While investors may not be jumping for joy following Jackpotjoy’s (LSE: JPJ) latest set of financials, I believe there is plenty to celebrate in the company’s market update. The share was last 2% lower in Tuesday trade.
The online bingo behemoth declared that gaming revenues grew 14% in the nine months to September, to £222m, with sales rising by the same percentage in the third quarter to £75.4m.
Meanwhile, adjusted EBITDA rose 11% during January-September, to £85.9m, although momentum here has slowed in recent months due to larger marketing spend. Earnings jumped 4% in quarter three, to £26.7m.
Commenting on the results, Jackpotjoy said: “The strong trading momentum seen over the first six months of the year continued into Q3 and into the early stages of Q4.” It added that management “remains confident in meeting the upper end of market expectations for 2017.”
Fancy a flutter?
Jackpotjoy is the country’s largest bingo operator and it continues to add players at a terrific rate. In the last quarter the number of active customers jumped 13% to 251,186, which helped real money gaming revenue per month increase 16% to £22.6m.
The London firm’s tentacles stretch far and wide (it commands a market share of around 25% in the UK and 24% in Spain), and it has a brilliant retention rate thanks to the strength of its product portfolio with a particular focus on creating a ‘community feel’ for its gamers. And these factors continue to send turnover to the stars.
Now, whil it is expected to print a 4% earnings reverse in 2017, it is predicted to snap back next year with an 11% bottom line improvement.
The gambling giant has seen its share price detonate in recent times, gaining 50% in value during the past six months. Despite this, however, it can still be picked up for a song, the firm changing hands on a bargain forward P/E ratio of 8.5 times.
Although Jackpotjoy does carry some regulatory risk, of course, I consider this too cheap to pass on right now given the firm’s exceptional long-term profits outlook.
Pins powerhouse
Hollywood Bowl (LSE: BOWL) is another leisure stock in great shape to deliver exceptional profits growth in the years ahead.
Its site refurbishment programme continues to impress, as does performance at its new sites, and as a consequence the ten-pin titan saw revenues shoot 8.9% higher in the year to September, or 3.5% on a like-for-like basis. And with the nation’s bowling appetite continuing to hot up, Hollywood Bowl has seen takings picking up the pace too more recently (the top line swelled 10% during April-September).
Hollywood Bowl is expected to have endured a 17% earnings decline in the last year on account of its large capex bill. But the business is predicted to get firing again from this year onwards, and a 12% earnings rise is estimated for fiscal 2018.
Despite its bubbly long-term earnings outlook, it still deals at a very tasty discount, a prospective P/E multiple of 14.8 times falls below the widely accepted value terrain of 15 times or below.