes it more likely Tatts will join with rather than fight JIN in other states as well?




That would be the most logical deduction and one that the market seems to think as well.

The ASX screwed up the announcement release timing yesterday and forgot to put JIN on a 10minute halt on a market sensitive announcement. 

Which suited me just fine and let me took a small bite at $1.20.


----------



## ROE (29 September 2012)

Another pump and dump gone wrong.

I just love his perfect timing every time...exiting stock at their top, except this time
after the post a few days later JIN score a 5 Years contract with NT rather than a profit down grade  

http://www.sharecafe.com.au/roger_m.asp?a=AV&ai=24820

I'm waiting for pump and dump on CCP with interest...


----------



## robusta (29 September 2012)

ROE said:


> Another pump and dump gone wrong.
> 
> I just love his perfect timing every time...exiting stock at their top, except this time
> after the post a few days later JIN score a 5 Years contract with NT rather than a profit down grade
> ...




He talks like a value investor but it seem to me he acts more like a trend follower with the reliance on analyst forecasts and bright prospects. Anyways after backing a few of his winners and a few loosers I now tend to take more interest after he dumps a stock.


----------



## ROE (18 October 2012)

another 9% today.....no news...last few time when these big jump happen good news follow
we will wait and see...


----------



## prawn_86 (19 October 2012)

ROE said:


> another 9% today.....no news...last few time when these big jump happen good news follow
> we will wait and see...




I know they were at some form of Small Cap Conference this week, so possibly it is buying on the back of that


----------



## Huskar (19 October 2012)

The volatility on this stock is amazing. And volatility = opportunity


----------



## ROE (19 October 2012)

Huskar said:


> The volatility on this stock is amazing. And volatility = opportunity




on the upside ....as soon as it dipped it rally hard back...


----------



## herzy (28 October 2012)

$70 million jackpot! More profits for JIN...


----------



## VSntchr (31 October 2012)

herzy said:


> $70 million jackpot! More profits for JIN...




Make that $100m now. Surely this will affect JIN's HY result...I heard on the news that 1 in 3 aussies of legal age had a ticket in last nights draw, that will be equal or higher for next weeks record jackpot.

Also, the CEO address yesterday gave a hint at the buzz that must be going on in the JUMBO office. Mike and his team seem super committed/motivated to achieve their long standing vision. They've got my backing..now just time to check in every now and then and make sure things are going to plan.

IMO despite the run up, this one is still cheap. I think its worth a little over $2 - WITHOUT taking into account any of the offshore operations - which could be a windfall...


----------



## Ves (31 October 2012)

I went to the AGM last night - good bunch of directors, had a chat with all of them.

They would not offer any guidance for 2013 because of the current jackpot run will be very material to any estimates.  Let's just say that if you have a calculator and know what numbers to plug in you can get a good idea thus far.  The only major expense that you will not be able to determine is the US marketing expenses, which they did not elaborate on.


----------



## ROE (31 October 2012)

Their facebooks is building momentum as well ...
number of like goes up each new big jackpot 

I take a crack and say their earning grow will be 25% plus this year


----------



## VSntchr (31 October 2012)

ROE said:


> Their facebooks is building momentum as well ...
> number of like goes up each new big jackpot
> 
> I take a crack and say their earning grow will be 25% plus this year




FB likes have tripled in the last 6 months!!


----------



## herzy (1 November 2012)

VSntchr said:


> FB likes have tripled in the last 6 months!!




^ *Like*


----------



## ROE (1 November 2012)

people over hotcopper went to JIN AGM and said 70m jackpot day they sign up 3500 new customers per hour 
I am sure 100m will be even bigger


----------



## VSntchr (1 November 2012)

ROE said:


> people over hotcopper went to JIN AGM and said 70m jackpot day they sign up 3500 new customers per hour
> I am sure 100m will be even bigger




Nice!
When you start seeing numbers like this, you realise that these jackpots are great free marketing for JUMBO...and online lottery in general.

After more people try the online method, they see how easy it is...and they start doing it more often..and we all know how quickly social media trends can spread....

Watch this space over the next 12 months!


----------



## Ves (1 November 2012)

ROE said:


> people over hotcopper went to JIN AGM and said 70m jackpot day they sign up 3500 new customers per hour
> I am sure 100m will be even bigger




I heard that conversation,  I thought I heard that as $3,500 revenue for per minute on Tuesday (jackpot day) when the systems were in overdrive.


----------



## ROE (8 November 2012)

who is going to throw a $2 party?


----------



## VSntchr (8 November 2012)

ROE said:


> who is going to throw a $2 party?




Yep sounds good haha!

I can imagine there would be a pretty good vibe at that party!!

The meteoric rise of JUMBO is unstabilising my portfolio weightings, might need to do some adjusting...


----------



## westboy (8 November 2012)

Before any of you start triming stocks because you are overweight on a stock please read this.

Most wont get it but that is fine.

http://valuebin.wordpress.com/2011/01/27/warren-buffett-on-investing-small-sums-of-money/

Happy investing

Cheers


----------



## ROE (8 November 2012)

The secret is out 

When I was doing this there was barely anyone covering small caps or micro caps

now you got every man and his dog doing it and now you even have micro/small caps fund managers 
all they do is looking for micro caps and small caps.

I like to tell people small and micro caps are risky, go buy Woolies and CBA and BHP


----------



## westboy (11 November 2012)

http://www.wfunds.com.au/fundreports/ALF_2012_Sept_Q3_WEBREADY_V2.pdf

This is worth a read I think

Cheers


----------



## westboy (18 November 2012)

$2 is holding well
..........Woot


----------



## fonglooi (18 November 2012)

westboy said:


> $2 is holding well
> ..........Woot



how is the  usa investment  going? Is they any risk of losing money? and when will the company giving out dividend?


----------



## herzy (18 November 2012)

fonglooi said:


> how is the  usa investment  going? Is they any risk of losing money? and when will the company giving out dividend?




The company is already paying a dividend, and I think is still fair to good value based purely on Aus operations. As for USA, I have no idea - doesn't seem to expensive, and the potential there is huge. However, I have no idea as to prospects for success. Anything they do there is (imo) a bonus...


----------



## westboy (19 November 2012)

fonglooi, They are spending a fairly modest sum on trying to get overseas licences, If they get one they have a warchest of capital to through a it, but a licence is a license to print money if theyhave the capital to though at it which JIN does. 

Herzy is right, anything that happens overseas is a bonus.


Cheers


----------



## Vader (29 November 2012)

MASSIVE announcement by Jumbo today...

Jumbo expands into USA through joint venture

On the face of it, this sounds like an amazing opportunity to start cashing in on the US lottery market... I wouldn't mind finding out more about this Retail Gaming Solutions though, can't seem to find much about them.


----------



## ROE (29 November 2012)

Step in the right direction, successful business requires many year of hard work and laying foundation..

Jumbo is going in the right direction...


----------



## VSntchr (30 November 2012)

JUMBO expands into MEXICO!

From announcement:
● Signed  long-term  exclusive agreements with Sorteo Games (“Sorteo”)
which holds two national lottery systems (“LoterÃ­a Nacional” and 
“PronÃ³sticos”) and distribution licenses in Mexico

● Exclusive agreement includes rights  to sell official “LoterÃ­a Nacional” and 
“PronÃ³sticos” Mexican lotteries in Mexico via internet and mobile.

● Strategic investment of US$2 million in Sorteo Games Inc, plus an option 
for an additional  US$3 million, to assist with the expansion of the 
business in Latin America


Two announcements in two days.
No earnings information given, so could take a while for the market to digest this...but obviously is a MASSIVE move for JIN


----------



## ROE (1 December 2012)

http://www.marketwatch.com/story/so...vestment-and-partnership-agreement-2012-11-30

Market has not factor in these deals.
in  3-5 years their earning could be double what it is today


----------



## Out Too Soon (12 December 2012)

Wow! bought yesterday @ 2.23, already looking good 

Edit: because I really should give some explanation 
After the uptrend there was a gap down on Nov the 26th following that yucky wedge triangle. Then there was a price spike both down & up at the start of the healthy upward triangle. ie I expected a good result from all these signs/price actions. 
PS: have been watching JIN for a week or so & like the fundamentals also 
Not so sure about a continued uptrend in the next few days but I'd say it's better than 50%.


----------



## ROE (12 December 2012)

Profit upgrade, more and more people joining JIN every year, their customers database grow yet again
18m in cold hard cash, no debt, dividend likely to increase what is not to like 

10 baggers soon


----------



## Boggo (13 December 2012)

ROE said:


> Profit upgrade, more and more people joining JIN every year, their customers database grow yet again
> 18m in cold hard cash, no debt, dividend likely to increase what is not to like
> 
> 10 baggers soon




Hard to ignore this type of pattern too 

(click to expand)


----------



## Out Too Soon (20 December 2012)

Wow, lucky I'm a short term trader & already took profits, JIN was sailing along nicely & suddenly almost 10% drop, no explanation I can see on ASX as yet, feel sorry for any small investors if they were still holding. Unless there is some reason other than big profit taking then I guess the sp will climb again. Anyone with thoughts or info? :dunno:


----------



## VSntchr (21 December 2012)

No need to feel sorry for small investors, pullbacks are a great time to load up more stock.

Easy for a big mover like JIN to fall this far...its really only back to what it was about a week ago...hardly worth worrying about!


----------



## ROE (11 February 2013)

After a week or two resisting $3, today it doing a Usain Bolt to the finish line close at $3.14 an easy 5.5%
they need to start doing a CCP soon with 50-100% dividend increase every half 

I'm expecting at least 50% increase in dividend this half


----------



## VSntchr (11 February 2013)

ROE said:


> After a week or two resisting $3, today it doing a Usain Bolt to the finish line close at $3.14 an easy 5.5%
> they need to start doing a CCP soon with 50-100% dividend increase every half
> 
> I'm expecting at least 50% increase in dividend this half




Great run continuing.
Dissapointed I sold some at 2.50 then more at 2.90ish. Buuttt, its still by far my biggest holding...so I had to exercise some portfolio management!

Results will be interesting...


----------



## Ves (11 February 2013)

ROE said:


> I'm expecting at least 50% increase in dividend this half



Earnings will be pretty flat because of the drag by overseas marketing costs, the accounting changes and because of the options exercised.  As they said at the 2012 AGM - they won't payout more than 20-30% of earnings whilst there are so many growth avenues available.

I personally don't see an increase in divvy this year.


----------



## Ves (21 February 2013)

This will get hammered tomorrow.  Missed low-end of NPAT guidance released in December.


----------



## ROE (21 February 2013)

The joy of small caps and spectacular run.

TTV 59m, December forecast 58m-62m and I think the market price for $62m 

not meeting the upper end but still ok


----------



## Ves (21 February 2013)

ROE said:


> The joy of small caps and spectacular run.
> 
> TTV 59m, December forecast 58m-62m and I think the market price for $62m
> 
> not meeting the upper end but still ok



I'm not saying I didn't expect it though - it's just that the market has run it so hard that it can only be bloodbath from here. 

Still holding - the marketing expenditure overseas drags the profit down a fair bit (as do the accounting changes), however I must admit the domestic marketing expenditure does not appear to be having nearly as much effect as previous reports.


----------



## craft (22 February 2013)

Ves said:


> This will get hammered tomorrow.  Missed low-end of NPAT guidance released in December.




Whilst at the same time TTS the owner of the OZ Lotto product and Brand (not to be confused, but probably is, with JIN's Oz lotteries web site) seems to be having a good time of it on line.



> The group's online revenue from lotteries grew by 52 per cent, and wagering online sales grew by 22 per cent.
> 
> "We do believe there are a lot of opportunities to take the online business further," Tatts chief executive Robbie Cooke said on Thursday.
> 
> ...




Looking forward.



> In considering the likely second half performance of the lotteries operation it would be unreasonable to expect a similar jackpot run to the exceptional levels experienced in the first half, Tatts said.





http://www.thebull.com.au/articles/a/35724-tatts-to-pursue-more-online-opportunities.html


----------



## Ves (7 March 2013)

Sold out this morning - good luck to those still holding.


----------



## herzy (7 March 2013)

Ves said:


> Sold out this morning - good luck to those still holding.




Not happy with future prospects? Think price will crash again and looking to buy in again cheaper?


----------



## Ves (7 March 2013)

herzy said:


> Not happy with future prospects? Think price will crash again and looking to buy in again cheaper?



A combination of things, but the main thing is the absence of a competitive advantage - I think competition is starting to heat up in Australia with Tatts (especilly given their half-year report).  At some point Tatts is going to attack their customer base - and I don't see how they can fend them off when Tatts has a bigger advertising kitty and better pricing power. Tatts own the content, and JIN effectively on-sell it (and pay TTS a commission). Take out the premium pricing of lottery tickets used by JIN and how much profit do they make?   It may be a slow, drawn out affair, but I can't see JIN winning the battle long-term.

The second is my hesitation with the huge amounts of cash they are starting to throwing at opportunities. Look at the start-up returns in Australia over the last decade - they've only just came to fruition. I have no way of knowing what returns they will make (if any) and the competition in these markets is much heavier than Australia.   It's impossible to value at this point for that reason alone.  Are these announcements just a distraction to get institutional investors on the books?


----------



## Booboo2 (7 March 2013)

Ves said:


> A combination of things, but the main thing is the absence of a competitive advantage -
> In the IT space their competitive advantage is the ease of use or interface.  Go sign up on Tatts and see how many more clicks you need cf Jumbo.  Tatts have only just begun so their 52% rise in online sales is quite poor really given the price advantage.  I expected Jin revenue in aust to be down the last half, but they have held up their revenue well.  Unexpectedly!
> 
> Are these announcements just a distraction to get institutional investors on the books?




Tough shareholder you are!  They can only announce if they get the right to sell and this expansion costs money.  The new startups are like finding double the resource in a mining stock and given this company has no debt, is using it's own cash in bank to do it, paying a dividend at the same time, that's the best a shareholder can expect!


----------



## McLovin (30 April 2013)

When I first looked at these guys I didn't like the fact they were capitalising certain items (customer acquisition costs + website development) it just didn't smell right. They stopped capitalising customer acquisitions last year and yesterday in their updated profit guidance (which was pretty underwhelming) there was this red flag.



> Tax concession overclaim.
> Jumbo Interactive Limited (ASX:JIN) wishes to advise
> shareholders of a tax shortfall relating to prior financial years. Jumbo undertakes a
> large R&
> ...




OK, it's a non-cash adjustment but I don't like accounting funny business.


----------



## Ves (30 April 2013)

I'm glad I sold.   The latest profit update was awful... in a fast growing sector profit from Australian operations has shrunk vs the pcp.  They are losing market share to Tatts and their margins are being attacked IMO.


----------



## VSntchr (30 April 2013)

Ves said:


> I'm glad I sold.   The latest profit update was awful... in a fast growing sector profit from Australian operations has shrunk vs the pcp.  They are losing market share to Tatts and their margins are being attacked IMO.




Yeah.
When you consider that a year ago they were talking about the conversion of Aus lotto to online moving up from 7% and now the only positives we hear are about the O/S expansion...it does agree with what you are saying.

When I analysed this one I was basing it on 15% growth year on domestic growth...when I saw the latest update my initial reaction was SHORT! Too bad I didn't


----------



## Ves (30 April 2013)

VSntchr said:


> Yeah.
> When I analysed this one I was basing it on 15% growth year on domestic growth...when I saw the latest update my initial reaction was SHORT! Too bad I didn't



I bought it a lot lower than today's price and based my valuation on current earnings being maintainable, with a probability that some growth was possible.   These companies are too hard to gauge to buy at higher earnings and higher multiples.


----------



## VSntchr (30 April 2013)

Ves said:


> I bought it a lot lower than today's price and based my valuation on current earnings being maintainable, with a probability that some growth was possible.   These companies are too hard to gauge to buy at higher earnings and higher multiples.




I agree with you, and in hindsight (ive learnt alot in the last 12 months) my valuation was probably quite optimistic/risky - but I never had it valued higher than around $2.20. Was only through the use of a rising stop loss that allowed me to get rid of the bulk of them for a much better price.


----------



## ROE (22 August 2013)

After all the negative talk it was a decent result....plenty of cash....customer based grow still
Very strong in Australia...more Customers money show more people are playing and keep cash in the account

Oversea expansion at a decent pace and fairly quick...

They got lottery reward running and start growing US customer based going
German and Mexico online in a few months.

Not expecting much money in short term but once they got decent size customers database
The power of leverage earning will kicks in


----------



## Ves (22 August 2013)

Have you looked at the Tatts result today, ROE?  

The TTS investor preso says that their online lottery sales grew by 35.2% in the last 12 months and now 8.2% of all lottery sales made by the company are online.    It looks like this will keep growing at a rapid clip.

Contrast this to JIN who had a revenue increase in the current financial year of 5%.

However, the CEO has the nerve to say in the JIN preso that internet lotteries are growing by 20% and 30% per annum in Australia.   

How come the major competitor who owns all of the intellectual property and branding for the games themselves that JIN feeds off is growing at 35% and JIN can only manage 5%?

Does JIN need to remove their "price premium" to continue growing and what affect does this have on their profitability?

If I was still a shareholder I would be asking those tough questions of my investment.


----------



## ROE (23 August 2013)

All valid questions, but I take a more liberal view and dont go into every little details because it worry you more than it shoud and you tend to act a little irrational sometimes...

I am not saying it works all the time but I do keep tab on it and it doesnt work out that bad for me.
I am more of a bigger pictures ..... 

Every stocks I own for a long time, it always has some sort of question mark of its earnings and other stuff if you go into little details....

I am more of a larger picture look .... Customer growing or losing? Do they continue to make money and has strong balance sheet .... 

There always period where your business is no good or face a bit of a hard time or whatever but I stick to it if the over picture is good because time will erase most of those little things...

If balance sheet goes bad or other key critical business fundamental change then yes I exit and question hard..

That really my thinking I am sure other has different methods....


----------



## herzy (22 April 2014)

With JIN's Mexico deal falling through, this share has been hammered in recent times. 

Too much, I think. It was higher than this pre-Mexico expansion, still has the Aussie base, and huge prospects in Germany (in my opinion). 

Could be a good time to buy cheap. I'm not going to, I've still got freehold from the last run-up.


----------



## McLovin (22 April 2014)

herzy said:


> Too much, I think. It was higher than this pre-Mexico expansion, still has the Aussie base, and huge prospects in Germany (in my opinion).






The Aussie base is going backwards per the December HY report. That's in the same environment that has Tatts reporting very strong growth in online lottery sales. It seems more like the competitive attack started 12-18 months ago and has revealed that JIN has very little going for it that can't be easily taken away by those who are operating the lotteries, as opposed to selling tickets. They do a very good job of selling the next big thing...First it was Australia, then USA, then Mexico, now Germany.

Again, The Australian business is going backwards while internet lottery ticket sales in Australia boom. It seems clear as daylight to me.


----------



## skc (22 April 2014)

McLovin said:


> The Aussie base is going backwards per the December HY report. That's in the same environment that has Tatts reporting very strong growth in online lottery sales. It seems more like the competitive attack started 12-18 months ago and has revealed that JIN has very little going for it that can't be easily taken away by those who are operating the lotteries, as opposed to selling tickets. They do a very good job of selling the next big thing...First it was Australia, then USA, then Mexico, now Germany.
> 
> Again, The Australian business is going backwards while internet lottery ticket sales in Australia boom. It seems clear as daylight to me.




JIN sells a standard Sat night pick at 85c each. The actual cost of the ticket is ~65.4c each, and you can buy them on Tatts website for the same price. 

http://www.ozlotteries.com/play/saturday-lotto/standard

https://tatts.com/nswlotteries/buy-lotto/purchase-ticket?product=LottoSaturday

Anyone who's a regular lotto player and has some google skill should have switched away from JIN already. I am actually surprised that they had any growth whatsoever.

P.S. My reserach is limited to a single product, so DYOR.


----------



## VSntchr (17 December 2015)

JIN with a guidance announcement out today. Looks like they are getting a handle on costs, with NPAT forecast to jump nicely. TTV and revenue growth is still looking strong albeit the growth rate moderating slightly.

It's been a very long time since i've looked at old Jumbo, so not much else to say...but the price certainly isn't expensive at a glance - market might be factoring some of SKC's comments above relating to a unsustainable model


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## ROE (19 August 2016)

Anyone still holding? I top up again at 80c not long ago and now the business start to shine again.
This is a sleeper business I reckon, when it does shine it will be very bright


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## galumay (19 August 2016)

I remember looking at it ROE, will have to go back and see what if any notes I made, I decided it wasnt for me for some reason!


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## ROE (21 April 2017)

Looterland making a move on JIN, back to glory day soon

http://www.afr.com/street-talk/lottoland-raids-asxlisted-lottery-tickets-seller-20170420-gvoswc


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## skc (21 April 2017)

ROE said:


> *Looterland *making a move on JIN, back to glory day soon
> 
> http://www.afr.com/street-talk/lottoland-raids-asxlisted-lottery-tickets-seller-20170420-gvoswc




Lol. It's not a bad name for a company that sells a product akin to tax on the poor.

It's right up there with other famous / honest brandnames like Ladbrokes and Evian.


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## pixel (21 April 2017)

skc said:


> Lol. It's not a bad name for a company that sells a product akin to tax on the poor.
> 
> It's right up there with other famous / honest brandnames like Ladbrokes and Evian.



I can't for the life of me understand how these predators are allowed to operate unchecked. While Lotto was run by the States, it was legally obliged to contribute a set percentage - about 50% if I remember correctly - to Community projects.
These bastards take the loot and disappear to some tax haven. Benefit to Communities nil, tax minimal, leaving gambling addicts in the gutter in their wake.
Disgusting!


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## skc (24 April 2017)

pixel said:


> I can't for the life of me understand how these predators are allowed to operate unchecked. While Lotto was run by the States, it was legally obliged to contribute a set percentage - about 50% if I remember correctly - to Community projects.
> These bastards take the loot and disappear to some tax haven. Benefit to Communities nil, tax minimal, leaving gambling addicts in the gutter in their wake.
> Disgusting!




I agree. It's totally wrong.

For those who don't know how Lottoland operates...they are basically a market maker on outcome of lotteries around the world. They probably don't even need approval from the underlying lotto operators to offer punters a bet.

Here's an article on their business model. http://www.news.com.au/finance/busi...t/news-story/16f869db9d8f1f6ebe11911892a0fbd3


> The business was unusual in the gaming and gambling industry operating in Australia at the time, and it still is. It involves betting on lottery outcomes rather than entering the lottery itself.
> 
> Players bet on the results of the biggest lotteries around the world, and now local draws too, and using an insurance-based model Lottoland is able to match the prize money offered in those jackpots.




This is why it's interesting that Lottoland has taken a stake in JIN, who's an online reseller of actual lotteries. If anything Lottoland's business actually undermines JIN's operations. Perhaps JIN has much less regulatory risks so Lottoland wants to hedge it's exposure.


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## pixel (24 April 2017)

skc said:


> they are basically a market maker on outcome of lotteries around the world.
> 
> _Players bet on the results of the biggest lotteries around the world, and now local draws too, and using an insurance-based model Lottoland is able to match the prize money offered in those jackpots._



One could wish that one or two lucky punters picked the $500M combo of the biggest US jackpot that they rave about in their annoying commercials.
But they'd probably simply go under, move any cash to a secret vault on Cayman or Virgin Islands, and declare bankruptcy in Australia or wherever the "winner" resided.
IMHO it's worse than any Nigerian inheritance scheme.


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## skc (24 April 2017)

pixel said:


> One could wish that one or two lucky punters picked the $500M combo of the biggest US jackpot that they rave about in their annoying commercials.
> But they'd probably simply go under, move any cash to a secret vault on Cayman or Virgin Islands, and declare bankruptcy in Australia or wherever the "winner" resided.
> IMHO it's worse than any Nigerian inheritance scheme.




According to the article linked, Lottoland has "insurance" on the lotto outcome, although what you outlined cannot be ruled out... not sure how much regulatory oversight there is on the insurance arrangement either.


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## peter2 (29 May 2018)

ROE said:


> Anyone still holding? I top up again at 80c not long ago and now the business start to shine again.
> This is a sleeper business I reckon, when it does shine it will be very bright




I had to go back a few years to find the latest comment on JIN. 

@ROE  got it spot on.


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## galumay (29 May 2018)

peter2 said:


> @ROE got it spot on.




I have followed @ROE and his fundamental analysis here and across a range of other forums, he would have one of the highest strike rates of any investor I have seen who made his analysis public. 

Its a pity he has largely disappeared from the online world, we are poorer for it.


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## JTLP (29 May 2018)

galumay said:


> I have followed @ROE and his fundamental analysis here and across a range of other forums, he would have one of the highest strike rates of any investor I have seen who made his analysis public.
> 
> Its a pity he has largely disappeared from the online world, we are poorer for it.




Except MXY - that one hurts! He did pick CCP, Smart Q and a few others from memory. He was/is a gun!


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## galumay (30 May 2018)

JTLP said:


> Except MXY - that one hurts!




If you mean MYX, I suspect he would say it hasnt finished playing out yet!


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## JTLP (30 May 2018)

galumay said:


> If you mean MYX, I suspect he would say it hasnt finished playing out yet!




I did and I hope it hasn’t. Would love a catalyst back to the halcyon days


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## peter2 (7 August 2018)

Looking at the line of punters at the newsagent tonight I'd have to be bullish JIN. 
JIN operates Ozlotteries and Powerball. The current huge jackpots on offer have ignited ticket sales. 

The chart shows some recent selling when price hit 5.00.


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## rnr (11 November 2018)

peter2 said:


> The chart shows some recent selling when price hit 5.00.








Well the price certainly didn't spend much time around $5 before moving very quickly to around the $8.20 mark. Following a pullback and a move to $8.25 price has retreated again.
How long to wait for another move higher?


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## rnr (29 November 2018)

Is a new ATH imminent after todays powerful move up?


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## greggles (7 December 2018)

rnr said:


> Is a new ATH imminent after todays powerful move up?




JIN subsequently pushed through and closed above resistance at $8.25 on Monday before falling back down and below that level on Wednesday and Thursday. Today the company released a bullish FY2019 Outlook Update which can be succinctly summarised by the table below:






The numbers are quite impressive and demonstrate solid revenue growth. I think it's likely that JIN will advance towards $9 in the coming months based on today's updated forecasts.

Jumbo Interactive is up 5.87% to $8.12 so far today. It will be interesting to see if it can close above $8.25 and stay there.


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## willy1111 (11 December 2018)

I have selected JIN as my top stock for the 2019 tipping competition.  It is in a strong upward trend - and if the economy backs off a bit with a drop in the market and home prices, perhaps more people will look towards playing lotto for the hope of winning.


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## Zaxon (15 February 2019)

The latest results.


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## leyy (18 March 2019)

JIN has cracked $13 for the first time.

A very silent achiever and well done to all holders.


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## Cam019 (24 March 2019)




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## leyy (2 April 2019)

Wow it gapped up today to close at $15 up 12.78%.

@ROE I hope you are still holding from 2016 from 80 cents.

I am a happy holder up over 100% since November 2018.


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## galumay (2 April 2019)

I too hope @ROE is still a holder, I know someone on twitter who is a 50 bagger on JIN. You dont need many of these if you have the temperament to hold through the volatility over the years!


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## Zaxon (2 April 2019)

leyy said:


> Wow it gapped up today to close at $15 up 12.78%.



It certainly did. Part of that could be attributed to the dip we had shortly before, and the recovery from that.  







leyy said:


> I am a happy holder up over 100% since November 2018.



Excellent!  I'm up 131% since I bought in.


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## rnr (29 April 2019)

Jumbo Interactive has gone from strength to strength over the last 2-3 months and now taking another breather. Are the last 3 bars forming a consolidation to push even higher?


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## Zaxon (30 April 2019)

rnr said:


> now taking another breather.



How dare it!  People, you need to gamble more.  I need to feed off your losses.


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## leyy (6 October 2019)

@Zaxon hope you are still holding JIN.

Fast forward another six months and now it's reached a new all time high circa $27.

JIN is now my single biggest holding.

Need to think about balancing my portfolio.


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## investtrader (6 October 2019)

"Great investment track records tend to be determined by a few great ideas. Murray Stahl analysed Peter Lynch's famous track record of earning 29.2% p.a. between 1977 and 1990, with a view to understanding how a portfolio containing 1,400 stocks could do so well. Surely a thousand plus stocks would be a proxy for market returns?

Instead, Stahl found that just two stocks, both of which emerged from bankruptcy, accounted for most of the performance. That's two stocks in 1,400."
Maybe you shouldn't rebalance?


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## So_Cynical (6 October 2019)

investtrader said:


> "Great investment track records tend to be determined by a few great ideas, Stahl found that just
> two stocks, both of which emerged from bankruptcy, accounted for most of the performance. That's two stocks in 1,400." Maybe you shouldn't rebalance?




I have been doing this for 12 years and hold many stocks, it's always 1 - 3 out performers that make all the difference and often these stocks have to be 
held through long periods of nothingness, CLV - Clover a great example, one just never really knows with stocks, it's a bit of a lottery at times.


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## Zaxon (6 October 2019)

leyy said:


> @Zaxon hope you are still holding JIN.



Oh yes, I still hold it.  Who says nothing grows forever?  lol.


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## Zaxon (6 October 2019)

investtrader said:


> Instead, Stahl found that just two stocks, both of which emerged from bankruptcy, accounted for most of the performance. That's two stocks in 1,400."
> Maybe you shouldn't rebalance?



That's the approach I take.  My "balancing" takes place at the time I purchase a security by not overallocating to it.  But once I own it, it can grow as much as it wants.  In fact, I insist that it does!


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## JTLP (20 December 2019)

Smacked down today on a trading update that didn’t meet expectations. 

I’ve liked this one but thought it was too frothy. Is now an entry point?


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## galumay (20 December 2019)

I dont think its a good business JLTP, would have to be awfully cheap to interest me. Shocking IRR, mainly because they keep issuing more shares - and then basically use the capital raised to pay dividends!


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## Dona Ferentes (20 December 2019)

_Jumbo Interactive has fallen 9 per cent to a six-month low of $16.88 after it told investors rising costs would hit its bottom line for H1 FY 2020. Its EBITDA margin is expected to fall 2.8 per cent to 60.1 per cent for H1 FY 2020 compared to 63.9 per cent in the prior corresponding half._

Great margins ! Haha. Sounds like GaaS (Gambling as a Solution) isn't "cost free". lots of interventions behind the scenes. Net profit growth around 13 per cent is tipped to come in lower than revenue growth around 24 per cent as acquisition and business development costs hit the bottom line.... Not a lay-down *misère*


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## JTLP (20 December 2019)

galumay said:


> I dont think its a good business JLTP, would have to be awfully cheap to interest me. Shocking IRR, mainly because they keep issuing more shares - and then basically use the capital raised to pay dividends!




I see. Thanks for the heads up. I knew ROE liked them (what happened to him$m) and was recommending them around a $1 from memory!


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## galumay (20 December 2019)

I miss ROE, he had some good insights! He got in very early, maybe 80c? He still pops up on Hot Crapper occasionally and he made a fleeting visit here for one post a month or so ago.


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## zaxacel1975 (30 January 2020)

Anyone have any thoughts on this stock? I cant see any resistance between here at about $7.90/$8.00 and that is still a fair way from the current price, and after already large falls.
Maybe the market already knows Tab wont renew their licence after 2022?


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## zaxacel1975 (12 February 2020)

I meant support above, not resistance. Looks like there was some support at about $12.95 from end of March last year. Didn’t look like enough to turn this down trend, but not sure.
Apparently TAB deal doesn’t end in 2022, just transitions to rolling 12 month extensions.


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## Dona Ferentes (30 June 2020)

and down

Five year screenshot





maybe this is why?  harder to make a margin on incrementals:







> JIN has announced a new 10-year reseller agreement with Tabcorp Holdings Ltd. Jumbo and Tabcorp have extended their reseller agreements for New South Wales, Victoria, South Australia, Northern Territory, ACT, and Tasmania (as well as international jurisdictions) until July 2032.
> 
> However, given the enlarged scale of Jumbo and the fundamental value of Tabcorp’s lottery licences to it, these *agreements will come at a cost*.





> Jumbo has agreed to pay an upfront extension fee of $15 million for the 10-year term and a service fee of 4.65% of the ticket subscription price. The latter will be introduced in phases, initially with a service fee of 1.5% in FY 2021. After which, its service fees will increase to 2.5% in FY 2022, 3.5% in FY 2023, and then 4.65% thereafter. Though, should the value of its ticket sales be in excess of $400 million for each applicable financial year, it will pay a pay a service fee of 4.65% on ticket sales beyond that amount.



*FY 2020 guidance*.







> Jumbo has reaffirmed its guidance for FY 2020 despite a lower than expected number of large jackpots. It expects to report ticket sales of $335 million to $341 million and revenue of $68.5 million to $69.9 million. In respect to earnings, it is forecasting earnings before interest, tax, depreciation, and amortisation (EBITDA) of $38.7 million to $40 million and net profit after tax in the range of $24.4 million to $25.3 million.




(_used to hold, but in the early days. Probably sold too early, but hey!_)


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## peter2 (22 September 2020)

Since the last post JIN went from $10 to $15.  

Today, the price has dropped 10% (to $13.00) after news that TAH has sold it's 11% holding (at $13.52).  I'm wondering if this is an opportunity to buy JIN at the lower price. TAH has the distribution rights, so didn't need to continue to own it's holding in JIN.  I'm not a fan of the TAH mgt team so I've discounted their involvement.  

Recently Powerball payed out a 60million jackpot. These big jackpots increase sales.  On the table for the board to consider.


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## peter2 (22 September 2020)

Apologies for the intra-day chart but today's price action after the news helps the board come to a decision. 

Today's price action reveals that other investors thought the same as I did as they bid the price up in the morning. However since then it's been all selling. There's no sign of a temporary bottom yet. There's still two hours before the close on what has been a overall down day (-0.5% so far).  I'll wait until closer to the EOD.


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## Miner (9 September 2021)

peter2 said:


> Apologies for the intra-day chart but today's price action after the news helps the board come to a decision.
> 
> Today's price action reveals that other investors thought the same as I did as they bid the price up in the morning. However since then it's been all selling. There's no sign of a temporary bottom yet. There's still two hours before the close on what has been a overall down day (-0.5% so far).  I'll wait until closer to the EOD.
> 
> View attachment 112106



@peter2  - looks like you have posted last almost one year back and since then there was no posting.
Over the year, JIN danced up and down to be here - still about $2 more than last year, one director  bought about $99 K worth at a price more  than almost $1 of current price


			https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02416107-2A1320441?access_token=83ff96335c2d45a094df02a206a39ff4
		

Financial result published in August was fantastic (!) which probably led the two directors to put their money into faith.
But But But ??


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## bsnews (10 September 2021)

JIN only has Oz Lotto not Powerball or any other games except the charity side of the equation that they are growing with Tatts in Australiia.
The new agreement signed with Tatts for the continuation of the Oz Lotto licence and charity now has JIN by the short and curly.
Overseas hard to say was looking ok.


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## Miner (10 September 2021)

bsnews said:


> JIN only has Oz Lotto not Powerball or any other games except the charity side of the equation that they are growing with Tatts in Australiia.
> The new agreement signed with Tatts for the continuation of the Oz Lotto licence and charity now has JIN by the short and curly.
> Overseas hard to say was looking ok.



Great share and synergy of collective knowledge. I was unaware of this saga.
Thanks a lot .
I am wondering why two directors invested significant $  after knowing their short and curly stance ?
Or they have remained blindfolded always ?


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## signalFollower (2 March 2022)

I like that the price has retraced back towards the Weekly Chart uptrend line, so I've taken a small holding just on that basis


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## Dona Ferentes (26 August 2022)

Total revenue advanced 25 per cent to $104.3 million
Total transaction value up 36 per cent to $659.9 million.
Underlying earnings up 13 per cent to 51.5¢ per share on a payout ratio of 85.6 per cent.
Lifted total FY 2022 dividends 16 per cent to 42.5¢ per share
Guidance for underlying operating cost growth excluding lottery retailing marketing costs between 20 per cent and 22 per cent.
Underlying EBITDA margin is anticipated to be in the range between 48 per cent and 50 per cent


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