Jupiters jackpots to record $77.1m
December 20, 2021
JUPITERS yesterday beat market expectations with a 14.4 per cent lift in full-year earnings to $77.1 million, but it is targeting expansion offshore to fuel growth as Australia’s saturated casino and gaming sector wallows.
The company’s new managing director, Rob Hines, said he wanted at least 50 per cent of profit to come from non-casino operations within a decade under the diversification plan, and at least half that from abroad.
But this could prove a modest target considering Jupiters’ Alice Springs-based sports betting operation, Centrebet, last year doubled revenue to $18.4 million and trebled profit – 87 per cent of which was generated offshore.
Mr Hines was elated with the result and forecast another year of double-digit earnings growth, but warned investors the record June 2001 result was $10 million ahead of “theoretical win” level projections.
So was the previous year’s profit of $67.4 million. This means the company could well suffer a $20 million or 26 per cent profit dive next year if the odds go against the house to a similar extent.
“The underlying business will deliver double-digit earnings growth without us doing anything particularly exciting, based on a theoretical win rate,” Mr Hines said.
“I think investors should look at the theoretical even though we have been lucky and we’re paying a higher dividend then we would have.”
Nevertheless, the market applauded Jupiters’ good fortune and increased final fully franked dividend to 10c a share, driving the stock price as high as $4.46 before it settled to close 4c stronger at $4.36 on volume of 206,000.
In the absence of any real growth opportunities within Australia, Mr Hines said the company would use Centrebet and and Jupiters’ gaming software and networks solution business to “aggressively pursue” opportunities in Scandinavia, Europe and South America.
“I don’t believe that there is much more room for expansion in gaming Togel in Australia,” Mr Hines said. “I think the market is fairly well saturated . . . so the gaming growth has got to come from offshore.”
AWA, which Mr Hines once headed and was taken over by Jupiters in January 2000, offered potential to leverage off 30 clients in 16 countries to drive profit growth from the gaming technology business.
Despite speculation about consolidation in the domestic casino market, Mr Hines said no proposals had crossed his desk which would enable Jupiters to “grow the pie” in Australia.
Jupiters’ founding shareholder structure and state legislation also precluded the prospect of a hostile takeover.
Mr Hines said the stunning result, struck on a 14 per cent lift in revenue to $771 million, was a tribute to his predecessor Richard Barnes who retired last month after 13 years at the helm.
Apart from the above average win rate, the result reflected inclusion of the Breakwater Island Trust’s revenue for the first time of $41.8 million, and AWA’s full-year contribution of $67.9 million.
Mr Hines said the food and beverage division had been particularly hard hit by the GST’s introduction, while high-roller commission business revenue had fallen almost 10 per cent due to a 30 per cent drop in “front money” in the face of “softening of world economies, especially Asia”.