JUMBO INTERACTIVE LIMITED
Jumbo Interactive Limited
ABN 66 009 189 128
2 Annual Report 2022
Annual Report 2022 3
Welcome to the Jumbo
Interactive 2022 Annual Report
Jumbo would like to acknowledge the Turrbal and Yugara People, the traditional custodians of the land
on which our business operates. We pay our respects to elders past, present and emerging. We would
also like to extend our respect to any Aboriginal or Torres Strait Islander people engaging with this
report. Jumbo would also like to acknowledge the territories of the Blackfoot Confederacy, including
the Siksika, Piikani and Kainai Nations; the Stoney-Nakoda; and the Tsuut’ina Nation, land on which our
subsidiary business, Stride Management, operates.
About this report
The Jumbo Interactive Limited (Jumbo) FY22 Annual Report provides
key information about our financial, non-financial and sustainability
performance for the reporting period of 1 July 2021 to 30 June 2022.
Certain relevant events that have occurred after the end of this reporting
period but before publication of the Annual Report have also been
included. For a holistic view of Jumbo’s performance, this report should
be read in conjunction with the following reports available on our website:
Sustainability
Report 2022
FOR THE YEAR ENDED 30 JUNE 2022
Sustainability
Report
Investor
Presentation
Corporate Governance
Statement
About this report.
Contents
4
About Jumbo
Financial Highlights
6 Message from Chair
5
8
11
17
23
31
36
Message from CEO and Founder
Strategy
Lottery Management Excellence
Best in Class Lottery Software
Sustainability
Directors’ Report
45 Operating and Financial Review
55
76
133
137
Remuneration Report
Financial Report
Independent Auditor’s Report
Shareholder Information
140 Company Information
4 Annual Report 2022
Annual Report 2022 5
About Jumbo
Financial highlights
Jumbo is a digital lottery specialist. We provide our proprietary lottery software
platforms and lottery management expertise to the charity and government lottery
sectors in Australia and globally.
Our mission is to make lotteries easier and our vision is to become
the number one choice in digital lottery and services around
the world.
Jumbo was originally founded by Chief Executive Officer (CEO) Mike
Veverka in 1995 and has matured into a leading digital lottery retailer
and lottery software provider.
Our innovative and player-centric approach to digital lotteries and
online retailing make us the platform of choice for more than 3 million
active players and more than 10,000 good causes.
Our platform and superior player experience is scalable and
caters for causes ranging from local causes to large state
and provincial lotteries.
Jumbo is an ASX300 company operating in Australasia, the United
Kingdom (UK) and Canada, with three distinct operating segments
underpinned by our proprietary lottery software platform and over
25 years of proven lottery management expertise.
Lottery Retailing 1
Software-as-a-Service
Managed Services
Jumbo is a fully accredited
retailer of Australian digital
lottery tickets through Oz
Lotteries.
We licence our ‘Powered
by Jumbo’ digital lottery
platform as a SaaS solution
to government and charity
lottery operators in Australia
and globally.
We provide our digital lottery
platform as well as effective
lottery management services to
charities and worthwhile causes
that are looking to establish a
lottery program or enhance an
existing program.
TTV
$659.9M
35.5% YOY
REVENUE
$104.3M
25.1% YOY
FREE CASH FLOW2
$38.2M
33.3% YOY
ACTIVE PLAYERS1
3.1M 70.6% YOY
UNDERLYING EBITDA
$55.1M
12.6% YOY
UNDERLYING NPAT
$32.2M
13.6% YOY
CASH BALANCE
DIVIDEND DECLARED
$68.9M
(9.2%) YOY
42.5CPS
16.4% YOY
[1] Jumbo is an authorised reseller of lottery tickets via an agreement with The Lottery Corporation. In August 2020, Jumbo extended its long running re-seller agreement
with The Lottery Corporation for a further 10 years to August 2030. The agreement does not cover the states of Queensland (due to small business restrictions limiting
lottery agencies to businesses that employ less than 50 FTE) and Western Australia (where Jumbo has entered into a SaaS agreement to provide our proprietary lottery
software platform and services for up to 10 years). The trademarks are licensed to Jumbo under the agreement with The Lottery Corporation.
[1] Players that made a purchase over the 12 months to 30 June 2022
[2] Cash flow from operating activities less cash flows for investing activities, excluding cash used for acquisitions of, and investments into, businesses and strategic assets
6 Annual Report 2022
Annual Report 2022 7
Message from Chair
Dear shareholder
When I wrote to you last year, I had been in the role for just under a year and Jumbo had made great
progress in expanding the business beyond Lottery Retailing into our Software-as-a-Service and
Managed Services operating segments. At the time, we were still grappling with the uncertainty stemming
from COVID-19, including ongoing lockdowns and border closures, unprecedented government stimulus,
historically low interest rates and benign inflation.
Fast forward a year and the macroenvironment has shifted dramatically: inflation
has emerged as a key issue globally and central banks have responded by raising
interest rates; equity markets have fallen considerably and been subject to
significant volatility; and valuations, particularly for technology companies, have
been adversely affected. Against this backdrop, Jumbo continues to execute on its
strategy with another strong Lottery Retailing result and the acquisitions of Stride in
Canada and StarVale in the United Kingdom1 (UK).
Strategy
Following the reopening of international borders, it was pleasing to see our senior
leadership team come together in person in March this year for our annual Board
Strategic Retreat, at which we developed a comprehensive growth strategy and
outlined the priority markets for growth with a highly engaged and motivated
leadership team focused on execution. We completed the acquisitions of Stride in
June 2022 and anticipate regulatory approval for StarVale by the end of Q1FY23.
Stride provides us with a foothold in the Canadian market to expand further, while
StarVale adds to the acquisition of Gatherwell and helps build scale in the UK
charity lottery market. We also held our first investor day in June this year where we
provided a detailed update on our strategy and our shareholders heard first-hand
from the executive leadership team.
Performance
Jumbo has performed strongly in FY22 despite the uncertain macro environment,
delivering double-digit growth in ticket sales, revenue and earnings. As a result of
this strong performance, the Board has declared a final ordinary dividend of 20.5
cents per share, bringing the total dividend for FY22 to 42.5 cents per share, fully
franked. This reflects a dividend payout ratio of 85.1% of statutory Net Profit After
Tax (NPAT).
Capital management
The Board continuously reviews and assesses Jumbo’s capital-management
framework in the context of the organic capital generation of the business, future
capital requirements, balance-sheet strength and the desire to provide long term
value to shareholders.
Historically, Jumbo’s dividend policy has been to pay 85% of statutory NPAT
to shareholders as ordinary dividends. As previously announced, following the
completion of the StarVale acquisition, the Board has resolved to adjust the
targeted dividend payout ratio to a range of 65% to 85% of statutory NPAT. This
will enhance Jumbo’s flexibility to acquire and repay debt while maintaining a
satisfactory dividend to shareholders and takes effect from FY23.
[1] Pending regulatory approval, expected by the end of Q1FY23
Susan Forrester AM
Chair & Non-Executive Director
Board of Directors
“Jumbo has performed strongly in FY22
despite the uncertain macro environment,
delivering double-digit growth in ticket
sales, revenue and earnings.”
Lottery-sector developments
Jumbo is a global leader in digital draw-based lottery games which deliver
solid and consistent long-term growth and have proven highly resilient to
recessions. Over the course of the year, we observed heightened interest
in lotteries as an asset class. This was driven by the potential ASX listing of
Scientific Games’ lotteries business and subsequent trade sale to Brookfield,
and Tabcorp’s recent demerger of its lotteries business. As a pure-play digital
lottery specialist, we believe these developments drive a deeper understanding
of lotteries as an asset class – an outcome that is fundamentally positive for the
domestic lottery sector.
Corporate governance
The Board understand the importance of effective corporate governance
in Jumbo’s ongoing success. I joined the Board in September 2020 with
a mandate to support our international expansion by strengthening our
governance foundations and frameworks. Strong governance foundations,
conduct, and ethics are prerequisites for existing and prospective clients
and partners to do business with us. We will ensure all enhancements to our
governance framework meet the expectations of our key stakeholders and the
regulatory requirements in each new jurisdiction.
The Board has closely followed the recent enquiries into the casino sector and
discussed the findings, to understand what went wrong and why. While Jumbo
operates in a very different part of the market, we have considered how these
governance lessons apply to our company and ensuring we have the checks in
place to avoid similar behaviours and mistakes.
The Board conducts annual reviews of its own performance and reviews
its skill set regularly. The review findings are that we do work cohesively and
respectfully with management, while providing sufficient challenge and keeping
them firmly accountable for optimal performance.
Sustainability
As a Board, we believe it is our role to take a longer-term view than executives
on Environmental, Social and Governance (ESG) topics. In November last
year, we established a Sustainability Council composed of senior leaders from
across Jumbo. As part of its mandate, the Sustainability Council engaged with a
broad range of internal and external stakeholders and completed our first ESG
materiality assessment to identify the topics that matter most for our business.
The Sustainability Council is now responsible for the implementation of our
sustainability program of work and reports directly to the Board each month.
As part of this, we have identified our five sustainability priorities and set
specific targets and timeframes for each, including committing to being carbon
neutral in Australia by 30 June 2023 and becoming a signatory to HESTA’s
40:40 vision. Specific sustainability targets have also been included as part of
the FY23 short-term incentive plans.
As a fast-growing technology company, people are our most valuable asset.
COVID-19 has had a profound psychological impact on staff as they re-evaluate
their careers and prioritise other aspects of their life. This trend, combined
with a very competitive labour market, strong demand for digital expertise,
and above-average wage inflation, has led to elevated turnover across our
workforce. In response, we have reviewed our employee value proposition;
invested in our talent; and actively promoted diversity, equity and inclusion.
Earlier this year, the People and Culture Committee engaged an independent
remuneration consultant to ensure that our executive remuneration framework
attracts and retains talent, aligns with Jumbo’s strategy, fosters culture and
behaviours that support growth, and drives long-term value creation for our
stakeholders. Further detail on the new remuneration framework is reflected in
this year’s Remuneration Report.
We are very pleased to release our first Sustainability Report (FY22) and
provide additional disclosure on the key ESG topics impacting our business.
This report outlines our commitment to being a socially responsible and
sustainable business that delivers value for all our stakeholders. This is a
serious and ongoing commitment to Sustainability and we look forward to
providing updates on our progress.
Thank you
On behalf of the Board, I would like to sincerely thank all our clients, partners
and shareholders for their trust and ongoing support. I would also like to convey
my appreciation to the entire Jumbo team who have an unrelenting focus
on delivering an unrivalled player experience and have been instrumental in
delivering yet another strong result. The Board remains very excited about the
future of Jumbo and the growth potential of our best-in-class software to make
lotteries easier for clients and players all over the world.
Susan M Forrester
Chair of the Board
Susan Forrester AM
Chair of the Board, Independent
Non-Executive Director
BA, LLB (Hons), EMBA, FAICD
Mike Veverka
Chief Executive Officer and Founder,
Executive Director
BEng (Hons)
Sharon Christensen
Independent Non-Executive Director
LLB (Hons), LLM, GAICD
Giovanni Rizzo
Independent Non-Executive Director
BCom (Hons), CA
8 Annual Report 2022
Annual Report 2022 9
Message from CEO and Founder
Dear shareholder
At Jumbo we are on a mission to make lotteries easier – easier for our clients and easier
for our players – and remove the complexity involved in running a lottery. By staying true
to our mission, we will continue to drive growth and become the number one choice in
digital lottery and services globally.
In FY22, Jumbo delivered another record profit, fully operationalised our first
UK SaaS client, expanded our international footprint with the acquisitions of
Stride in Canada and StarVale1 in the UK, launched a new Managed Services
client in LifeFlight Australia, enhanced the senior leadership group to ensure
we have the capabilities to successfully execute on our growth strategy, and
established a Sustainability Council to develop and implement our sustainability
program of work.
Strategy
We have a clear growth strategy and FY22 has simply been about execution.
We are very pleased to have completed our acquisition of Stride in Canada
and anticipate regulatory approval for StarVale in the UK by the end of Q1FY23.
Together, these businesses will add approximately 1.6 million active players to
our platforms. Active players are a key metric for us: our North Star. The more
active players we have on our platform, the more we can grow. We use our
digital skills to continuously improve player experience, engaging players and
keeping them active – in turn, satisfying our lottery partners and minimising
our contract risks. We see a substantial opportunity for Jumbo to grow in our
priority markets of Australia, the UK and Canada.
Lottery Retailing
In Australia, the Lottery Retailing segment delivered another strong result,
supported by an improved jackpot cycle. The FY22 result benefitted from
a record $120 million Powerball in February – the first jackpot greater than
$100 million since September 2019. This strong result was underpinned by
a significant increase in new and active players arising from increased digital
penetration and successful player engagement and retention initiatives.
Over the last two decades, lotteries – particularly draw-based games – are an
asset class that has proven highly resilient to recessions and delivered solid
and consistent growth. In fact, as a proportion of overall household spend,
lotteries have remained relatively stable over the long term.
SaaS
Our SaaS segment is growing strongly with all our clients fully operational
on the Powered by Jumbo (PBJ) platform. Our relationship with Lotterywest
in Western Australia continues to go from strength to strength with jointly
funded marketing having commenced in May. We continue to work closely
with Lotterywest to enhance the digital offering in that state. In the UK, we
operationalised our first UK client: St Helena Hospice. Jumbo is now well
positioned to benefit from several other hospice-sector lotteries looking to
replatform over the next few years.
We continue to closely monitor iLottery developments in the United States
(US); however, this remains an under-developed segment of the market with
the pace of iLottery adoption slower than anticipated. Currently, only 14 states
have iLottery operational or have passed legislation for iLottery. Our preferred
entry into this market remains via a strategic partnership.
Managed Services
Gatherwell in the UK delivered another strong FY22 result through its
laser-like focus on the micro-lottery sector and good causes. There remains
a substantial growth runway for Gatherwell to increase its market share of
schools and Local Government Authorities and expand into adjacent sectors
and new geographical markets. In Australia, we have signed a new client
agreement with LifeFlight Australia and are proud to be associated with this
worthwhile charity.
A blueprint for acquisitions
With the acquisitions of Stride complete and StarVale not far away, our
immediate focus is ensuring we integrate these businesses as effectively and
efficiently as possible. A number of our senior management team have already
visited Stride and StarVale, and vice versa, to ensure we are aligned on the
integration goals, principles and approach. Aside from both businesses being
a strong cultural fit with Jumbo, they have performed impressively throughout
FY22 and have strong track records of performance. We welcome everyone
from Stride and StarVale into the Jumbo family and are very excited about the
opportunities ahead .
Leadership
From 1 July 2022, Richard Bateson transitioned from the role of Chief
Commercial Officer to the role of International Lottery Advisor, reporting
directly to me. With a strong Senior Leadership Group now in place, I will devote
more time to international opportunities and work closely with Richard to
explore all prospects. While success in international markets is one of Jumbo’s
top priorities, I want to make sure all deals are structured in a manner that
drives long-term profitability for all partners. Following a hiatus due to COVID,
the World Lottery Summit will return in October 2022 and the Jumbo team will
attend to enthusiastically pitch our services to the global lottery industry. I’m
also pleased to announce the appointment of Abby Perry to the role of Chief
People Officer. People and culture sits at the heart of our mission and strategy,
and Abby will continue to drive the key elements of our people strategy and
operations.
[1] Pending regulatory approval, expected by the end of Q1FY23
[2] Return to cause funds raised by our charity partners, excluding state based lottery taxes from Lotterywest and The Lottery Corporation
“We have a clear growth strategy and FY22
has simply been about execution.”
Sustainability
While lotteries are technically classified as a gaming product, they carry far less
risk of harm than other forms of gaming such as sports betting, slot machines
and online casinos. The risk is even lower for charity lotteries where players are
motivated by supporting good causes and the frequency of draws and pay outs
are lower than for commercial lotteries. In FY22, Jumbo helped our partners
raise approximately $200 million for community benefit2.
As a software business, our people and culture are critical to our success. Over
several years, we have been able to nurture a very strong, sought-after culture
that has served us well in the current labour market. In FY22, approximately
40% of vacant roles were filled by internal promotions; Jumbo was certified
as a Great Place to Work with more than 90% consensus among employees;
we launched our Diversity, Equity and Inclusion policy; achieved 39% female
representation across the Group; and our Flexible Work Policy resulted in
approximately 65% of staff working remotely.
Back in 2018, I had the honour to launch the “Women in Lottery Leadership”
programme with Rebecca Paul (President of the World Lottery Association).
This program is designed to drive high performance growth by supporting the
advancement of women in top positions on lottery management, leadership
and responsibility. As our Chair has mentioned in her message to shareholders,
this year we established a Sustainability Council to prioritise our sustainability
agenda and program of work. Our progress to date is captured in our first ever
Sustainability Report available on our website.
Thank you
I would like to thank all our employees for their continued hard work and
dedication to Jumbo. Our clients also deserve enormous credit for their vision
and trust in Jumbo to power their digital future. Finally, I wish to also thank
the Board for their guidance and support in helping Jumbo prepare for the
significant opportunities ahead.
Mike Veverka
Chief Executive Officer
and Founder
CEO Mike Veverka on the phone with one lucky Jumbo
Powerball player who won $80 million in August 2021.
Mike Veverka
Chief Executive Officer &
Executive Director
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11
Senior Leadership Group
Strategy
Executive key management personnel
Mike Veverka
Chief Executive Officer
and Founder
Brad Board
Chief Operating Officer,
joined May 2001
Xavier Bergade
Chief Technology Officer,
joined January 2000
David Todd
Chief Financial Officer,
joined October 2007
Abby Perry
Chief People Officer,
joined September 2016
Group leads
Angie Cheung
Head of Finance
Michael Driver
Head of Sales &
Marketing
Patrick Gordon
Head of Growth
Rick Hansen
Head of IT
Infrastructure
Colin Hilli
Head of Product
Lauren Hook
Head of Risk,
Compliance & Internal
Audit
Jatin Khosla
Head of Investor
Relations
Chris Perry
Head of Engineering
Tiffany Rose
Head of Legal
Business leads
Nigel Atkinson
Commercial Director -
UK & Europe
Dean Faithfull
President - Stride
Phil Wright
General Manager
Gatherwell
Levi Putna
General Manager Oz
Lotteries
12 Annual Report 2022
Our strategy
Annual Report 2022
13
To deliver our strategy and move further towards our vision,
we have adopted three key phases (strategic pillars):
•
•
•
Maximise: We need to maximise the significant value we’ve already
created in our Australian Lottery Retailing segment.
Replicate: In the short to medium term, we intend to replicate the
product and services model proven in Australia into new jurisdictions
around the world, leveraging our best in class lottery software and lottery
management expertise.
Diversify: In the medium to long term, we seek to diversify into new
markets and adjacent products, creating new revenue streams.
Our operating model comprises three distinct operating segments with clear
value propositions in their targeted markets. Jumbo’s aspiration is to grow
our relatively nascent SaaS and Managed Services segments to rival that of
Lottery Retailing over time.
Successful execution of our strategy will deliver value for our key stakeholders.
A clear strategy and operating model to deliver sustained growth
Making Lotteries Easier by being
The number one choice in digital lottery and services
Maximise
Our product and services attain more
market share and create shareholder
value
Replicate
Our product and services model in the
markets we enter to ensure we maximise
scalability and profitability
Diversify
Into new products and services
allowing us to improve and seize market
opportunities
Our Mission
and Vision
Strategic pillars
Three distinct operating segments servicing the full lottery
management value chain
Lottery Retailing
Selling lottery tickets through the internet
and mobile devices
Software-as-a-Service
Licensing our ‘Powered by Jumbo’ SaaS
lottery platform to government and large
charity lottery operators
Managed Services
Providing our lottery platform as well as
effective lottery management services to
charities and worthwhile causes that are
looking to establish a lottery program or
enhance an existing program
Three operating
segments
Lottery management excellence
Best in class lottery software
Exceptional player experience | Continual innovation | Scalable
Standardised and simplified platform driving scale | High
standards of performance and reliability | Complemented by
modern technology and integrations
Core capabilities
Shareholders
• Top quartile TSR1
• Targeted dividend payout
ratio of 65% -85% of
statutory NPAT
Players
• Best player experience and
advocacy
• Maximised community
benefit from funds raised
People
• Top quartile employee
engagement
• A Great Place to Work
Community
• A socially responsible and
sustainable business, with
positive social impact
Outcomes
[1] vs S&P ASX/ASX300 Accumulated
At Jumbo, we exist to make
lotteries easier and our vision
is to be the number one choice
in digital lottery and services.
14 Annual Report 2022
Active players
Our priority markets
for growth
Annual Report 2022
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15
15
Growth in active players is a key focus of our strategy. An active player is someone who
has purchased a lottery ticket in the last 12-month period. The more active players we
have on our platform, the more tickets we sell, the more we can grow revenue.
We have demonstrated strong active player growth in our Lottery
Retailing segment over the years, with active players more than
doubling from FY15 to FY19. More recently, we added new active
players in Australia via our SaaS segment and in the UK through the
acquisition of Gatherwell in 2019.
This year, the acquisition of Stride in Canada added a further ~750k
active players. When complete, StarVale will add a further ~850k
active players.
We see a substantial opportunity for Jumbo to grow in our priority
markets of Australia, the UK and Canada. The serviceable available
market for our products and services is large and significantly
underpenetrated, and as we develop new software capabilities and
skills, we can expand this further by offering new solutions to meet
the untapped needs of clients.
Our best-in-class lottery platform and lottery-management
expertise drives better acquisition, engagement and retention of
players. We use our digital skills to continuously improve the player
experience, engaging players and keeping them active – in turn
satisfying our lottery partners and minimising our contract risks.
Given Australia generates the vast majority of our revenue,
it remains our top priority market. Driving strong growth in
Oz Lotteries and creating value for Lotterywest are where
we continue to focus our domestic effort.
Jumbo’s other high priority is to integrate Gatherwell, Stride and
StarVale into the business, creating a firm foundation from which
to expand in the UK and Canadian charity markets.
We continue to closely monitor the government lottery sector
in the US, UK and Canada. The US iLottery market remains an
under-developed segment of the broader lottery market with
only 14 states either having adopted iLottery or passed legislation
to permit iLottery. We expect more States to adopt iLottery
over the coming 12 to 18 months. As iLottery adoption reaches a
critical mass, and we see evidence of increased standardisation
and heightened expectations of a ‘digital first’ approach, we
believe the timing will be right for a more aggressive approach
into this market.
Our preferred entry into this market is via a
strategic partnership with an established vendor.
Our value proposition to state lottery directors and potential
partners remains compelling:
•
Speed and agility;
• A lower economically viable entry point and higher Return on
Investment (ROI);
• Unique experience and proven capability in the iRetailer
model; and
• Proven growth marketing and player experience capability
While the US iLottery market represents a large and compelling
growth opportunity for Jumbo, we will be disciplined around
the economics of any potential deals to ensure the long-term
profitability for all key stakeholders.
Active players who made a purchase in the 12-month period (FY15 – FY22)
2.3x • Includes contribution from
Lottery Retailing only
Includes contribution from
SaaS and Managed Services
333k
376k
354k
438k
762k
1.0m
1.8m
3.1m
4.0m
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY22
Pro forma
Acquisition of
StarVale1
Stride
Lottery Retailing & SaaS
Australia
Managed Services
United Kingdom
Canada
Acquisition of StarVale
(United Kingdom)
Vertical
Government
Charity
Proposition
Managed Services
SaaS
1
1
1
1
2
1
1
1
2
1
1
2
2
2
2
2
[1] Acquisition announced 27 January 2022 and pending regulatory approval, expected by the end of Q1FY23
Priority 1
Priority 2
Jumbo • Investor Forum 2022 • 15
16 Annual Report 2022
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17
Lottery
Management Excellence
Jumbo’s Total Addressable Market (TAM) is large and reflects
the entire potential of the government lottery and charitable
giving market in Australia, the UK, Canada and the US. The
Serviceable Available Market (SAM) reflects the portion of the
market we can serve based on our existing business model,
technological capabilities and product set. We see a significant
opportunity to grow in the charitable sector within Australia, the
UK and Canada and the government lottery sector in Australia
and the US. Over time, as we develop new software capabilities
and skills, we will have the ability to expand the serviceable
available market by addressing the unmet need of clients and
pursuing adjacent sectors.
Serviceable Available Market (SAM)2
AU 1%
CAN 20%
AU 22%
Total Addressable Market (TAM)1
$685bn
US 20%
UK 2%
CAN 2%
AU 2%
UK 5%
CAN 2%
US 66%
$10.3bn
US 8%
UK 35%
AU 15%
$10.3bn
Lottery Retailing 20%
SaaS 30%
Managed Services 50%
Government
Charity
[1] Reflects total government lottery market in Australia and the US plus total individual charitable giving in Australia, UK and Canada.
[2] Reflects the current portion of the market that can be acquired based on our existing business model, including existing product set and capabilities based on management estimates.
Source: Australian Gambling Statistics, Tabcorp financial reports, Lotterywest Annual Report, ACNC (Australian Charities Report – 7th Edition), Charity Commission For England and Wales,
The Giving Report 2022 (Canada), La Fleur’s 2021, The National Philanthropic Trust (which curates statistics from recent studies and reports on charitable giving in the U.S), North American Gaming Almanac 2020-21
All figures shown in Australian dollars (A$1.00 = US$0.71; £0.56 and C$0.91)
18 Annual Report 2022
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19
At the heart of lottery management excellence is creating an exceptional player
experience and engagement on our platform. Jumbo’s advantage in lottery management
excellence comes from our dual role as both developer and client of our own software.
Our experience using our own software platform in our Lottery Retailing segment enables
us to solve problems for ourselves, as well as our clients.
Player experience and engagement
Play Page
At Jumbo, we have a player-centric approach; ensuring a safe and fun
environment for all our players is our priority.
We focus on player needs through the use of qualitative and quantitative data to
inform decisions on our platform to help drive innovation and business growth.
We use surveys, customer interviews, and usability testing to source relevant
data that provides both coverage and clear insights. Jumbo’s success depends
on meeting player’s needs and providing them with an engaging experience.
Player feedback banners are present on all PBJ sites. This data is used to
monitor and measure the sentiment of our customers and help us determine
the most desired improvements to the platform.
Oz Lotteries have been developing our messaging to ensure we are engaging
with our players in a way that benefits them most. Through our data and insights
we are ensuring that our players are receiving the right message, at the right time,
for the content they’re actually interested in.
Innovation
Jumbo has a philosophy of customer-driven continuous innovation and
uses customer insights and data to ensure the best experience for customers
and players.
Multiple improvements were made to the play page and number picker in 2022
making it easier for players to pick and play their favourite numbers. Now,
they can quickly ensure their favourite numbers are included when they’re
making a checkout.
This change was implemented following interviews with customers to
understand where they struggled with the purchase flow. Jumbo tested
all improvements with customers to ensure each decision improved their
experience.
Lotto Party
Lotto Party was launched in 2018 following consultation with customers about
the pain of organising syndicates with family, friends, and co-workers.
Oz Lotteries is continuing to refine this feature and uses customer input to
maximise their experience and remove roadblocks to its use. This incremental
approach to innovation has improved Lotto Party’s engagement and retention.
Personalised Recommendations
By using player behaviour and transactional data we can recommend products
that are relevant to players at an individual level on the PBJ platform. This increased
relevancy ensures that we message players when we think there is something
that will delight them. The quantitative data collected suggests that this has
improved a players’ journey and streamlined their purchase flow.
Key player metrics
PLAYER
SATISFACTION
90%
(average for year ended 30 June 2022)
103,607
SUPPORT TEAM INTERACTIONS
(for the year ended 30 June 2022)
9,510
WEBCHATS
>90% of interactions were positive
87.3%
OF ENQUIRIES
RESOLVED AT
FIRST CALL
APPLE STORE
4.8/5
70,200 ratings
GOOGLE STORE
4.7/5
14,500 ratings
28
SECONDS
average call
wait time
20 Annual Report 2022
Annual Report 2022 21
At Jumbo, we have a laser-like focus on the player experience.
Our agile and experiment-based approach to innovation allows
us to identify, test, and measure new methods and learn quickly.
We offer a
best-in-class user
experience
We invest time and energy in
researching player needs
We relentlessly focus on improving
the player experience
We significantly invest in
personalisation
We have more
ways to win
National commercial
lottery games
13 charity-based lottery
games supporting
great causes
Innovative
ways to play
Unique features such
as Lotto Party
First digital retailer to
offer Autoplay
in Australia
Convenience
Taking the pain out of the
lottery experience
0-touch subscription
mechanism
Personalised number pages
Player support
> 90% customer satisfaction
87% of calls within 60 seconds
Access to a real person
Real-time monitoring of ticket
sales for problem gambling
Significant investment in data analytics tools, Artificial Intelligence (AI) and machine
learning enables Jumbo to deliver a more personalised, engaging and entertaining player
experience that drives player retention, loyalty and advocacy. By seamlessly integrating
with our platform, we can analyse the behavioural and transactional data of players
through best-in-class third party apps to acquire, engage and retain players.
Our platform is complemented by modern
technology and integrations.
Hundreds of
Integrations
Customer data pipeline allow
hundreds of possible intergrations
– top-of-class marketing, analytics,
CRM platforms etc
Personalised product
recommendations
Machine learning to provide
real-time, personalised recommendations
Minimises friction and
maximises up-sell
Experimentation
Complex experiments (backed by
data) with our player experience to
challenge bias/assumptions
Behavioral
Analytics
Capture data on critical player journeys
Create personalised onboarding
journeys
Player-centric
Innovations
Ability to iterate on new features
faster and smarter than before
22 Annual Report 2022
Annual Report 2022 23
This is underpinned by our unique
culture and an unrelenting focus on
the player experience.
Best in class
lottery software
Data led; player focused
Invest in best-in-class tools and
staff training
We log everything and have the tools
to monitor trends and extract insights
Common data architecture and
discipline around data quality
and integrity
Opinionated
but agnostic
Discovery - we understand
as much as possible before
making large commitments
Innovative Thinking - we build in
scope for failure and quick learnings
Test Everything - research is
great, but real-world execution
is what counts
Sustainable
growth loops
Focus on scalability with a
dedicated growth team
Disciplined focus on Return on
Advertising Spend (ROAS)
Use of AI and programmatic
marketing
Scalable
Steady, incremental growth
and value creation
Significantly higher increase in
TTV vs headcount
Efficiencies generated from
software and increased
use of automation
Insight driven
development and iteration
Dedicated teams to figure out the
right problems to solve
Invest significant time and effort
in collecting insights
Lotto Party is a great example
of this process
Remote work
Asynchronous work practices
(18 cities, 3 continents,
6 time zones)
Strong employee engagement
as well as access to a greater
talent pool
Cloud tooling
With a track record of success in Australia,
Jumbo is uniquely positioned to deploy over two
decades of lottery-management expertise and our
scalable digital lottery platform across our SaaS
and Managed Services segments globally.
24 Annual Report 2022
Annual Report 2022 25
Platform evolution
Over the last 17 years we have invested significantly in building
a world-class platform and engineering team which gives us a
strong competitive advantage in the lottery industry.
We estimate that over the last 10 years, we’ve spent
approximately $50 million on the development of our platform.
2005-2008
3-5 developers
• Platform based on legacy systems
• Monolithic in nature but well-suited
for a small organisation
• All testing undertaken manually
2013-2015
30 developers
2017 - 2019
45 developers
• Commenced rebuild of platform, starting
with modifications to support other languages
for Jumbo Lotteries
2011
10-15 developers
• Modified platform to run
online sales for SA
• Shift to agile, embraced test-driven development,
automated continuous integration and deployment
• Performance issues in Australia
• Experimenting with different technologies e.g.
database sharding, splitting monolithic code, rewriting
parts in Go
• Rebuild of platform and underlying tech stack
complete using modern architecture and code base
• Commenced adaptation of platform for Software-as-
a-Service (SaaS) and Managed Services solutions
2022
• Significantly compressed
software deployment times
• >90% of engineering effort
related to product roadmap,
research and development
2008
10 developers
• Modified platform to run online sales
for NSW Lotteries
2012 - 2013
• Started experimenting with multiple
databases, driven by the relatively
large (>1TB) dataset
2020
• Significantly improved
client onboarding
process and compressed
timeframes
2021
65 developers
• Adapted platform for UK
market in November 2021
26 Annual Report 2022
Annual Report 2022 27
Powered by Jumbo
Our proprietary lottery software ‘Powered by Jumbo’ (PBJ) offers a complete
enterprise digital lottery solution integrating all aspects of the lottery value chain. This
enables our clients to maximise the potential of their lottery and in turn generate strong
and sustainable growth in ticket sales and increase funds raised for good causes.
Lottery
Lottery
Management
Management
Gaming
Gaming
System
System
Jumbo Lottery Platform
Third-Party Integrations
Ticket receipt
Ticket receipt
and results
and results
Your
Your
Customers
Customers
Ticket receipt
Ticket receipt
and results
and results
Integrations
Integrations
Draw and
Draw and
Sales data
Sales data
Sales
Sales
Channels
Channels
Customer
Customer
data
data
Customer
Customer
Management
Management
Secure payment
Secure payment
options
options
Payment
Payment
Gateways
Gateways
Customer
Customer
Support
Support
28 Annual Report 2022
Annual Report 2022 29
Lottery management
Powered by Jumbo — Powerful, Scalable, Flexible
and Complete lottery management platform
PBJ offers draw creation and automation, real-time ticket management,
end-of-draw scoring, game types and compliant draw reporting.
Sales channels
A secure platform built for performance
Through our software, we offer a superior player experience across all digital
interfaces, leveraging AI and machine learning and leading website design,
responsiveness and point of sale facilities.
Payment gateways
PBJ seamlessly integrates with multiple payment gateways while ensuring
compliance with regulatory requirements such as Payment Card Industry Data
Security Standard (PCI-DSS).
Player management
PBJ offers account management, purchase history and subscription
management, player preferences and limits, funds and e-wallet management,
prize payments and ability to seamlessly migrate player databases using
Application Programming Interfaces (APIs).
Integrations
Integrated into our software are marketing automation tools, dynamic
segmentation, and business intelligence and reporting tools which, using APIs,
enable real-time data analysis to personalise the player experience.
Our development process complies with the Information Security
Management System under ISO 27001:2013. This international standard
provides our clients and players with a high degree of confidence that their
data is managed in accordance with best practice for information privacy,
cyber security and software development.
Approximately 50% of Jumbo’s Australian employees are dedicated to the
development and maintenance of our platform. Our engineering effort is split
between supporting the platform, tools and training (10%), and improving the
player experience through features (90%). Our Microservice architecture
supports multiple development teams working across the platform at any
given time. As a result, we regularly deliver a large number of small incremental
releases to all SaaS clients on a daily basis. Daily performance monitoring and
analysis helps to optimise system capacity.
To support innovation, we established JumboLabs where developers and
product owners work collaboratively on continual and rapid new business
discovery and concept validation. Our approach to platform enhancement
is underpinned by our agile development processes and metrics that deliver
continuous feedback to the teams.
The PBJ platform is highly scalable to meet the tidal demands of lottery jackpot
cycles. It is versatile and can be used as ‘software only’ (SaaS) or ‘software
+ services’ (Managed Services) solution. Additionally, thanks to the use of
API’s, Jumbo’s platform can interoperate with all core gaming systems across
the lottery ecosystem. The platform architecture allows for easy expansion
of system capacity to meet the demands of a growing player base as well as
flexibility to host in cloud or on premises. It also drives significant efficiencies
through the automation of manual and time-consuming activities, enabling
organisations to optimise their operating cost base and redirect resources to
value-adding activities.
Digital-native solution; enabling
accelerated digital transformation
Proven to operate in the most
challenging circumstances; uptime,
speed, responsiveness, capacity,
performance under load
Integrated with a suite of best-in-
breed marketing, data & analytics
and customer engagement tools,
enabling greater insights around
player behaviour and the ability to
develop bespoke marketing plans to
drive player growth
Interoperable with core
gaming systems and as part of
a broader gaming environment
/ lottery ecosystem
Proven track record of delivering
strong and sustainable growth
in ticket sales
Powered by Jumbo — Secure, Compliant and Efficient
Strong governance, unique and
proven lottery expertise in scaling
lottery programmes and Jumbo’s
collaborative and innovative
partnership approach
ISO 27001 certified with the
highest standard of security
and player protection
Automation of manual and time-
consuming activities, enabling
organisations to optimise operating
costs and re-direct resources
to value-adding activities
Funds raised through these
lotteries are all for a good cause
and community benefit
30 Annual Report 2022
Annual Report 2022 31
Key stats from $120m
Powerball (Feb-22)
Sustainability
684,612 tickets
sold
100% uptime over
the draw event (full
service availability)
>5 signups/second
during peak (55k
new signups within
24 hours)
>40% sales
compared to $150m
draw in 2019
>18.52
checkouts/second
during peak
>22.6 tickets
sold/second
during peak
>2800 support
interactions on
draw day; for 98.7%
satisfaction
Ticket sales during last day of Powerball $120m
(Feb-22)
24 Feb 1am 2am 3am 4am 5am 6am 7am 8am 9am 10am 11am 12pm 1pm 2pm 3pm 4pm 5pm 6pm 7pm 8pm 9pm 10pm 11pm
32 Annual Report 2022
Annual Report 2022 33
Modern sustainability
has three main pillars:
environmental, social,
and governance.
34 Annual Report 2022
Annual Report 2022 35
Our approach to sustainability
Sustainability priorities
Jumbo is committed to being a socially responsible and sustainable business
with effective governance that positively impacts our people, customers and
communities, while delivering long-term value for our shareholders.
The key priority areas for Jumbo including the sustainability targets
we are seeking to achieve over the medium term are as follows:
The Board and management have adopted the
following sustainability governance structure.
Jumbo Interactive Board
People and Culture
Committee
Audit and Risk
Management Committee
Executive Key Management Personnel
Sustainability Council
Senior Leadership Group
General oversight and
monitoring of ESG risks
and opportunities.
Expertise, support,
monitoring and ensuring
delivery of Sustainability
targets.
Development and
implementation of the
sustainability program
of work.
Our charity partners use Jumbo’s best-in-class lottery software
to raise vital funds to support a range of social services and
good causes. In FY21, we helped our charity partners raise
~$200 million 1.
The Board reviews and engages on ESG topics as part of their
responsibility for oversight and stewardship of the Company’s
strategy and culture. Operationally, the PCC and ARC monitor
ESG risks and opportunities associated with their respective
Charters. For example, the PCC brings a holistic focus to
aspects of people and culture including remuneration, diversity
and inclusion, employee experience, learning and development
and our culture. The ARC has oversight of key audit and risk-
related topics such as privacy, data security, cyber security,
regulatory compliance and risk management.
The Board ensures it remains well-informed on current
and emerging ESG topics through regular updates from
management, engagement with shareholders and the
investment community, and interactions with subject matter
experts invited to attend Board meetings and inform Directors
on topics relevant to Jumbo and the sector.
In November 2021, the Board endorsed the establishment of the
Sustainability Council, which is responsible for the development
and implementation of our sustainability program of work. The
Sustainability Council comprises senior leaders from across the
various functions of the business including Sales and Marketing,
People and Culture, Risk Management, Compliance and Internal
Audit, and Investor Relations.
For further information on our approach to Sustainability
including our progress in addressing environmental, social and
governance risks and opportunities, please refer to our 2022
Sustainability Report, available on our website.
Industry leading
player experience
>90% customer satisfaction1
by 30 June 2023
Responsible play
Deliver best practice
responsible gaming
experience for our
players and minimise
potential harm
by 30 June 2024
Great place to work
Rated in the top 25
best places to work
across all locations
by 30 June 2025
Employee engagement
Rated in the top
quartile for both
engagement scores
and participation
by 30 June 2025
Carbon neutral
Carbon neutral
emissions at Group
Climate Active
certification
by 30 June 2023
Maintain gender diversity
40% of employees at
Group level to be female
by 30 June 2023
Maintain gender diversity
40% of Board members
to be female
by 30 June 2023
Gender diversity
40% of Senior Leaders
to be female
by 30 June 2026
[1] Return to cause funds raised by our charity partners, excluding state based lottery taxes from Lotterywest and The Lottery Corporation
[1] Metric for Lottery Retailing only. Work is ongoing to develop an appropriate metric for our SaaS and Managed Services clients.
36 Annual Report 2022
Annual Report 2022 37
Directors’ Report
2. Directors’ meetings
The Directors of Jumbo Interactive Limited (Company), present their report on the consolidated entity (Group), consisting of Jumbo
Interactive Limited and the entities it controlled at the end of, and during, the financial year ended 30 June 2022.
The table below sets out the number of meetings of the Board of Directors (including Board committees) held during the year ended 30
June 2022 and the number of meetings attended by each Director.
Meetings Table
Board
Audit and Risk Management Committee
People and Culture Committee
Director
Eligible to attend
Attended
Eligible to attend
Attended
Eligible to attend
Attended
Susan Forrester
Mike Veverka
Sharon Christensen
Giovanni Rizzo
1 Attends as an invitee
26
26
26
26
26
26
26
26
5
51
5
5
5
51
5
5
5
51
5
5
5
51
5
5
3. Directors’ interests as at the date of this report
The relevant interests of each current Director in the ordinary shares of the Company as at the date of this report is as follows:
Director
Susan Forrester1
Mike Veverka1
Sharon Christensen1
Giovanni Rizzo
Number of ordinary shares
30,000
8,856,901
3,550
2,000
1 In addition Susan Forrester holds 4,098 rights, Mike Veverka holds 80,013 rights and Sharon Christensen holds 4,098 rights, over unissued ordinary shares
1. Board of Directors
The following persons served as Directors of the Company at any time during and up to the end of the financial year ended
30 June 2022:
SUSAN FORRESTER AM: Chair of the Board, Independent Non-Executive Director
BA, LLB (Hons), EMBA, FAICD
Appointed Chair of the Board of Directors in September 2020, Susan is also a member of the People and
Culture Committee and the Audit and Risk Management Committee. She is a highly respected company
director with an executive career spanning over 25 years in large professional services firms, covering law,
finance, human resources and corporate governance. Bringing a wealth of experience having served as
chair and non-executive director on multiple ASX listed companies for over a decade, Susan has a particular
focus on strategy and governance within industries that are undergoing rapid change, often as a result of
technology. Her other directorships and commitments include director and chair of the Audit and Risk
Committee of Plenti Group Limited (ASX:PLT) (since October 2020) and director of Data#3 Limited (ASX:
DTL) (since February 2022). Her previous listed directorships include National Veterinary Care Ltd
(ASX:NVL) (2015 – 2020), Xenith IP Limited (ASX:XIP) (2015 – 2019), G8 Education Limited (ASX:GEM)
(November 2011- May 2021) and Viva Leisure Limited (ASX:VVA) (August 2018 - January 2021). In addition,
Susan serves on the Diligent Institute Advisory Board in New York as a corporate governance specialist,
representing Asia Pacific and is a Qld Councillor with the AICD. In 2019, she became a Member (AM) in the
General Division of the Order of Australia for significant service to business through governance and
strategic roles as an advocate for women.
MIKE VEVERKA: Chief Executive Officer and Founder, Executive Director
BEng (Hons)
Mike has been Chief Executive Officer and Executive Director of Jumbo Interactive Limited since the
restructuring of the Company on 8 September 1999. Mike was instrumental in the development of the e-
commerce software that is the foundation of the various Jumbo operations. Mike was the original founder of
subsidiary Benon Technologies Pty Ltd in 1995 when development of the software began.
Mike also established a leading Internet Service Provider in Queensland which operated successfully for
three years before being sold. Mike is regarded as a pioneer in the Australian internet industry with many
successful internet endeavours to his name.
SHARON CHRISTENSEN: Non-Executive Director
LLB (Hons), LLM, GAICD
Sharon was appointed to the Board of Directors in September 2019. She is also the Chair of the People and
Culture Committee and a member of the Audit and Risk Management Committee. Sharon has over 30 years
of commercial, legal and regulatory experience and is a research leader in regulatory responses to digital
innovation and disruption. Sharon is currently a professor at the Queensland University of Technology and
consults exclusively for Gadens Lawyers. She is widely regarded as one of Australia’s leading commercial
and property law academics.
Giovanni Rizzo: Non-Executive Director
BCom (Hons), CA
Giovanni was appointed to the Board of Directors in January 2019. He is also the Chair of the Audit and Risk
Management Committee and a member of the People and Culture Committee. Giovanni is a specialist in the
gaming industry with over 20 years’ experience in various management roles of large listed lottery, casino
and electronic gaming machine businesses in South Africa, Canada and Australia. Giovanni was Head of
Investor Relations at Tatts Group Limited prior to the merger with Tabcorp Holdings Limited in 2017. He is
currently the Chief Investor Relations Officer at Tyro Payments Limited.
38 Annual Report 2022
Annual Report 2022 39
4. Share options and rights
5. Company Secretary
There are no unissued ordinary shares of the Company under options at the date of this report.
Unissued ordinary shares of the Company under rights at the date of this report are as follows:
Date rights granted
29 October 2020
17 December 2020
15 March 2021
28 October 2021
28 October 2021
28 April 2022
28 April 2022
28 April 2022
Expiry date
Exercise price of rights
Number under right
1 July 2024
4 November 2023
4 November 2023
4 November 2023
1 July 2025
1 July 2025
1 July 2026
1 July 2027
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
92,965
24,591
15,583
16,393
64,403
2,732
2,732
2,732
Mr Graeme Blackett was appointed Company Secretary on 1 January 2021. Graeme holds a Bachelor of Arts, a Bachelor of Laws, a
Graduate Diploma in Company Secretarial Practice, is admitted as a Solicitor in NSW and is a Fellow of the Governance Institute of
Australia and of the Chartered Governance Institute. He has been a Senior Company Secretary with Company Matters Pty Limited for
over four years and has been a Chartered Secretary for over 25 years, including holding company secretarial and governance roles with
the (former) NRMA Group, Reckon Limited, the (former) Westfield Group, AMP Limited, ASIC and the National Australia Bank.
6. Remuneration Report
The Remuneration Report is set out on pages 55 to 74, and forms part of the Directors’ Report for the financial year ended
30 June 2022.
7. Principal Activities
The holders of these rights do not have any rights under the rights to participate in any share issue of the Company or of any other entity.
During the financial year, the principal activities of the Group consisted of:
During or since the financial year ended 30 June 2022, the following ordinary shares of Jumbo Interactive Limited were issued on the
exercise of options granted:
Date options granted
21 October 2017
Issue price of shares
Number of shares issued
$3.50
600,000
During or since the financial year ended 30 June 2022, the following ordinary shares of Jumbo Interactive Limited were issued on the
exercise of rights granted:
Date rights granted
29 October 2020
28 October 2021
Issue price of shares
Number of shares issued
-
-
23,241
16,925
40,166
During or since the financial year ended 30 June 2022, the following rights were granted by Jumbo Interactive Limited to Directors
and Executive Key Management Personnel (KMP), including the five most highly remunerated officers of the Group as part of
their remuneration.
Name
Number of rights granted
Number of unissued ordinary
shares under right
Directors
Susan Forrester
Sharon Christensen
Mike Veverka
Other key management personnel
Xavier Bergade
Brad Board
David Todd
Richard Bateson
4,098
4,098
23,419
10,246
10,246
10,246
10,246
72,599
4,098
4,098
23,419
10,246
10,246
10,246
10,246
72,599
The People and Culture Committee has awarded 11,134 FY22 STI rights to Mike Veverka subject to shareholder approval at the 2022
AGM and 19,484 FY22 STI rights to KMP subject to Director approval at a Board meeting on the 2022 AGM date.
•
•
Lottery Retailing (Business-to-Consumer) (B2C);
Software-as-a-Service (Business-to-Business) (B2B)/(Business-to-Government) (B2G); and
• Managed Services (B2B).
The following summary describes the operations in each of the Group’s reportable segments:
Lottery Retailing
Sales of Australian national lottery and charity lottery tickets through the internet and mobile devices to customers (B2C) in Australia
and eligible overseas jurisdictions.
Software-as-a-Service
Development, supply, and maintenance of proprietary software-as-a-service (SaaS) for authorised Businesses, Charities and
Governments (B2B/B2G) mainly in the lottery market in Australia and internationally.
Managed Services
Provision of lottery management services for authorised Businesses and Charities (B2B) in the lottery market on a domestic and
international basis. Services include prize procurement, lottery game design, campaign marketing, and customer relationship and
draw management.
8. Review of Operations
A review of the Group’s operations for the financial year and the results of those operations, is contained in the Operating and Financial
Review as set out on pages 45 to 54 of this report.
9. Dividends
A fully franked final dividend of 18.5 cents per fully paid ordinary share for the year ended 30 June 2021 was paid on
24 September 2021, and a fully franked interim dividend of 22.0 cents per fully paid ordinary share for the year ended 30 June 2022 was
paid on 18 March 2022.
On 26 August 2022, the Directors have declared to pay a fully franked final dividend for the financial year ended 30 June 2022 of
20.5 cents per fully paid ordinary share (2021: 18.5 cents per fully paid ordinary share), to be paid on 23 September 2022.
Further details of dividends provided for or paid are set out in Note 15: Dividends to the Consolidated Financial Statements
on page 109.
40 Annual Report 2022
Annual Report 2022 41
10. Capital management
14.2 Lottery Retailing
Further to the announcement on 26 August 2022, as part of the Company’s proactive approach to capital management, the Directors
have approved an on-market share buy-back of up to $25 million. The buy-back is expected to commence in September 2022. The
timing and number of shares to be purchased will depend on the prevailing share price and alternative capital deployment opportunities.
The Company reserves the right to vary, suspend or terminate the share buy-back program at any time.
11. State of Affairs
In the opinion of the Directors, there were no significant changes in the state of affairs of the Group during the financial period except as
otherwise noted in this Report.
12. Corporate Governance Statement
The Corporate Governance Statement is available on the Company’s website at
https://www.jumbointeractive.com/corporate_governance_statement.pdf.
13. Events subsequent to the reporting period
Apart from the final dividend declared and the on-market share buy-back announced on 26 August 2022, the Directors are not aware of
any matter or circumstance that has arisen that has significantly affected, or may significantly affect, the operations of the Company in
the financial years subsequent to 30 June 2022.
14. Likely developments, key business strategies and future
prospects
Following continued success in the Australian lottery retailing sector, the Company is seeking to leverage its proprietary lottery
software platform and lottery management expertise into new markets outside of Australia. The current operating model has been
designed to increase the pace of execution, with three distinct operating segments: Lottery Retailing, SaaS and Managed Services.
Over the medium to long-term, the Company’s expectation is for the SaaS and Managed Services segments to grow and make a
material contribution to Group earnings.
14.1 Overview of Group
The Group is a dedicated digital lottery software and services company, providing its proprietary lottery software platform and lottery
management expertise to the charity and government lottery sectors in Australia and globally.
The consolidated entity is dedicated to developing and operating the world’s best lottery experiences.
Our vision is to ‘make lotteries easier’ which relies on:
•
•
A world-class lottery software platform; and
An exceptional player experience.
Our strategy is to grow the business through an expanded product range and expanded geographic locations, distributed on a
standardised basis through three operating segments being Lottery Retailing, Software-as-a-Service and Managed Services in
domestic and international markets.
The Lottery Retailing segment is a well-established, fully accredited retailer of lottery tickets through the flagship Oz Lotteries brand,
which include the sale of Australian lotteries (national and charities) in eligible jurisdictions in both Australia and internationally.
The Lottery Retailing segment is underpinned by a strong and long-standing relationship with The Lottery Corporation Limited (TLC),
which was extended for a further 10 years in August 2020 (Agreement). TLC was demerged from Tabcorp on 24 May 2022 as a
separate listed company on the Australian Securities Exchange and is Australia’s exclusive operator of licensed lotteries for all
Australian states except for Western Australia. Sale of national lottery games are undertaken through the following lottery agreements
with TLC:
•
•
•
•
Victoria – 10 years to 25 August 2030 with renewal negotiations 9 months prior to expiry, for sales to customers
in Victoria
New South Wales – 10 years to 25 August 2030 with renewal negotiations 9 months prior to expiry, for sales to customers in
New South Wales, Tasmania and the Australian Capital Territory
South Australia – 10 years to 25 August 2030 with renewal negotiations 9 months prior to expiry, for sales to customers in
South Australia
Northern Territory – 10 years to 25 August 2030 with renewal negotiations 9 months prior to expiry, for sales to customers in the
Northern Territory and eligible overseas jurisdictions
The TLC service fee increased from 1.5% of the subscription price in FY2021 to 2.5% in FY2022 and will increase to 3.5% in FY23 and
4.65% in FY24, and 4.65% is payable on subscription price in excess of $400,000,000 for any of the applicable financial years.
The domestic digital lottery market is currently estimated to be 37.7% of the total domestic lottery market (~$7.2bn) and increasing by 3-
4 percentage points per annum. This compares to more mature overseas markets such as the United Kingdom (UK) that has 42% digital
penetration, and some of the Scandinavian lotteries with penetration even higher.
The Group commenced selling charity lottery tickets in July 2015 with a total of 9 charities using Oz Lotteries to sell lottery tickets
including charities such as Mater, Endeavour Foundation, Surf Life Saving, RSPCA and the Deaf Lottery Association. Charity ticket
sales currently represent ~2% of total Lottery Retailing annual ticket sales.
The Oz Lotteries business is well-positioned to continue to capitalise on the trend of increasing digital adoption and the higher
propensity for players to purchase lottery tickets on the internet or using a mobile device. Ticket sales continue to be significantly
impacted by large jackpot activity which remains outside of the business’s influence, however a persistent focus on innovation to
improve player engagement and enhance the player experience is expected to continue to drive revenue growth.
14.3 Software-as-a-Service
The Company has identified a significant opportunity to license its proprietary lottery software platform ‘Powered by Jumbo’ (PBJ) to
government and charity operators in Australia and globally. As at 30 June 2022, four SaaS client agreements had been operationalised
in Australia. In November 2020, the Company secured a United Kingdom Gambling Commission software license, which permits the
Company to supply its software to Gambling Commission licensed operators. Following this, the Company signed an agreement with its
first UK charity client, St Helena Hospice which went partly live in November 2021 and fully live in March 2022.
Outside of Australia, the Company has prioritised the UK, Canadian and United States lottery sectors. Following changes in legislation at
both a federal and state level in the United States, some states have started to adopt digital lotteries in the form of iLottery, albeit the
take up has been relatively slow due to retail opposition and the need to pass legislation to permit iLottery programmes. As at 30 June
2022, 14 out of 48 US lottery jurisdictions either have iLottery operations or have passed legislation for iLottery. This remains an
underdeveloped segment of the market and we expect more states to adopt iLottery over time. We will continue to closely monitor
developments in this market.
The SaaS segment remains well placed for growth in these markets over the medium to long term.
14.4 Managed Services
The Company acquired Gatherwell Limited (Gatherwell) in the UK in November 2019 which is a licensed External Lottery Manager
(ELM), providing a turnkey digital lottery solution to lotteries across the UK. Gatherwell’s main customers are schools through
www.yourschoollottery.co.uk, local authorities and councils, and small society lotteries through www.onelottery.co.uk and other
individual brands.
In June 2022, the Company acquired Stride Management Corp. (Stride) in Canada, a Lottery Project Manager, providing a full range of
services including lottery management, ticket fulfilment, and marketing services in Alberta and Saskatchewan.
42 Annual Report 2022
Annual Report 2022 43
The growth prospects for Managed Services are compelling. As at 30 June 2022, Gatherwell serviced ~2,100 out of approximately
30,000 schools and ~110 out of approximately 400 authorities, and Stride has the opportunity to expand into other Canadian Provinces
16.
Impacts of legislation and other external requirements
and Territories.
14.5 Group
The Company has invested in establishing strong foundations and capabilities to execute on our growth strategy, including ensuring our
risk management and governance settings are robust and establishing a Senior Leadership Group. Excluding one-off items, underlying
expenses increased 33.2% (and 31.4% excluding Stride). In FY2023, the Company will continue to invest in the business with operating
cost growth expected to moderate. The majority of the planned investment is aligned to driving revenue growth across the three
segments and includes additional investment in people, technology and marketing.
Compliance with the relevant legislation and regulation is a cornerstone in the way we do business. We operate in a complex
and evolving compliance environment where we often face multi-layered state/territory, Australian and international
legislative requirements.
We have focussed on privacy requirements in a global setting including EU General Data Protection Regulations (EU GDPR) and
Australian Privacy legislation and guidelines, as well as Responsible Gambling/Know Your Customer (KYC) during the financial year
ended 30 June 2022 and are looking forward to continuing to improve our environmental and social impact. Our inaugural Sustainability
Report for the year ended 30 June 2022 is available on our website.
14.6
Impact of COVID-19
17.
Indemnifying officers or auditors
The change in consumer behaviour from COVID-19 has had a net positive impact on the Group’s financial performance up to 30 June
2022. The mobility restrictions put in place from the government mandated lockdowns to contain the spread of the pandemic and
support the economy has resulted in an increase in digital lottery sales, although ticket sales remain highly correlated to jackpot activity.
The Group has a Distributed Workplace policy and approximately 65% of our employees continued to work from home or remotely in
FY2022. High customer service levels and staff productivity levels continued to be maintained over this period.
15. Key risks
During the financial year, the Company paid premiums in respect of a contract insuring Directors, Secretaries and Executive Officers of
the Company and its controlled entities against a liability incurred as Director, Secretary or executive officer to the extent permitted by
the Corporations Act 2001.
The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Group has not otherwise,
during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer of the
Company or any of its controlled entities against a liability incurred as such an officer. No indemnity has been provided to, or insurance
paid on behalf of, the auditor of the Group.
The Group is continually monitoring the risks our business faces and ensuring the relevant risk response sufficiently mitigates these
risks in-line with the risk appetite set by the Board. Some key risk areas identified are as follows:
18. Non-audit services
Technology, Data Protection &
Cyber Security
Our platform and associated technologies are critical assets of the Group and we will continue to invest in
people and resources to ensure its quality and longevity. The Group takes a holistic approach to data
protection which encapsulates both our obligations under relevant Privacy Legislation as well as Cyber
Security measures. The Group is committed to ensuring we have adequate protection to prevent both
accidental and malicious data breaches against increasingly sophisticated threat actors and landscape.
Failure to execute strategy
In particular in expansion into new markets and international opportunities. The Group is cognisant of
maintaining a balance between focusing attention and effort on established and mature revenue channels to
safeguard our investments and accepting higher risk profiles in the pursuit of acquiring international market
access and returns to dilute concentration risk.
People & Culture
Including achieving a balance of the right skill sets and resourcing in an increasingly competitive market for
technical talent and offering development pathways to foster talent and future-proof our business
Regulatory & Compliance
Risk of non-compliance with regulatory expectations or failure to meet community expectations.
International expansion has resulted in complex multi-layered legal and regulatory requirements which the
Group is committed to fulfilling. The Company pursues a rigorous approach to adopt broader best practice
that extends beyond our legal requirements to ensure a fair and transparent lottery environment and justified
trust from our community and regulators.
Financial Credit, Fraud & Liquidity
Continual analysis of performance against budget, allocation of capital and the pursuit and communication of
an appropriate strategy are vital mitigation activities in the control framework that ensures the robustness of
the stewardship of the Group's financial activities.
External
Economic, Geopolitical,
Environmental, Social,
Market & Third Party
External Market conditions may impact cost of living and associated household disposable income which
may affect lottery ticket sales although these are also significantly impacted by large jackpot activity which
remains outside of the business’ influence. We endeavour to monitor emerging risks presented by
competition activity and disruption.
To read more about our Risk Management Framework, please see the Corporate Governance Statement
(https://www.jumbointeractive.com/corporate_governance_statement.pdf).
During the financial year, the Company’s auditor, BDO Audit Pty Ltd, or their related practices (herein also referred to as ‘BDO’),
performed other services in addition to its audit responsibilities.
On the advice of the Audit and Risk Management Committee, the Directors are satisfied that the provision of non-audit services, during
the year, by the auditor (or by another person or firm on behalf of the auditor), is compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001.
The Directors are satisfied that the provision of non-audit services by the auditor did not compromise the auditor independence
requirements of the Corporations Act 2001 for the following reasons.
•
•
all non-audit services have been reviewed by the Audit and Risk Management Committee to ensure that they do not impact the
integrity and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants.
Details of the amounts paid to BDO for non-audit services throughout the year are set out below:
Taxation services
Tax compliance services – preparation of tax returns
Transfer pricing consulting
Other tax advice
Total taxation services
Other services
Whistleblower services
Due diligence – other BDO-related firm
Total other services
Total fees for non-audit services
Consolidated
FY2022
$
48,100
23,300
15,580
86,980
6,500
11,327
17,827
104,807
FY2021
$
48,000
13,000
53,131
114,131
5,000
110,000
115,000
229,131
44 Annual Report 2022
Annual Report 2022 45
19. CEO and CFO declaration
The Chief Executive Officer (CEO) and Chief Financial Officer (CFO) have provided a written declaration to the Board in accordance
with section 295A of the Corporations Act 2001. With regards to the financial records and systems of risk management and internal
compliance in this written declaration, the Board received assurance from the CEO and CFO that the declaration was founded on a
sound system of risk management and internal control, and that the system was operating effectively in all material respects in relation
to the reporting of financial risks.
20. Proceedings against the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the
Corporations Act 2001.
21. Rounding of amounts
The company satisfies the requirements of ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 issued
by the Australian Securities and Investments Commission in relation to rounding of amounts in the Directors’ report and the financial
statements to the nearest thousand dollars. Amounts have been rounded off in the Directors’ report and financial statements in
accordance with that Legislative Instrument.
22. Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration, as required under section 307C of the Corporations Act 2001, is set out on page 75.
Susan M Forrester
Chair of the Board
26 August 2022
Mike Veverka
Chief Executive Officer and Executive Director
Operating and
Financial Review
23. Explanation of results
The Group reports revenue on a net revenue inflow basis where it considers that it acts more as an agent than as a principal such as
with the sale of lottery tickets. The gross amount received for the sale of goods and rendering of services is advised as Company Total
Transaction Value (TTV - ‘Company’). In addition, where the Group acts as a licensor of its software platform, the gross amount of
third-party lottery ticket sales transacted through its software platform is advised as third-party Total Transaction Value
(TTV - ‘Third-party’).
The Lottery Retailing division continues to be the largest contributor to Group revenue and profits. Revenue for this segment increased
due to a higher level of large jackpots and increased customer activity. Gross profit however has not increased to the same extent as
revenue largely due to the 1% step-up in the service fee payable to TLC. The SaaS segment revenue and profits increased as all four
Australian clients were fully operational on the Powered by Jumbo (PBJ) platform. The Managed Services division includes Gatherwell
in the UK, Stride in Canada which contributed 1 month to FY2022, and Jumbo Fundraising in Australia which is not considered material.
On 24 May 2022, Tabcorp’s lottery and keno business was de-merged and listed as a separate company on the Australian Securities
Exchange as The Lottery Corporation Limited (TLC). There is no impact on Jumbo’s relationship with TLC, the Agreement, or
operations as a result of the de-merger.
The change in consumer behaviour arising from the COVID-19 pandemic continues to be positive for the Group in general. With the
movement of people being restricted during lockdowns, it is easier to purchase lottery tickets online and like-for-like jackpot sales have
shown a continuing positive trend. Group staff continuing to work from home and flexible working arrangements have also reduced
some administration expenses during this period. Rising inflation and higher interest rates could affect consumer disposable income
which may have an impact on lottery ticket sales.
The financial position of the Group is sound with strong liquidity. While the economic environment, in particular the extent of the Reserve
Bank of Australia (RBA) rate hikes and the resulting impact on the real economy remain uncertain, the ongoing profitability, balance
sheet strength and prudent management of the Group means it is well placed to take advantage of any potential acquisitions and/or
opportunities globally.
As the technology industry is fast-moving with the rate of technological change high, the Group continues to invest in its software
platforms. In addition, better data management leads to an improved customer experience and increased sales, so the Group has
increased investment in technology for the benefit of both its own Lottery Retailing operations as well its SaaS customers. The Group
also continues to invest in its staff, by ensuring remuneration levels competitive with the market, investment in training and development
and additional resourcing to support growth. During the financial year, the Group received ISO 27001:2013 re-certification of the
information security management systems applying to its core software platform product.
Investment in the three main pillars that support the ongoing growth of the Group are as follows:
•
•
•
$5,706,000 (2021: $6,406,000) invested in the proprietary software platform (intangible assets);
$8,597,000 (2021: $5,698,000) invested in marketing activities for the acquisition, engagement and retention of customers; and
$17,196,000 (2021: $13,023,000) on employees who provide the software development and marketing skills, customer support
services, and management.
24. Result highlights (underlying and statutory operations)
The Group has reported on TTV; underlying EBITDA, EBIT, and NPAT. These measures are not defined under International Financial
Reporting Standards (IFRS) and are, therefore, termed "non-IFRS" measures and are unaudited.
EBITDA is Group earnings before net interest, tax, depreciation and amortisation, while EBIT is defined as Group earnings before net
interest and tax.
Underlying EBITDA, EBIT, and NPAT is defined as EBITDA, EBIT, and NPAT adjusted for significant non-recurring, non-operating items,
and is provided as a useful indicator of the Groups’ operating financial performance on a year-by-year basis.
46 Annual Report 2022
Annual Report 2022 47
Variance
24.1 Major items
TTV
– Company
– Third party
Revenue
Revenue margin (%)
EBITDA – underlying1
EBIT – underlying1
NPAT – underlying1
Adjustments1
– Revenue
– Expenses
– Fair value movement on financial liabilities
– Tax effect
EBITDA
EBIT
NPAT
Cash at bank
Net assets
Net tangible assets
Share price at year end ($)
Dividend paid per share (cps)
Total shareholder return (%)
Earnings per share – underlying (cps)
Return on capital employed (%)2
Shares on issue (million)
Market capitalisation ($ million)
EBITDA margin – underlying (%)
EBIT margin – underlying (%)
1 refer page 48 for the reconciliation to statutory earnings
2 NPAT/Closing equity
FY2022
$’000
659,924
460,637
199,287
104,251
15.8%
55,097
46,355
32,205
525
(1,577)
-
23
54,045
45,303
31,176
68,930
92,983
45,416
14.22
40.5
(17.7%)
51.5
33.5%
62.8
892.7
52.9%
44.5%
FY2021
$’000
486,981
365,444
121,537
83,319
17.1%
48,922
40,683
28,346
-
(1,469)
(177)
259
47,276
39,037
26,959
63,139
85,326
45,751
17.77
35.0
89.1%
45.4
31.6%
62.4
1,109.7
58.7%
48.8%
%
35.5
26.0
64.0
25.1
(1.3ppt)
12.6
13.9
13.6
>100
7.4
(>100)
(91.1)
14.3
16.1
15.6
9.2
9.0
0.7
(20.0)
15.7
(>100)
13.4
1.9ppt
0.6
(19.6)
(5.8ppt)
(4.3ppt)
•
•
TTV up $172,943,000 or 35.5% with increased contributions from all three operating segments.
Revenue up $20,932,000 or 25.1% to $104,251,000 with:
•
•
Lottery Retailing up $16,015,000 or 21.3% due to a higher level of jackpot activity and increased customer activity;
Software-as-a-Service up $10,648,000 or 33.2% as Lotterywest was only a SaaS customer from 21 December 2020 in the
pcp (see details under SaaS in Review of Operations) and the growth achieved by our SaaS customers; and
• Managed Services up $1,537,000 or 46.6% reflecting 26.4% growth in Gatherwell and a one-month contribution from Stride
which was acquired 1 June 2022.
•
Underlying EBITDA up $6,175,000 or 12.6% to $55,097,000.
•
•
Lottery Retailing – an increase in the TLC service fee from 1.5% to 2.5% of the subscription ticket costs, under the terms of
the agreement;
SaaS - fully operationalised all four Australian clients and our first UK customer staged from November 2021 to March 2022; and
• Managed Services - includes the acquisition of Stride with the completion payment of $8,995,000 paid out of cash reserves and
contributing 1 month to the financial results (acquired 1 June 2022).
25. Consolidated results of operations
TTV and Revenue have increased with increased contributions from all operating segments. Cost of sales has increased with a step-up
in the TLC service fee from 1.5% to 2.5% of subscriptions under the terms of the Agreement and as a function of growth. On an
underlying basis (excluding one-off costs), Expenses increased 32.9% mainly due to higher employee and marketing expenses to
ensure successful execution of our growth strategy.
The Group’s financial performance is summarised below.
TTV
Revenue
Cost of sales
Gross profit
Other income
Expenses
EBITDA
Depreciation and amortisation
EBIT
Net interest revenue
NPBT
NPAT attributable to members
FY2022
$’000
659,924
104,251
(14,473)
89,778
995
(36,728)
54,045
(8,742)
45,303
(66)
45,237
31,176
FY2021
$’000
486,981
83,319
(8,339)
74,980
386
(28,090)
47,276
(8,239)
39,037
17
39,054
26,959
Variance
%
35.5
25.1
73.6
19.7
>100
30.8
14.3
6.1
16.1
>100
15.8
15.6
26. Group performance overview
•
•
•
•
TTV up $172,943,000 or 35.5% to $659,924,000 largely from the Lottery Retailing segment that performed well with increased
customer activity and large jackpot activity, increasing scale within the SaaS segment, and continued strong growth in the
Managed Services segment that includes Gatherwell and Stride for 1 month (which also contributed to increased expenses).
Revenue up $20,932,000 or 25.1% to $104,251,000 with contributions from:
•
•
Lottery Retailing up $16,015,000 or 21.3% to $91,098,000 mainly due increased customer activity and large
jackpot activity;
SaaS up $3,380,000 or 68.5% to $8,318,000, net of intersegment revenue, largely as a result of organic growth of existing
customers and Lotterywest only contributing from 21 December 2021 in the pcp; and
• Managed Services up $1,537,000 or 46.6% to $4,835,000 mostly due to organic growth of Gatherwell and a
one-month contribution from Stride which was acquired 1 June 2022.
Cost of sales up $6,134,000 or 73.6% principally due to the increased TLC service fee from 1.5% in the pcp to 2.5% of the
subscription ticket costs and increased merchant fees from TTV growth in Lottery Retailing.
Expenses up $8,638,000 or 30.8% predominantly reflecting:
•
$101,000 increase in finance costs due to the bank facility secured in January 2022 to fund the StarVale UK acquisition
(pending regulatory approval, expected by the end of Q1FY23);
48 Annual Report 2022
Annual Report 2022 49
•
•
•
•
$4,172,000 increase in employee benefits expense largely from (i) expanded KMP, (ii) establishing a Senior Leadership
Group to ensure the successful transition of acquisitions and execution of strategy, (iii) annual remuneration increases, (iv) a
Short-Term Incentive (STI) pool of $1,013,000 (FY2021: $243,000), and (v) higher voluntary attrition coupled with a relatively
higher cost to replace staff given a tighter labour market. Share-based expenses have increased $371,000 to $1,339,000
largely due to accumulation of LTI rights, and $283,000 one-month contributions from Stride;
$788,000 decrease in consultancy and legal expenses with the pcp including the one-off expenses ($867;000) associated
with the extension of the TLC agreement and $462,000 for USA consulting expenses (reported in employee benefits
expense in FY2022);
$2,899,000 increase in marketing expenses to drive growth; and
$2,254,000 increase in other expenses largely due to (i) $759,000 increase in insurance with increased cover and
premiums due to an expanding business and market conditions, (ii) $187,000 increase in recruitment expenses for new and
replacement staff, (iii) $455k increase in travel expenses due to the lifting of international travel restrictions, and a one-off
$604,000 provision for historical charge backs prior to FY2022.
•
EBITDA up $6,769,000 or 14.3% to $54,045,000 with contributions from:
•
•
Lottery Retailing $30,112,000;
Software-as-a-Service $28,944,000;
• Managed Services $844,000;
• Other reconciling corporate net operating expenses ($6,850,000); and
• Other revenue $995,000.
•
Depreciation and amortisation expense up $503,000 or 6.1% mainly due to:
•
•
$125,000 higher amortisation of the $15,000,000 capitalised TLC extension fee being amortised over the 10-year term of
the agreements with only 11 months in pcp; and
$271,000 increased amortisation of capitalised website developments costs relating to the proprietary software.
27. Reconciliation to statutory earnings
Underlying earnings is a non-statutory measure and is the primary reporting measure used by management and the Group’s chief
operating decision maker for the purposes of managing and assessing the financial performance of the business. Underlying earnings is
derived by adjusting the statutory earnings for significant non-recurring, non-operating items as follows:
Underlying EBITDA
Underlying EBIT
Underlying NPAT
Add/(deduct) significant items
– Profit on disposal of subsidiary
– Acquisition costs
– Consulting and legal fees
– Chargebacks in years prior to FY2022
– Fair value movement on financial liabilities
EBITDA
EBIT
Taxation benefit
NPAT
FY2022
$’000
55,097
46,355
32,205
525
(973)
-
(604)
-
54,045
45,303
23
31,176
FY2021
$’000
48,922
40,683
28,346
-
(602)
(867)
-
(177)
47,276
39,037
259
26,959
The acquisition costs relate to the acquisition of Stride Management Corp. (Stride) in Canada on 1 June 2022 and StarVale Group in the
UK with a conditional purchase agreement signed 27 January 2022. The chargebacks in years prior to FY2022 relate to chargebacks in
Lottery Retailing (see Review of operations – Lottery Retailing for details). The profit on disposal of subsidiary relates to the sale of the
lightningpayroll.com.au business (see Review of operations – SaaS for details).
28. Review of operations
28.1 Lottery Retailing
Jumbo’s Lottery Retailing business operates the www.ozlotteries.com website and sells tickets in Australian national draw lottery
games to customers in all Australian states and territories and other eligible jurisdictions excluding Queensland and Western Australia,
under 10-year agreements to 25 August 2030 with the licenced operator The Lottery Corporation (TLC). The business also sells tickets
in Australian charity lottery games to customers in Australia and other eligible jurisdictions under agreements with several licenced
registered charities in Australia.
TTV - company
Revenue
Gross profit
Operating expenses
EBITDA
Revenue / TTV
Gross profit / Revenue
Opex / Revenue
EBITDA / Revenue
FY2022
$’000
460,637
91,098
43,096
(12,984)
30,112
19.8%
47.3%
14.3%
33.1%
FY2021
$’000
365,444
75,083
40,109
(9,729)
30,380
20.5%
53.4%
13.0%
40.5%
Variance
%
26.0
21.3
7.4
33.5
(0.9)
(0.7ppt)
(6.1ppt)
1.3ppt
(7.4ppt)
Key events in the reporting period are:
•
•
•
•
The increase in the service fee (cost of sales) from 1.5% to 2.5% on subscription costs (cost of ticket purchases) paid to TLC. The
service fee was introduced at 1.5% effective 13 July 2020 under the 10-year agreement with TLC, and increases on 1 July annually
to 2.5% in FY2022, 3.5% in FY2023 and 4.65% for FY2024 and beyond. If the cost of ticket purchases exceeds $400,000,000 in
any applicable year, then a service fee of 4.65% applies to the excess amount;
The ongoing intersegment software management fee of 7.5% of TTV payable to the SaaS segment for the development,
improvement and maintenance of the proprietary lottery software platform and provision of data information and analysis using
technology such as Artificial Intelligence (AI) and machine learning;
$2,486,000 increase in marketing spend that contributed to increasing TTV/Revenue; and
$604,000 non-recurring expense in Operating expenses that relate to chargebacks prior to FY2022. A chargeback occurs when
a cardholder contacts their financial institution to dispute a charge they’ve incurred. If the financial institution believes that the
cardholder has a valid reason for the dispute, they will reverse (charge back) the amount originally paid to us. During a regular
internal review of processes and procedures, disputed transactions totalling $604,000 relating to periods prior to FY2022 were
identified as having been found in favour of the cardholder, but had not yet been expensed appropriately, and a one-off expense
has now been recognised in FY2022. Processes and procedures have since been changed to prevent this situation reoccurring.
Chargebacks remain an ongoing, albeit relatively immaterial (< 0.1% of TTV), cost of doing business and is reflected in cost of sales.
1H22
2H22
FY22
1H21
2H21
FY21 FY variance %
TTV - third party
234,655
225,982
460,637
185,684
179,760
365,444
26.0
Less: Lotterywest
-
-
-
(15,964)
-
(15,964)
(>100)
Underlying TTV
234,655
225,982
460,637
169,720
179,760
349,480
Revenue
46,727
44,371
91,098
Less: Lotterywest
-
-
-
Underlying Revenue
46,727
44,371
91,098
37,807
(3,159)
34,648
37,276
75,083
-
37,276
(3,159)
71,924
31.8
21.3
(>100)
26.7
50 Annual Report 2022
Annual Report 2022 51
TTV has increased by $95,193,000 or 26.0% to $460,637,000 (2021: $365,444,000) and by $111,157,000 or 31.8% on an underlying
basis, mainly due to higher large jackpots and increased customer activity. New customer numbers, customer activity and customer
spend were all higher than pcp. Large jackpot numbers, aggregate and average value were also up on pcp.
Underlying TTV
FY2022
FY2021
Variance
Lotteries
Charities
Total TTV
$’000
452,125
8,512
460,637
%
98.1
1.9
100
$’000
341,031
8,449
349,480
%
97.6
2.4
100.0
%
32.6
0.7
31.8
The number of large jackpots is an important driver of TTV. The TTV trend over the last three financial year periods in the context of
such jackpots in Australia is summarised as follows:
TTV - Lottery Retailing
$460,637,000
$365,444,000
$339,723,000
Reported Revenue – Lottery Retailing
$91,098,000
$75,083,000
$68,486,000
FY2022
FY2021
FY2020
OzLotto / Powerball Division 1 of $15 million or more
Number of jackpots of $15 million or more
43
38
39
Average Division 1 jackpot of $15 million or more
$40,698,000
$31,842,000
$40,128,000
Peak Division 1 jackpot during the full year period
$120,000,000
$80,000,000
$150,000,000
Aggregate Division 1 jackpots during the full year period
$1,750,000,000
$1,210,000,000
$1,565,000,000
Customer activity
Number of new online accounts
Cost per lead (CPL)
Number of active online customers / players
Average spend per active online customer / player
395,916
$18.33
918,832
$475.13
246,770
$20.31
806,139
$423.11
350,319
$14.28
827,411
$383.12
The number of new online accounts for the 12-month period to 30 June 2022 is 60.4% higher than pcp largely due to an increase in
large jackpot activity which was 13.2% higher in number and 44.6% higher in aggregate value than pcp, with the average large jackpot
value 27.8% higher than pcp, together with increased absolute marketing spend to acquire customers.
The number of active online customers for the 12-month period to 31 June 2022 is 14.0% higher and average spend 12.3% higher than
pcp mainly from the higher large jackpot activity and continuously improving customer engagement and retention.
The underlying business remains strong as evidenced by an increase in TTV and Revenue and the following
Moving Annual Total (MAT):
Oz Lotteries Moving Annual Total (MAT)1 TTV – by Fiscal Quarter
Sales resulting from jackpots ≥ $15m
Sales resulting from jackpots <$15m
MAT
500
400
300
200
100
0
The signing of the TLC Agreement provides the Group with greater certainty over a longer period albeit at reduced returns following the
introduction of a service fee effective from 13 July 2020. The service fee is based on the cost of ticket purchases from TLC at 1.5% for
FY2021 purchases, 2.5% for FY2022 purchases, 3.5% for FY2023 purchases and 4.65% for FY2024 onward purchases, and 4.65% is
payable on subscription costs in excess of $400,000,000 for any of the applicable financial years. A software licence fee of 7.5% of
TTV was implemented in FY2021 reflecting an inter-segment payment to the SaaS segment in respect of licencing of the PBJ software
platform and use of the data analytics by the Lottery Retailing segment.
The single largest expense is Marketing of $7,850,000 (2021: $5,364,000) which is mainly customer acquisition costs of $7,257,000
(2021: $5,010,000) and tends to fluctuate in line with TTV/Revenue, followed by Employee benefits expenses $2,938,000 (2021:
$2,843,000) in respect of 20 staff employed in the segment of which the majority are digital marketing and customer support staff.
28.2 Software-as-a-Service (SaaS)
Jumbo’s SaaS segment licences the Jumbo lottery software platform, Powered by Jumbo (PBJ) to several customers nationally,
including to ozlotteries.com, and develops, improves and maintains the Jumbo proprietary platform. The business of licencing other
non-lottery proprietary software that it develops, improves and maintains (only a payroll software platform and website at
www.lightningpayroll.com.au) was sold on 30 June 2022 for $800,000 cash and a profit on disposal of $525,000. The contribution to
TTV, Revenue & EBITDA was $767,000 (2021: $828,000), $767,000 (2021: $828,000) and $538,000 (2021: $483,000) respectively
and was not disclosed as profit or loss from discontinued operations as it did not represent a separate major line of business or
geographical area of operations.
Software licence fees range between ~3.0% and ~9.5% of ticket sales (TTV) that are processed through the PBJ platform.
An intersegment fee of 7.5% is charged to the Lottery Retailing segment (ozlotteries.com client) as (i) PBJ has been customised for this
customer over many years at a significant investment compared to other customers who have received/receive an adapted version of
PBJ at a much lower investment and (ii) the customer has a significantly higher usage of other services such as AI and data analytics.
TTV - third party
Revenue
– external
– internal
Gross profit
Operating expenses
EBITDA
Revenue / TTV - external
Gross profit / Revenue
Opex / Revenue
EBITDA / Revenue
TTV - third party
Lotterywest
Underling TTV
Revenue - external
Revenue Lotterywest
Underlying Revenue
FY2022
$’000
167,465
42,708
8,318
34,390
42,391
(13,447)
28,944
5.0%
99.3%
31.5%
67.8%
FY2022
$’000
167,465
-
167,465
8,318
-
8,318
FY2021
$’000
104,844
32,060
4,938
27,122
31,926
(9,972)
21,954
4.7%
99.6%
31.1%
68.5%
FY2021
$’000
104,844
15,964
120,808
4,938
1,517
6,455
Variance
%
59.7
33.2
68.5
26.8
32.8
34.8
31.8
0.3ppt
(0.3ppt)
0.4ppt
(0.7ppt)
Variance
%
59.7
>100
38.6
68.4
>100
28.9
Q1
Q2
Q3
Q4
Q1
Q2
Q3 Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
1 Excludes contribution from Western Australia customers transitioned to Lotterywest’s white-labelled PBJ platform (effective 21 December 2020)
Revenue increased by $16,015,000 or 21.3% to $91,098,000 (2021: $75,083,000) and by $19,174,000 or 26.7% (2021: $10,517,000) on
an underlying basis, with the reported Revenue margin slightly lower at 19.8% (2021: 20.5%).
The financial year period has seen an increase in existing clients and a full 12-month contribution from Lotterywest compared to the pcp.
An agreement was signed with Lotterywest that involved transferring Jumbo’s Western Australia customers to Lotterywest and
providing them with a white-label platform for these customers that went live on 21 December 2020.
52 Annual Report 2022
Annual Report 2022 53
On 26 November 2020 Jumbo was granted a remote gambling software licence by the UK Gambling Commission. Following the grant
of this licence an agreement was signed with St Helena Hospice UK (SHH) on 23 December 2020, to provide it with the PBJ online
software platform which went partially live in November 2021 and fully live in March 2022, with an annual TTV of ~$10m p.a. This is
expected to be a catalyst for further UK-based SaaS agreements.
External TTV through the PBJ platform has increased by $62,621,000 to $167,465,000 from $104,844,000 leading to an increase in
external Revenue of $3,380,000 to $8,318,000 from $4,938,000, in the pcp. Note, not all our SaaS clients contributed to the pcp on a
full run-rate basis.
Employee benefits is the single largest expense at $9,427,000 (2021: $6,455,000) with 72 staff in this segment mainly reflecting
software engineers and an allocation of indirect staff expenses.
28.3 Managed Services
Jumbo’s Managed Services segment provides lottery management services including prize procurement, lottery game design,
campaign marketing, and customer relationship and draw management services. These services are provided in addition to the PBJ
lottery software platform provided by the SaaS segment to licensed charities in Australia and the UK. The business operates as Jumbo
Fundraising (JF) in Australia, Gatherwell Ltd as an External Lottery Manager (ELM) in the UK, and Stride as a Project Manager for
charity lotteries in Canada.
TTV
Revenue
Gross profit
Operating expenses
EBITDA
Revenue / TTV - external
Gross profit / Revenue
Opex / Revenue
EBITDA / Revenue
FY20221
$’000
31,822
4,835
4,291
(3,447)
844
15.2%
88.8%
71.3%
17.5%
FY2021
$’000
16,693
3,298
2,945
(2,031)
914
19.8%
89.3%
61.6%
27.7%
Variance
%
90.6
46.6
45.7
69.7
(7.7)
(4.6ppt)
(0.5ppt)
9.7ppt
(10.2ppt)
1 includes a 1-month contribution for Stride which was acquired 1 June 2022
JF provides a comprehensive lottery management service that includes prize procurement, lottery game design, campaign marketing,
and customer relationship and draw management. These services are provided to licensed charities that are looking to establish a
lottery program or enhance an existing program. The services are provided in addition to the PBJ lottery software platform provided by
the SaaS business to form a complete ’lottery-in-a-box’ service to charities of all sizes.
Ticket sales are generated from the Charities’ existing list of supporters via a marketing program managed by JF. Sales are further
supported by ozlotteries.com in the Lottery Retailing business segment.
The Gatherwell business in the UK operates as an ELM with 19 staff and provides lottery manager services to ~190 brands (charities)
(2021: 108) supporting 11,947 good causes (2021: 9,297). Employee benefits expenses and marketing expenses increased in FY2022
to drive growth in the medium term.
GBP £‘000s
TTV
Revenue
EBITDA
FY2021
£’000
12,175
2,288
682
FY2021
£’000s
9,310
1,840
663
Change
£’000
2,865
448
19
Variance
%
30.8
24.3
2.9
The Stride business in Canada operates as a Project Manager with 27 full-time staff (with an additional 50 to 75 rostered casual
call centre staff) and provides services including lottery operations, ticket fulfilment and marketing to charity lotteries in Alberta
and Saskatchewan.
28.4 Reconciling items
Other reconciling items are corporate expenses including costs in respect of the Directors, CEO, CFO, corporate advertising,
promotion and marketing, corporate investment costs and finance, tax, audit, risk, governance, and strategic project costs.
Operating expenses
FY2022
$’000
(6,850)
FY2021
$’000
(6,358)
Variance
%
7.7
The main increase in expense was insurance expenses increased by $686,000 with increased premiums predominantly due to market
conditions. Share-based payments increased $370,000 and finance expenses increased $140,000 with the new bank facility.
Consulting and legal expenses decreased $321,000 with the pcp including one-off expenses relating to the TLC 10-year agreement,
fair value movement in liabilities decreased $177,000, and Director fees decreased by $110,000 with some overlap in change in Chair
and Non-executive Directors in the pcp.
28.5 Reconciliation of statutory EBITDA
Lottery Retailing EBITDA
SaaS EBITDA
Managed Services EBITDA
Reconciling items
Other revenue - Group – see Note 1(b)
Group EBITDA
29. Financial position
FY2022
$’000
30,112
28,944
844
(6,850)
995
54,045
FY2021
$’000
30,380
21,954
914
(6,358)
386
47,276
The net assets of the Group have increased by $7,657,000 from 30 June 2021 to $92,983,000. The Group’s working capital, being
current assets less current liabilities, has increased from $45,271,000 in 2021 to $46,223,000 in 2022 mainly as a result of increased
cash and cash equivalents of $5,791,000, increased trade and other receivables of $2,508,000, decreased other current assets
$1,807,000, and increased trade and other payables of $5,234,000. Non-current assets increased by $10,938,000 to $56,192,000
due mainly to (i) an increase in intangible assets with the acquisition of Stride and (ii) the investment in the software platform.
The Directors believe the Group is in a sound financial position to expand and grow its current operations.
54 Annual Report 2022
Annual Report 2022 55
30. Significant changes in State of Affairs
Significant changes in the state of affairs of the Group for the financial year were as follows:
Increase in cash of $5,792,000 resulting from:
– Cash provided by operating activities
– Cash used in investing activities-mainly acquisition of Stride and website development costs (intangibles)
– Cash raised from the issue of shares
– Payment of lease liabilities in financing activities
– Dividends paid
See Statement of Cash Flow for details
Increase in non-current assets of $10,938,000 resulting largely from:
– Investment in website development costs net of amortisation
- Goodwill (acquisition of Stride)
- Customer contracts and relationships (acquisition of Stride)
- Software (acquisition of Stride)
– Changes in other non-current assets – see Statement of Financial Position
Increase in non-current liabilities of $4,233,000 resulting from:
– Contingent consideration (acquisition of Stride)
– Deferred tax liabilities
– Changes in other non-current liabilities – see Statement of Financial Position
30 June 2022
$’000
44,193
(13,301)
1,213
(1,017)
(25,296)
5,792
$’000
41
4,527
7,580
613
(1,823)
10,938
$’000
1,638
3,614
(1,019)
4,233
Remuneration Report
Contents
New Executive Remuneration Framework for FY2023
Remuneration Report for FY2022 - Audited
1.
2.
3.
4.
5.
6.
7.
Who is covered by this Report
Remuneration governance
Executive Remuneration Framework linked to performance
FY2022 Executive remuneration outcomes
Total Executive remuneration and benefits
Non-Executive Director Remuneration
KMP shareholdings
58
61
61
61
63
66
71
72
74
56 Annual Report 2022
Annual Report 2022 57
Message from the Chair of the People and Culture Committee
Our remuneration framework
Our remuneration framework was established in 2019 for a three-year cycle. We review our remuneration practices annually, making
changes as necessary to adjust to a changing environment. In FY22, in consultation with independent remuneration advisor, Crichton +
Associates, a review of our remuneration framework was conducted to ensure the framework remains effective for attracting and
retaining staff as well as fostering a culture and behaviours that supports our growth strategy. Feedback from shareholders, regulators,
and proxy advisors was also considered as part of the review process.
As a result of the review, our remuneration framework will be modified in FY23 for improved alignment with the Group’s strategic
priorities and to support the ongoing success of the Group. These modifications will position Jumbo with a framework aligned to
comparable companies in the market. Most notably, long term incentive performance conditions were revised to further align
performance with the creation of shareholder value supporting a more dynamic and flexible form of long term incentivisation. The
revised framework is intended to run for a three-year cycle, reviewed annually to ensure continued alignments with the Group’s
strategic priorities.
We also undertook an independent benchmarking exercise on the level of remuneration for Executive KMP. The review showed that
the current level of total fixed remuneration for direct reports of the CEO are below the market median for comparable companies,
having not increased for the past two consecutive years. In response, the PCC recommended an increase of fixed annual remuneration
for the CEO’s direct reports for FY23. This recommendation was approved by the Board, however in response to the challenging
economic environment at this time, the direct reports of the CEO have decided to defer the increase by 12 months. No increase will
occur for the CEO.
A summary of the changes is shown below on pages 58 and 60.
Outlook
After many years of building our business, Jumbo has made three significant acquisitions since FY20 which include: Gatherwell and
Stride, with StarVale expected to settle in Q1FY23. FY23 will see the consolidation and integration of these businesses into the Jumbo
Group. Integration can be challenging as we bring together multiple businesses that do things differently, have varied cultures, multiple
processes and systems, and who organise roles and responsibilities differently. Through strong strategic alignment we believe we can
create growth opportunities for Jumbo and our subsidiaries. We have a clear strategy and a strong leadership group in place. Our senior
leadership group will play a crucial role in unifying the Group and taking Jumbo to new heights.
I look forward to presenting our remuneration report to you at the Jumbo Annual General Meeting to be held on 10 November 2022.
Sharon A Christensen
Chair of People and Culture Committee
Dear Shareholders,
On behalf of the Board, I am pleased to present the Remuneration Report for Jumbo Interactive Limited for the 2022 financial year. This
report provides a comprehensive overview of the structure of our remuneration framework and its alignment with our business strategy.
Year in review
The company has a strong reputation as a great place to work, providing a diverse and inclusive culture where our people can thrive
through creativity and innovation. Our open and transparent communication helps to strengthen relationships across borders,
contributing to an environment of trust and connectedness, underpinned by our core values. During the year, Jumbo was certified as a
Great Place to Work in Australia, with >90% consensus amongst employees. Our distributed workplace and remote-first principles
provide significant flexibility for our people. Removing geographical barriers has produced opportunities to recruit candidates from
different locations and backgrounds, creating greater diversity amongst our team. Building a strong culture of engaged employees
within our hybrid work model has been a determining factor in our success. We want our employees to feel heard and celebrated, and to
have a sense of belonging.
In September 2021, we released an updated Commitment to Diversity, Equity and Inclusion (DEI) policy. Our DEI strategy reflects a
range of key focus areas including pay equity, inclusion, gender diversity and cultural diversity, with outcomes that leverage diversity
through inclusiveness such as increased workforce engagement, creativity, innovation, productivity, and retention. Our DEI goals
include but are not limited to commitment to equal pay for equal work, achieving a gender balance of 40/40/20, and implementing a
Reconciliation Plan. Jumbo is an honoured signatory of Hesta’s 40:40 Vision and have pledged to achieve gender balance by 2030.
This year presented some challenges, as the COVID-19 pandemic continues to be hugely disruptive to the labour market. A strong
demand for technical expertise has resulted in increased competition for candidates with specialised skills and the Great Resignation
has many candidates rethinking their careers. This, coupled with higher inflation and the need to provide greater transparency around
pay equity, has led to record high wage inflation, resulting in a higher level of salary increases being required to attract and retain top
talent. At a Group level, wages are the highest they have been in the past five years, considering wage increases, headcount growth,
and a full year of costs coming through for our Senior Leadership Group (established in April 2021).
Whilst operating in a challenging environment, employee engagement remains above external benchmarks at 83%, and 90% of
employees agree that they would recommend Jumbo as an employer of choice. We are in the process of conducting a comprehensive
review of our employee value proposition, which aims to distinguish Jumbo from our competitors by showcasing our business as a
leading technology and growth company, with a strong focus on our sustainability, employee wellbeing, career development and
purpose driven work practices. A keen focus on upskilling and reskilling our workforce will play a key role in developing our future talent
pipeline. Jumbo prides itself on the internal career pathways we offer our team, from internal mobility that looks at both physical location,
project variety and team secondment, to 38% internal succession into key roles in FY22. We recognise the need to continue to evolve
our employer brand to meet the expectations of our team and to be competitive in the global demand for talent.
Jumbo is committed to being a socially responsible and sustainable business with effective governance that positively impacts our
people, customers, and communities, while delivering long-term value for our shareholders. In November 2021, we established a
Sustainability Council composed of senior leaders from across Jumbo which is responsible for the implementation of our sustainability
program of work and reports directly to the Board each month. As part of its mandate, the Sustainability Council engaged with a broad
range of internal and external stakeholders and completed our first ESG materiality assessment which prioritise key ESG topics based
on the importance to our stakeholders and the impact on our business. We are proud to present our inaugural Sustainability Report for
FY22 which is available on our website.
Our key priority areas and the ESG targets we are seeking to achieve over the medium-term centre on gender diversity, responsible
gaming, delivering an industry leading player experience, employee engagement and achieving carbon neutral emissions. In FY23 we
will commence Climate Active Australia’s accreditation process as we seek to take positive action on climate change. In addition, ESG
metrics will be included as part of the Executive KMP short term incentive scorecard.
FY22 short term incentive
A financial component (50%) of the FY22 short term incentive metrics requires achievement of underlying net profit after tax growth,
subject to a sliding scale. Based on FY22 performance, 70% of this component was achieved. The operational component (50%)
includes Group TTV and EBITDA thresholds, settlement of acquisitions in Canada and the UK, and US market entry via
commercialisation of an agreement or acquisition. Settlement of Stride Management Corp. Canada was completed on 1 June 2022.
Whilst the acquisition of StarVale Group was not settled within the performance period it is only awaiting approval of the change of
control by the UK Gambling Commission which is anticipated by the end of Q1FY23. As a result, the Board exercised its judgement and
discretion that payment would be made for this component. US market entry was not achieved, and no payment will be made for that
component. The remaining measures for the non-financial components of the STI were achieved, the Board approved 90% of the
maximum opportunity for these components. Overall, the Board approved 80% of the maximum opportunity available for short
term incentives.
58 Annual Report 2022
Annual Report 2022 59
We believe that our new remuneration approach will improve the alignment between strategic business objectives, shareholder returns
and senior Executive remuneration. We are however acutely aware that this new remuneration approach may need to evolve as the
business continues to grow and as such we will actively engage with shareholders, proxy advisors and remuneration consultants and
consider their valued feedback.
FY23 Performance Metrics
The short and long-term incentive scorecard has been designed to ensure strong alignment between the strategic goals of the Group
and Executive KMP remuneration. From FY2023, the short-term and long-term incentive schemes will be expanded to include all
members of the Senior Leadership Group.
Short-term incentive (STI)
Metric
Target
Financial
(50%)
Underlying NPAT
Incremental scale of a minimum 6% increase in NPAT (representing
10% of STI financial award) to 20% and above increase in NPAT
(representing 100% of STI financial award)
Weighting
100%
Non-Financial (50%)
Group Financials
Underlying NPAT (Gate for Non-Financial KPIs)
40%
ROIC
Lotterywest Expanded Agreement
Sustainability
Gender Diversity
Climate Active Certification
Carbon Neutral
Sustainability Benchmarking
Increase of Active Players
Employee Engagement Index
Voluntary Employee Attrition
Customer
Employee
Individual
Performance Evaluation
Long-Term Incentive (LTI)
10%
30%
10%
10%
Metric
Target
Weighting
JIN Shares
Relative TSR (Comparator Group – ASX 300 Accumulated Index)
60%
Underlying EPS Growth
40%
New Executive Remuneration Framework for FY2023
Remuneration Framework Review
Each year Jumbo reviews its remuneration framework, with FY22 being the final year of the framework’s three-cycle. In FY23,
enhancements to the remuneration framework will be implemented. Our approach has been informed by factors including an
independent review by an external remuneration consultant, proxy advisor and shareholder feedback on the FY21 Remuneration
Report, and our desire to pursue sustainable long-term growth for the Group and our shareholders.
Benchmark Peer Group
The starting point for the review of Executive remuneration was to identify a peer group of companies against which Jumbo could be
benchmarked for the purpose of setting an applicable level of Total Remuneration Opportunity (TRO) for Executives going forward.
The People and Culture Committee’s (PCC) objective in remuneration is to support the delivery of business outcomes that grow
shareholder value while continuing to explore value accretive business opportunities both domestically and internationally that will
successfully diversify our revenue stream.
To fulfil this objective, we need to ensure that we can attract and retain Executives who can execute on this strategy. The comparator
companies (ASX listed only) used for the purposes of the benchmark assessment of Executive KMP remuneration were determined
based on Market Capitalisation (MCAP). The Comparator Group – MCAP ASX consists of ASX listed companies with a market
capitalisation narrowly ranged in relation to Jumbo, with a slight upward emphasis given the growth aspirations of the business. This
produced 28 companies with a market capitalisation ranging from $803 million to $1,781 million. Jumbo (MCAP) was positioned at about
the median of this group at the time of benchmarking.
For FY23, the PCC undertook a review of Executive KMP fixed remuneration, having regard to market data provided by independent
remuneration advisor, Crichton + Associates. The review showed that the current level of total fixed remuneration for direct reports of
the CEO are below market median, having not increased for the past two consecutive years. In response, the PCC has recommended
an increase of fixed annual remuneration for the CEO’s direct reports, to be deferred for 12 months. This recommendation was
approved by the Board. In addition, remuneration for members of the Senior Leadership Group and employees were benchmarked
using a global rewards comparison tool. It is expected that salary costs will rise during FY23 in line with the market.
Key Changes
A notable change resulting from the review completed during FY22 involves the Long-Term Incentive (LTI) component of remuneration.
The LTI is currently awarded on the achievement of a performance condition over a three-year period, comprising a 100% restricted
equity component. At present, the long-term incentive has a single performance condition being a total shareholder return measure
based on an average 15-year historic index growth rate, with the hurdle being cliff vesting, widely critiqued by proxy advisors and other
shareholder representative groups.
Under the new framework equity grants will be awarded annually, contingent on the achievement of performance hurdles. Performance
will be tested on the vesting date and the equity is at risk until vesting. All equity is held subject to service and performance for 3 years
from grant date. The move to an annual grant allocation achieves a more dynamic and flexible form of long term incentivisation. A
second performance condition of earnings per share will also be introduced. The long-term incentive is intended to reward Executive
KMP for sustainable long-term growth aligned with shareholders’ interests. The allocation values are intended to be positioned in the 3rd
quartile of the relevant benchmark comparisons.
The TRO for each Executive will be targeted at the 3rd quartile, that is between the median and 75th percentile of executive remuneration
of the comparator benchmark group. Total fixed remuneration for Executive KMP will generally be positioned between the median and
62.5th percentile of relevant comparable ASX listed companies assessed from time to time, as well as subject matter expertise and
performance in the role.
From 1 July 2022, Richard Bateson ceased being a member of the Executive KMP and transitioned from the role of Chief Commercial
Officer to the role of International Lottery Advisor reporting to the Chief Executive Officer (CEO). The new role will support the CEO in
exploring international opportunities that would lead to long term profitability for all partners.
We are pleased to announce the promotion of Abby Perry to the Executive KMP team as Jumbo’s first Chief People Officer (CPO)
effective 26 August 2022. Jumbo’s growth is strongly supported by our people strategy and the CPO will oversee all elements of people
operations across the organisation including diversity, equity and inclusion, workplace culture, organisational design, talent acquisition,
employee experience and engagement, and learning and development. Abby brings a wealth of experience in human resources and
people operations, having worked in leadership roles within the technology industry over the past 10 years. This role will report to
the CEO.
60 Annual Report 2022
Annual Report 2022 61
Remuneration Report for FY2022 - Audited
The Directors present the Jumbo Interactive Limited Remuneration Report for Key Management Personnel (KMP) for the year ended
30 June 2022. This report outlines key aspects of our remuneration policy and framework adopted in FY2020, remuneration awarded
this financial year, and demonstrates the strong alignment between executive remuneration practices and the Group’s
performance outcomes.
This Report forms part of the Directors’ Report and sets out the remuneration arrangements of the Group for the year ended 30 June
2022 and is prepared in accordance with Section 300A of the Corporations Act 2001. The information has been audited as required by
Section 308(3C) of the Corporations Act 2001.
1. Who is covered by this Report
This Report outlines the remuneration arrangements in place for KMP of the Group in FY2022, which comprises all Non-Executive
Directors and Senior Executives who have authority and responsibility for planning, directing and controlling the activities of the Group.
The Non-Executive Directors and Executives that were the KMP of the Group during the financial year are identified as follows:
KMP
Non-Executive Directors
Susan Forrester
Giovanni Rizzo
Sharon Christensen
Executive KMP
Mike Veverka
David Todd
Xavier Bergade
Brad Board
Richard Bateson
Position
Term as KMP
Non-Executive Director and Chair of Board of Directors
Non-Executive Director
Non-Executive Director
Chief Executive Officer and Executive Director
Chief Financial Officer
Chief Technology Officer
Chief Operating Officer
Chief Commercial Officer
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Full year
2. Remuneration governance
The executive remuneration governance framework is managed by the PCC on behalf of the Board. The PCC oversees the
remuneration and governance framework to ensure remuneration practices are aligned with strategic objectives consistent with
remuneration principles and shareholder expectations.
2.1 Board of Jumbo Interactive Limited
The Board is chaired by Susan Forrester. The Board established the PCC, which recommends to the Board a fair and responsible
company-wide remuneration policy that promotes the creation of value in a sustainable manner.
2.2 People and Culture Committee
The People and Culture Committee consists of three Non-Executive Directors and is chaired by Sharon Christensen. In addition to the
Committee members, Committee meetings are also attended by the CEO, CFO, Head of People and Culture and the Company
Secretary.
The Committee makes recommendations for Board approval in relation to the Company’s remuneration strategy and is responsible for
the following:
•
Review and monitor the remuneration framework for Non-executive Directors, including the process by which any pool of Non-
executive Directors’ fees approved by shareholders is allocated to Non-executive Directors;
62 Annual Report 2022
Annual Report 2022 63
•
•
•
•
•
•
Review and monitor the remuneration framework for executives and senior managers, including fixed remuneration and
incentive compensation;
Assess the market and where necessary seek external advice to ensure that executives and senior managers are being rewarded
with remuneration packages commensurate with their responsibilities, and make recommendations to the Board on an incentive
scheme and any proposed increases;
Review annually the outcomes of short-term objectives with the aim of rewarding individuals fairly and equitably, and in line with
company performance;
Review the progress against long-term performance targets and make recommendations on equity allocations;
Review and make recommendations to the Board on the Company’s superannuation arrangements for Directors, executives,
senior managers and other employees; and
Review and monitor professional indemnity and liability insurance for Directors and senior management.
For further details of the composition and responsibilities of the People and Culture Committee (including a copy of the Committee’s
Charter), please refer to the Corporate Governance section on our website
(https://www.jumbointeractive.com/people_and_culture_committee.pdf).
2.3 Remuneration benchmarking
Executive remuneration is set with reference to the executive’s knowledge, experience and skills, the magnitude of the responsibilities
and complexities associated with the role and peer benchmarks. The peer group are comparable companies within the
ASX300. Periodically, the peer group is reviewed and updated, in conjunction with an independent remuneration consultant. The PCC,
with advice from an independent, external consultant, conducts a comparative analysis of the executive compensation against reported
roles within that identified peer group.
2.4 External and independent advice
The PCC engages with independent remuneration advisor, Crichton + Associates, on a regular basis to provide information about
market dynamics, trends and regulatory changes impacting Jumbo. The PCC considers this information and advice together with
market insights as part of the determination of appropriate recommendations for remuneration each year.
The total cost relating to external and independent advice from Crichton + Associates is $36,308.
The Board is satisfied that no remuneration recommendations (as defined in the Corporations Act 2001) were provided by Crichton +
Associates or any other external remuneration advisors during FY2022.
2.5 Executive KMP Service Agreements
The employment conditions of non-executive Directors are formalised by letters of appointment. Executive KMP employment
conditions are formalised in contracts of employment and have no fixed term. The employment contracts stipulate a range of terms and
conditions. These contracts do not fix the amount of remuneration increases from year to year, with remuneration levels reviewed
generally each year by the PCC.
Executive KMP
Mike Veverka
David Todd
Xavier Bergade
Brad Board
Richard Bateson
Notice period1
Restraint of trade
12 months
6 months
6 months
6 months
6 months
2 years
2 years
2 years
2 years
2 years
1 Any termination payment (notice and severance) will be subject to compliance with all relevant legislation and will not exceed 12 months of fixed remuneration
2.6 Related party transactions
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other
parties unless otherwise stated. Related party transactions are outlined in the table below.
i. Mr Mike Rosch, the father of Mr Mike Veverka, the CEO and executive Director of the Company,
rented an office from the Group.
office rent received
amounts owing to Group at year end
-
-
ii. Mrs Julie Rosch, the mother of Mr Mike Veverka, the CEO and Executive Director of the Company, is
engaged as a full-time employee within the Group.
-
Salary and superannuation
Consolidated Group
2022
$
12,706
1,165
2021
$
9,956
1,165
86,900
86,505
3. Executive Remuneration Framework linked to
performance
The Executive Remuneration Framework operates over a three-year cycle, commencing from 1 July 2019 and concluding
30 June 2022. The PCC aims to ensure that the Group’s remuneration practices are fair, reasonable, aligned with best practice
and consistent with the Group’s remuneration principles and framework.
3.1
Principles
Clearly articulate the
remuneration approach
and outcomes so they
are easy to understand
and more transparent to
shareholders
Strengthen alignment of
remuneration with our
strategic vision, with its
unique challenges and
opportunities, to create
long-term shareholder
value
Attract, motivate and
retain the talent that we
require to succeed in the
long-term
Create a total
remuneration
opportunity that ensures
strategic decisions are
focused on delivering
long-term value
3.2 Remuneration Framework – overview
The Executive Remuneration Framework is designed to align KMP short- and long-term objectives with shareholder and business
objectives through a combination of fixed remuneration and short- and long-term incentives aligned to Group strategy and based on
key performance areas affecting the Group’s financial results and company values.
The Total Remuneration Opportunity (TRO) comprises fixed remuneration and incentives. The remuneration framework for Executive
KMP comprises four components:
•
•
•
50% is paid as a fixed remuneration not ‘at risk’ that comprises a base salary and superannuation;
25% is payable as a Short-term Incentive (STI) ‘at risk’ component awarded on the achievement of performance conditions over a
12-month period that comprises a 50% cash component and a 50% component deferred for 2 years into a restricted equity
component with a formal claw-back mechanism;
25% is payable as a Long-term Incentive (LTI) ‘at risk’ component awarded on the achievement of a performance condition over a
three-year period that comprises a 100% restricted equity component with a formal claw-back mechanism; and
• Minimum shareholding requirement (MSR) comprising holding fully paid ordinary shares in the company to the value of 100% of
the TRO within five years of falling under the remuneration framework.
64 Annual Report 2022
Annual Report 2022 65
Setting the annual
STI pool
The PCC set an organisational total financial STI pool before the start of the financial year based on growth from the prior
financial year. The financial STI pool is formed as follows:
-
-
for every 1% of underlying NPAT growth between 6.0% to 10.0% underlying NPAT growth over the prior financial
year, 0.5% of NPAT will be allocated to the STI pool
for every 1% of underlying NPAT growth between 10.0% to 20.0% underlying NPAT growth over the prior financial
year, 0.25% of NPAT will be allocated to the STI pool
total organisational pool size will be capped at 5% of annual NPAT
-
Each executive’s share of the total STI pool created will be based on a calculation schedule of receiving between 0% to
100% of their maximum potential Financial STI opportunity depending on the level of underlying NPAT growth achieved
between 6% to 20%. As an example, if the underlying NPAT growth for the financial year lands at 12%, then the executive
will receive 60% of their maximum Financial STI potential.
Board discretion
The Board retains absolute discretion in respect of STI awards and final vesting outcomes. As part of its overarching
discretion, the Board may reduce final STI outcomes having regard to affordability considerations and the Group’s financial
performance over the period.
Forfeiture and
Termination
In the event of resignation or dismissal for cause or significant underperformance prior to payment of the STI, an Executive
KMP is not eligible for any STI award.
Malus and Clawback
If an Executive KMP had ceased employment on or after 1 April 2022 up to 30 June 2022 due to retirement, redundancy,
permanent disability, or death, they may be eligible for a pro-rata STI award calculated up to the last day of their
employment.
The PCC is responsible for assessing performance against KPIs and determining the STI to be paid. To assist in this
assessment, the committee receives detailed reports on the performance from management which are based on
independently verifiable data such as financial measures, market share, signed agreements and data available from
independent providers.
In the event of serious misconduct or a material misstatement in the Company’s financial statements, the committee can
cancel or defer performance-based remuneration and may also claw back performance-based remuneration paid in
previous financial years.
3.3 Remuneration Framework – further detail on key components
Remuneration element
Description
Approach and rationale
Long-term incentive (LTI)
Fixed remuneration
Comprising base salary, and
statutory superannuation.
Set with reference to the Executive’s knowledge, experience and skills, the magnitude
of the responsibilities and complexities associated with the role and peer
benchmarks.
Considered in the context of the total remuneration package payable to an Executive
to ensure that the entire remuneration package is fair and competitive.
Short-term incentive (STI)
– The STI is a maximum of 25% of TRO.
– Achievement of STI is measured 50% as to financial objectives and 50% on operational objectives.
– 50% of the total STI is payable as a cash and the remaining 50% is deferred in performance rights for two years.
– Performance against the STI scorecard is assessed by the PCC based on the Group’s annual audited results and financial statements and other data
provided to the Committee and a recommendation is provided to the Board.
– Deferred rights convert into shares after a 12-month qualifying period, with sale of shares restricted for a further 12 months.
– Executives will have entitlement to dividends and voting rights during their 12-month lock-up period.
Performance Metrics
The STI metrics align with our strategic priorities of market competitiveness, operational excellence, shareholder value and fostering talented and
engaged people.
Metric
Target
Financial
(50%)
Underlying NPAT1
Incremental scale of a minimum 6% increase in NPAT (representing 10% of STI
financial award) to 20% and above increase in NPAT (representing 100% of STI
financial award)
Non-Financial (50%)
Group Financials
Group TTV $650m (minimum TTV $550m)
Group EBITDA $54m (minimum EBITDA $48M)
Canada ELM
Settlement of earnings accretive acquisition of Stride Management
UK ELM
Settlement of earnings accretive acquisition of StarVale Group
US Market
Commercialisation of any agreement and/or on settlement of an acquisition
Weighting
100%
15%
10%
40%
25%
10%
1 statutory NPAT before non-recurring, non-operating items,
Each Executive will receive an annual grant of rights to a dollar value equal to 25% of TRO.
Rights are exercisable into shares three years after grant and achievement of the price performance hurdle. To qualify, the Jumbo share price must
outperform the historical growth rate of the ASX ‘total return’ All Ordinaries index (XAOA:ASX) in order for the rights award to vest. If the Jumbo share
price does not outperform the ASX All Ordinaries growth hurdle set, no vesting occurs even if JIN has outperformed its peers. This is designed to focus
executives on delivering sustainable long-term shareholder returns.
Jumbo’s share price performance hurdle is determined in three steps:
1.
‘Total return’ will be based on 15-year average return of the ASX All Ordinaries Total Return index;
2. The ‘return’ will be multiplied over a 3-year performance period on a compound basis and applied to Jumbo’s 90-day VWAP at the effective date;
3. Dividends declared over the three-year performance period will be added to the closing performance price.
Forfeiture and
Termination
Rights will lapse if the performance hurdle price is not met. Rights will be forfeited on cessation of employment unless the
Board determines otherwise as a ‘good leaver’, e.g., retirement due to injury, disability, death or redundancy.
Malus and Clawback
The PCC is responsible for assessing performance against KPIs and determining the LTI to be paid. To assist in this
assessment, the committee receives detailed reports on the performance from management which are based on
independently verifiable data such as financial measures, market share, signed agreements and data available from
independent providers.
In the event of serious misconduct or a material misstatement in the Company’s financial statements, the committee can
cancel or defer performance-based remuneration and may also claw back performance-based remuneration paid in
previous financial years.
66 Annual Report 2022
Annual Report 2022 67
4. FY2022 Executive remuneration outcomes
4.3.1 Board discretion
4.1
Statutory key performance indicators of the Group over the last five years
We aim to align our executive remuneration to our strategic and business objectives and the creation of shareholder wealth. The table
below shows measures of the Group’s financial performance over the past five years as required by the Corporations Act 2001.
However, these are not necessarily consistent with the measures used in determining the variable amounts of remuneration to be
awarded to KMP (see 3.3 above). As a consequence, there may not always be a direct correlation between the statutory key
performance measures and the variable component awarded.
TTV continuing operations ($’000s)
Net profit after tax – continuing operations ($’000s)
Net profit after tax – overall operations ($’000s)
Share price at year end (cps)
Dividends paid per share (cps)
Total shareholder return (%)
Earnings per share (cps)
Return on capital employed (%)
Market capitalisation ($‘000s)
FY 2022
$659,924
$31,176
$31,176
1422
40.5
(17.7%)
49.9
33.5%
FY 2021
$486,981
$26,959
$26,959
1777
35.0
89.1%
43.2
31.6%
FY 2020
$348,601
$25,883
$25,883
958
40.0
(50.5%)
41.5
32.8%
FY 2019
$320,659
$26,420
$26,420
2015
34.0
309.8%
43.9
34.1%
FY 2018
$183,146
$11,753
$12,127
500
35.5
101.3%
23.4
25.7%
$892,664
$1,109,714
$598,020
$1,251,794
$271,871
4.2 Fixed Remuneration
The fixed remuneration of executives consists of cash salary and statutory superannuation contributions.
2022
Mike Veverka
David Todd
Xavier Bergade
Brad Board
Richard Bateson
Duration of service agreement
Fixed remuneration as at end of FY20221
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
$800,000
$350,000
$350,000
$350,000
$463,750
The Board awarded the UK ELM acquisition in respect of the StarVale Group agreement that has been signed 27 January 2022 and is
only awaiting UK Gambling Commission approval in Q1 FY2023. The original application was submitted 21 March 2022, all requested
information has been provided, and we reasonably expect that this approval will be forthcoming. The Board has therefore exercised its
discretion and considered this an ‘achievement of target’. The Group’s Clawback Policy will apply should the transaction not proceed
for any reason.
4.3.2 Awards granted and forfeited in FY2022
The table below shows for each KMP, how much of their STI was awarded and how much was forfeited.
2022
Mike Veverka
David Todd
Xavier Bergade
Brad Board
Richard Bateson
Total Opportunity $
Awarded %
Forfeited %
400,000
175,000
175,000
175,000
175,000
80%
80%
80%
80%
80%
20%
20%
20%
20%
20%
4.3.3 Deferred short-term incentive component
50% of any STI for KMP will be awarded in performance rights to ordinary shares with the number of rights based on the 10-day VWAP
period up to 30 June of each year. The rights will vest and convert into shares after a 12-month time based qualifying period provided the
executive remains employed by the Group at the vesting date, unless otherwise determined by the Board. The sale of shares is
restricted for a further 12 months, resulting in a total two-year lock up period. Executives will have full entitlement to dividends and voting
rights during the 12-month lock-up period.
The PCC has recommended the grant of 11,134 FY22 STI rights to Mike Veverka subject to shareholder approval at the 2022 AGM and
19,484 FY22 STI rights to KMP subject to Director approval at a Board meeting on the 2022 AGM date.
4.4
Long-term incentive outcomes
1 Fixed remuneration includes base salary plus superannuation at 10.0%, except Richard Bateson who is subject to UK mandatory withholdings
The table below shows for each KMP, the value of rights that were granted in FY2022 as part of their TRO.
For FY2023, the PCC determined no changes would be made to the fixed remuneration for the executive KMP. It is noted that
superannuation increases to 10.5% from 1 July 2022. This increase in superannuation will not increase the fixed remuneration for
executives as fixed remuneration includes statutory superannuation contributions.
Richard Bateson receives some of his remuneration for services provided in the USA under a consulting agreement with his consulting
company in the USA and services provided elsewhere in the world under an employment agreement through Gatherwell.
4.3 Short-term incentive outcomes
The Group's performance in FY2022 aligned with expectations, delivering a 14% increase in underlying NPAT growth while achieving
some operational targets that support future growth. As a result of the performance, the Board awarded Executives 80% of their
respective maximum short-term incentives. Half of this incentive is payable in cash with the remaining portion payable in the form of
restricted rights. The FY2022 performance against key measures and the impact on variable remuneration are outlined below.
Metric
Target
Performance
STI
Underlying NPAT
6% to 20% and above increase
Group TTV
$650.0m with minimum $550.0m
Group EBITDA
$54.0m with minimum $48.0m
UK ELM acquisition Completed by 30 June 2022
14% increase
$659.9m
$54.0m
Signed 27 January 2022 – awaiting UK Gambling
Commission approval
Canada ELM
acquisition
Enter US market
Completed by 30 June 2022
Completed 1 June 2022
Complete acquisition of commercialise agreement by
30 June 2022
No acquisition or agreement
Achievement
of Target
70%
100%
100%
100%
100%
0%
2022
Mike Veverka
David Todd
Xavier Bergade
Brad Board
Richard Bateson
Total granted $
400,000
175,000
175,000
175,000
175,000
Executive KMP receive an annual grant of rights to a dollar value equivalent to 25% of their TRO, with the number of rights based on the
10-day VWAP period up to 30 June of each year. The rights are exercisable into shares three years after grant and achievement of the
price performance hurdle and provided the executive remains employed by the Group at the vesting date, unless otherwise determined
by the Board.
The value of LTI rights that were awarded or granted relating to the financial period ended 30 June 2022 are as follows:
Grant date
28 October 2021
28 October 2021
1FY2022 LTIs
Vesting date
1 July 20241
4 November 20232
Grant date value
$9.466
$10.296
2Special LTIs as a one-off recognition of effort in relation to the renegotiation of the TLC Agreement
68 Annual Report 2022
Annual Report 2022 69
Details of the terms and conditions of STI and LTI rights granted to key management personnel as compensation during the reporting
period are as follows:
FY2022
Directors
Susan Forrester
NED service rights
NED service rights
NED service rights
Sharon Christensen
NED service rights
NED service rights
NED service rights
Mike Veverka
LTI rights FY2022
STI rights FY2021
Other key management
personnel
David Todd
LTI rights FY2022
STI rights FY2021
Xavier Bergade
LTI rights FY2022
STI rights FY2021
Brad Board
LTI rights FY2022
STI rights FY2021
Richard Bateson
LTI rights FY2022
No. rights
granted
No. rights
vested
Fair value
per right at
grant date
Exercise price Amount paid
or payable
Expiry date
Date
exercisable
1,366
1,366
1,366
1,366
1,366
1,366
23,419
7,319
38,934
$15.701
$15.330
$14.967
$15.701
$15.330
$14.967
$9.466
$16.507
-
-
-
-
-
-
-
7,319
7,319
10,246
-
$9.466
3,202
3,202
$16.507
10,246
-
$9.466
3,202
3,202
$16.507
10,246
-
$9.466
3,202
3,202
$16.507
10,246
-
$9.466
50,590
9,606
89,524
16,925
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$18.30
1 Jul 2025
1 Jul 2022
$18.30
1 Jul 2026
1 Jul 2023
$18.30
1 Jul 2027
1 Jul 2024
$18.30
1 Jul 2025
1 Jul 2022
$18.30
1 Jul 2026
1 Jul 2023
$18.30
1 Jul 2027
1 Jul 2024
-
-
-
-
-
-
-
-
-
1 Jul 2025
1 Jul 2024
30 Jun 2022
30 Jun 2022
1 Jul 2025
1 Jul 2024
30 Jun 2022
30 Jun 2022
1 Jul 2025
1 Jul 2024
30 Jun 2022
30 Jun 2022
1 Jul 2025
1 Jul 2024
30 Jun 2022
30 Jun 2022
1 Jul 2025
1 Jul 2024
The NED service rights are granted for a consideration of $18.30 per right and have a time-bound vesting period only.
The LTI rights FY2022 are granted for no consideration, have a three-year term, and are exercisable when the 90-day
VWAP of the Jumbo share price for the period up to 30 June 2024 is equal to or more than $20.17 less any dividends
paid during the term.
The STI rights FY2021 are granted for no consideration, have a one-year term, and are exercisable after a further one-year
lock up period.
The weighted average fair value of rights granted during FY2022 was $10.92.
The value of LTI rights awarded or granted relating to previous financial periods, for which remuneration is reported in the financial
period ended 30 June 2022 are as follows:
FY2022
Directors
Mike Veverka
LTI rights FY2020
LTI rights FY2021
LTI rights TLC
Other key management
personnel
David Todd
LTI rights FY2020
LTI rights FY2021
LTI rights TLC
Xavier Bergade
LTI rights FY2020
LTI rights FY2021
LTI rights TLC
Brad Board
LTI rights FY2020
LTI rights FY2021
LTI rights TLC
No. rights
granted
No. rights
vested
Fair value
per right at
grant date
Exercise
price
Amount paid
or payable
Expiry date
Date
exercisable
20,202
40,201
16,393
76,796
8,838
17,588
8,197
8,838
17,588
8,197
8,838
17,588
8,197
103,869
$17.513
$6.254
$7.565
$17.513
$6.254
$7.565
$17.513
$6.254
$7.565
$17.513
$6.254
$7.565
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Jul 2023
1 Jul 2022
1 Jul 20234
1 Jul 20223
4 Nov 2023 4 Nov 2023
1 Jul 2023
1 Jul 2022
1 Jul 2024
1 Jul 2023
4 Nov 2023 4 Nov 2023
1 Jul 2023
1 Jul 2022
1 Jul 2024
1 Jul 2023
4 Nov 2023 4 Nov 2023
1 Jul 2023
1 Jul 2022
1 Jul 2024
1 Jul 2023
4 Nov 2023 4 Nov 2023
The NED service rights are granted for a consideration of $18.30 per right and have a time-bound vesting period only.
The LTI rights FY2020 are granted for no consideration, have a three-year term, and are exercisable when the 90-day VWAP of the
Jumbo share price for the period up to 30 June 2022 is equal to or more than $24.98 less any dividends paid during the term.
The LTI rights FY2021 are granted for no consideration, have a three-year term, and are exercisable when the 90-day VWAP of the
Jumbo share price for the period up to 30 June 2023 is equal to or more than $14.55 less any dividends paid during the term.
The LTI rights TLC are special LTIs as a one-off recognition of effort in relation to the renegotiation of the TLC Agreement granted for
no consideration, have a three-year term, and are exercisable when the 90-day VWAP of the Jumbo share price for the period up to 4
November 2023 is equal to or more than $16.24.
The LTI rights FY2022 are granted for no consideration, have a three-year term, and are exercisable when the 90-day VWAP of the
Jumbo share price for the period up to 30 June 2023 is equal to or more than $20.17 less any dividends paid during the term.
4.4.1 Options
There were no options granted to executive KMP during the reporting period.
4.4.2 Equity instruments issued on exercise of remuneration rights and options
The following equity instruments were issued during the reporting period to key management personnel as a result of rights and options
exercised that had previously been granted as compensation.
FY2022
Directors
Number of shares issued on
Number of rights and
Amount paid per share
Amount unpaid per
exercise of rights and options
options exercised
Mike Veverka - rights
17,369
17,369
-
share
-
70 Annual Report 2022
Annual Report 2022 71
FY2022
Number of shares issued on
Number of rights and
Amount paid per share
Amount unpaid per
FY2022
exercise of rights and options
options exercised
share
Other key management
personnel
David Todd - rights
Xavier Bergade - rights
Xavier Bergade – options
Brad Board - rights
17,369
17,369
7,599
7,599
300,000
7,599
322,797
7,599
7,599
300,000
7,599
322,797
-
-
$3.50
-
-
-
-
4.4.3 Value of rights to key management personnel
Details of options and rights that were granted and that are exercised during the year to key management personnel as part of their
remuneration are as follows:
FY2022
Value of options or rights at grant date1
Value of options or rights exercised
Directors
Mike Veverka - rights
Other key management personnel
David Todd - rights
Xavier Bergade - rights
Xavier Bergade - options
Brad Board - rights
$
245,497
107,406
107,406
100,350
107,406
at exercise date2
$
269,499
117,907
117,907
4,890,000
117,907
1 The value of options and rights granted during the period differs to the expense recognised as part of each key management persons' remuneration in (c) above because this value
is the grant date fair value calculated in accordance with AASB 2 Share-based Payment.
2 The value of options exercised at exercise date has been determined as the intrinsic value of the options at exercise date, i.e., the excess of the market value at exercise date over
the strike price of the option.
Key management personnel include close family members and entities over which the key management person or their close family
members have direct or indirect control, joint control or significant influence.
Details of options and rights over ordinary shares of Jumbo Interactive Limited, held indirectly or beneficially by key management
personnel are as follows:
Options
FY2022
Balance at
1 July 2021
Granted as
remuneration
during the year
Exercised
during the
year
Xavier Bergade
600,000
600,000
-
-
(300,000)
(300,000)
Rights to deferred shares
Other
changes
during the
year
-
-
Balance at
30 June
2022
Vested at
30 June
2022
Total vested
and
exercisable at
30 June 2022
Total vested
and
unexercisable
at 30 June 2022
300,000
300,000
300,000
300,000
300,000
300,000
-
-
FY2022
Balance at
1 July 2021
Granted as
remuneration
during the year
Exercised
during the
year
Other
changes
during the
year
Balance at
30 June
2022
Vested at
30 June
2022
Total vested
and
exercisable at
30 June 2022
Total vested
and
unexercisable
at 30 June 2022
Susan
Forrester
Sharon
Christensen
-
-
4,098
4,098
-
-
-
-
4,098
4,098
-
-
-
-
-
-
Balance at
1 July 2021
Granted as
remuneration
during the year
Exercised
during the
year
Other
changes
during the
year
Balance at
30 June
2022
Vested at
30 June
2022
Total vested
and
exercisable at
30 June 2022
Total vested
and
unexercisable
at 30 June 2022
Mike Veverka
David Todd
Xavier Bergade
Brad Board
Richard
Bateson
86,846
30,738
(17,369)
39,020
39,020
39,020
13,448
(7,599)
13,448
(7,599)
13,448
(7,599)
-
10,246
-
203,906
89,524
(40,166)
-
-
-
-
-
-
100,215
44,869
44,869
44,869
10,246
253,264
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5. Total Executive remuneration and benefits
2022
Short term employee benefits
Post-
employment
benefits
Long term benefits
Equity-settled
share-based
payments
Cash
salary, fees
and annual
leave
$
Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Long
service
leave
$
Termination
benefits
$
Options and
Rights1
$
Total
$
Proportion of
remuneration
that is
performance
based
%
Mike Veverka
821,486
160,000
David Todd
346,569
70,000
Xavier Bergade
342,325
70,000
Brad Board
342,540
70,000
Richard
Bateson2
Total Executive
remuneration
463,750
70,000
2,316,670 440,000
-
-
-
-
-
-
33,566
12,115
27,500
5,300
31,818
4,077
31,818
5,300
-
-
124,702
26,792
-
-
-
-
-
-
491,817
1,518,984
212,136
661,505
212,136
660,356
212,136
661,794
42.9
42.7
42.7
42.6
102,330
636,080
27.1
1,230,555
4,138,719
40.4
1 includes share-based payments over the remaining term on those options and rights exercised, if any, during the financial year
2 included in KMP from 1 July 2021
2021
Short term employee benefits
Cash
salary, fees
and annual
leave
$
Cash
bonus
$
Non-
monetary
benefits
$
Post-
employment
benefits
Super-
annuation
$
Long term benefits
Equity-settled
share-based
payments
Long
service
leave
$
Termination
benefits
$
Options and
Rights1
$
Total
$
Proportion of
remuneration
that is
performance
based
%
Mike Veverka
834,373
125,000
David Todd
350,969
54,688
Xavier Bergade
344,421
54,688
Brad Board
369,037
54,688
Total Executive
remuneration
1,898,800
289,064
-
-
-
-
-
25,000
25,000
11,081
5,279
31,533
12,562
28,030
5,163
109,563
34,085
-
-
-
-
-
394,928
1,390,382
174,208
610,144
202,168
645,372
174,208
631,126
37.4
37.5
39.8
36.3
945,512 3,277,024
37.7
1 includes share-based payments over the remaining term on those options and rights exercised, if any, during the financial year
72 Annual Report 2022
Annual Report 2022 73
6. Non-Executive Director Remuneration
6.2 Total Non-Executive remuneration and benefits
Jumbo is committed to ensuring that the composition of the Board includes Directors who possess an appropriate mix of skills,
experience, expertise, and diversity to enable the Board to support the Group to deliver on outcomes aligned with our strategic
priorities. Our strong corporate governance framework underpins the Board’s strategic objectives and commitment to shareholders
and the community.
The size and composition of the Board is determined in accordance with the Company’s Constitution and any applicable laws and
regulations and comprises four members, including the CEO, Chairperson and two independent, Non-Executive Directors. In addition,
the Board has extensive access to members of senior management who regularly attend Board meetings. Management makes
presentations and engage in discussions with Directors, answer questions and provide input and perspective on their areas of
responsibility. The Chief Financial Officer (CFO) attends all Board meetings.
6.1 Non-Executive Director fees
Non-Executive Directors receive a board fee and fees for chairing or participating on board committees per the table below. They do
not receive performance-based pay or retirement allowances but may acquire rights as a salary sacrifice under a Non-Executive
Director Rights Plan. The fees are inclusive of superannuation.
2022
Short term employee benefits
Cash
salary, fees
and annual
leave
$
Cash
bonus
$
Non-
monetary
benefits
$
Post-
employment
benefits
Super-
annuation
$
Long term benefits
Equity-settled
share-based
payments
Termination
benefits
$
Options and
Rights
$
Total
$
Long
service
leave
$
Susan Forrester
194,167
Sharon
Christensen
121,591
Giovanni Rizzo
136,364
Total Non-
Executive
remuneration
452,122
-
-
-
-
-
-
-
-
19,417
3,409
13,636
36,462
-
-
-
-
-
-
-
-
19,416 233,000
25,000
150,000
-
150,000
44,416 533,000
1 July 2020 to
31 March 2021
1 April 2021 to
30 June 2021
2021
Short term employee benefits
Proportion of
remuneration
that is
performance
based
%
-
-
-
-
Proportion of
remuneration
that is
performance
based
%
-
-
-
-
-
-
-
Post-
employment
benefits
Super-
annuation
$
Long term benefits
Equity-settled
share-based
payments
Long
service
leave
$
Termination
benefits
$
Options and
Rights
$
Total
$
Cash
salary, fees
and annual
leave
$
Cash
bonus
$
Non-
monetary
benefits
$
Susan Forrester1
161,125
Sharon
Christensen
122,955
Giovanni Rizzo
119,863
David Barwick2
Bill Lyne3
Bill Lyne – as
Company
Secretary4
Total Non-
Executive
remuneration
63,318
84,475
28,259
579,995
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,307
795
11,387
6,015
8,025
-
41,529
1 Appointed 7 September 2020
2 Ceased 29 October 2020
3 Ceased 31 March 2021
4 Ceased 1 January 2021
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
176,432
123,750
131,250
69,333
92,500
-
28,259
-
621,524
Board and Committee fees (per
annum)
Chair of the Board
Non-Executive Directors
Committee Chair (Audit and Risk)
Committee Chair (People and
Culture)
Committee Member (Audit and Risk)
Committee Member (People and
Culture)
FY2022
$213,000
$125,000
$15,000
$15,000
$10,000
$10,000
$188,000
$100,000
$15,000
$15,000
$10,000
$10,000
$213,000
$125,000
$15,000
$15,000
$10,000
$10,000
In addition to Board and Committee fees, non-executive Directors are reimbursed for travel and other expenses reasonably incurred
when attending meetings of the Board or conducting the business of the Company. A minimum shareholding requirement (MSR)
applies to non-executive Directors comprising holding fully paid ordinary shares in the Company to the value of 100% of annual board
fees within five years of falling under the remuneration framework or appointment.
74 Annual Report 2022
Annual Report 2022 75
7. KMP shareholdings
FY2022
Balance at 1 July 2021
Granted as
remuneration during
the year
Issued on exercise of
options or rights
during the year
Other changes
during the year
Balance at
30 June 2022
Directors
Mike Veverka
Susan Forrester
Sharon Christensen
Giovanni Rizzo
Other key management personnel
David Todd
Xavier Bergade
Brad Board
Richard Bateson
9,515,729
20,000
3,550
2,000
50,000
150,000
10,000
-
9,751,279
End of remuneration report - audited
-
-
-
-
-
-
-
-
-
17,369
(676,197)
8,856,901
-
-
-
7,599
307,599
7,599
-
10,000
-
-
-
-
15,628
10,246
30,000
3,550
2,000
57,599
457,599
33,227
10,246
340,166
(640,323)
9,451,122
76 Annual Report 2022
Annual Report 2022 77
Financial Report
Contents
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
RESULTS FOR THE YEAR
Note 1: Segment reporting
Note 2: Revenue and other income
Note 3: Expenses
Note 4: Income tax
Note 5: Earnings per share (EPS)
OPERATING ASSETS AND LIABILITIES
Note 6: Cash and cash equivalents
Note 7: Trade and other receivables
Note 8: Property, plant and equipment
Note 9: Intangible assets
Note 10: Right-of-use assets
Note 11: Trade and other payables
Note 12: Employee benefit obligations
Note 13: Lease liabilities
CAPITAL AND FINANCIAL RISK MANAGEMENT
Note 14: Capital risk management
Note 15: Dividends
Note 16: Equity and reserves
Note 17: Borrowings
Note 18: Financial risk management
GROUP STRUCTURE
Note 19: Business combination
Note 20: Controlled subsidiaries
Note 21: Parent disclosures
OTHER INFORMATION
Note 22: Investments accounted for using the Equity Method
Note 23: Financial assets at fair value through other comprehensive income (FVOCI)
Note 24: Related party transactions
Note 25: Key Management Personnel compensation
Note 26: Share-based payments
Note 27: Remuneration of auditor
Note 28: Summary of other significant accounting policies
UNRECOGNISED ITEMS
Note 29: Contingencies
Note 30: Contingent Commitments
Note 31: Events after the reporting date
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
77
78
79
80
81
83
83
87
89
90
92
93
93
94
95
97
104
105
106
107
108
108
109
110
111
112
117
117
119
120
122
122
123
123
124
124
128
128
131
131
131
131
132
133
Jumbo Interactive Limited and its Controlled Subsidiaries
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the year ended 30 June 2022
Revenue from operations
Cost of sales
Gross profit
Other revenue/income
Distribution expenses
Marketing costs
Occupancy expenses
Administrative expenses
Fair value movement on financial liabilities
Finance costs
Impairment of receivables
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year attributable to the owners of
Jumbo Interactive Limited
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Notes
2
3
2
3
3
18(d)
3
4
2022
$’000
104,251
(14,473)
89,778
1,058
(20)
(8,597)
(146)
2021
$’000
83,319
(8,339)
74,980
570
(20)
(5,698)
(93)
(36,457)
(30,306)
-
(303)
(76)
45,237
(14,061)
(177)
(202)
-
39,054
(12,095)
31,176
26,959
(775)
(775)
249
249
Total comprehensive income for the year attributable to the owners of Jumbo Interactive Limited
30,401
27,208
Earnings Per Share (cents per share)
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
cents
49.9
49.3
5
5
cents
43.2
42.8
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
78 Annual Report 2022
Annual Report 2022 79
Jumbo Interactive Limited and its Controlled Subsidiaries
Jumbo Interactive Limited and its Controlled Subsidiaries
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
As at 30 June 2022
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Right-of-use assets
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Current tax liabilities
Contingent consideration at fair value
Employee benefit obligations
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities
Employee benefit obligations
Make good provision
Contingent consideration at fair value
Deferred tax liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Profits Appropriation Reserve
Reserves
TOTAL EQUITY
Notes
6
7
18(d)
8
9
10
4
11
13
4
19(b)
12
13
12
19(b)
4
2022
$’000
68,930
6,065
31
-
2021
$’000
63,139
3,557
16
1,807
75,026
68,519
695
396
50,805
39,480
2,864
1,828
56,192
131,218
3,831
1,547
45,254
113,773
24,530
19,296
1,022
613
1,820
818
1,013
433
1,807
699
28,803
23,248
2,181
525
22
1,638
5,066
9,432
3,120
605
22
-
1,452
5,199
38,235
28,447
92,983
85,326
16
81,390
80,177
9,610
1,983
3,730
1,419
92,983
85,326
For the year ended 30 June 2022
Consolidated group
Contributed
equity
$’000
Profits
appropriation
reserve
$’000
Share-based
payments
reserve
$’000
Foreign currency
translation
reserve
$’000
Total equity
$’000
Financial assets at
fair value through
other
comprehensive
income reserve
$’000
Balance at 1 July 2020
80,089
(1,372)
3,259
(755)
(2,302)
78,919
Total comprehensive
income for the year
Profit for the year
Other comprehensive income,
net of tax
Total comprehensive income
for the year
Transactions with owners in
their capacity as owners
Issue of shares (Note 16(a))
Dividends paid (Note 15)
Share-based payments
(Note 26)
Total transactions with owners
in their capacity as owners
Balance at
30 June 2021
Balance at 1 July 2021
Total comprehensive income
for the year
Profit for the year
Other comprehensive income,
net of tax
Total comprehensive income
for the year
Transactions with owners in
their capacity as owners
Issue of shares (Note 16(a))
Dividends paid (Note 15)
Share-based payments
(Note 26)
Total transactions with owners
in their capacity as owners
Balance at
30 June 2022
-
-
-
88
-
-
26,959
-
26,959
-
(21,857)
-
88
(21,857)
3,730
3,730
31,176
-
31,176
-
(25,296)
80,177
80,177
-
-
-
1,213
-
-
-
-
-
-
-
968
968
4,227
4,227
-
-
-
-
-
-
249
249
-
-
-
-
(506)
(506)
-
(775)
(775)
-
-
-
-
-
-
-
-
-
-
-
(2,302)
(2,302)
-
-
-
-
-
-
-
26,959
249
27,208
88
(21,857)
968
(20,801)
85,326
85,326
31,176
(775)
30,401
1,213
(25,296)
1,339
(22,744)
-
1,339
1,213
(25,296)
1,339
81,390
9,610
5,566
(1,281)
(2,302)
92,983
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes
80 Annual Report 2022
Annual Report 2022 81
Jumbo Interactive Limited and its Controlled Subsidiaries.
Jumbo Interactive Limited and its Subsidiaries
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (GST inclusive)
Payments to suppliers and employees (GST inclusive)
Interest received
Interest and other costs of finance paid
Interest on lease liabilities
Income tax paid
Net cash inflows from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Payment for The Lottery Corporation extension fee intangible asset
Payments for other intangibles
Payment for purchase of business net of cash acquired
Proceeds from sale of subsidiary net of cash provided
Proceeds from sale of assets
Net cash (outflows) from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Payment of lease liabilities
Dividends paid
Net cash (outflows) from financing activities
Net (decrease) in cash and cash equivalents
Net foreign exchange differences
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Notes
2022
$’000
2021
$’000
113,644
93,582
(56,026)
(46,378)
63
(174)
(129)
185
(35)
(167)
(13,185)
(12,071)
6(b)
44,193
35,116
8
9(a)
9(a)
19
8
16
15
(326)
(96)
-
(15,000)
(5,715)
(7,955)
691
4
(6,408)
-
-
14
(13,301)
(21,490)
1,213
(1,017)
88
(978)
(25,296)
(21,857)
(25,100)
(22,747)
5,792
(9,121)
(1)
1
63,139
72,259
For the year ended 30 June 2022
About this report
Jumbo Interactive Limited is a company limited by shares, incorporated and domiciled in Australia, whose shares are publicly traded on
the Australian Securities Exchange (ASX: JIN), and is a for-profit entity for the purposes of preparing the financial statements. The
consolidated financial statements are for the consolidated entity consisting of Jumbo Interactive Limited (the Company) and its
subsidiaries and together are referred to as the Group or Jumbo.
The consolidated financial statements were approved for issue in accordance with a resolution by the Directors on 26 August 2022.
The Directors have the power to amend and reissue the consolidated financial statements.
The consolidated financial statements are general purpose financial statements which:
•
•
•
•
•
have been prepared in accordance with the Corporations Act 2001, Australian Accountings Standards and Interpretations issued
by the Australian Accounting Standards Board (AASB) and International Financial reporting Standards (IFRS) issued by the
International Financial Standards Board;
have been prepared under the historical cost convention;
are presented in Australian dollars (A$), with all amounts in the financial report being rounded off in accordance with the
requirements of ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 issued by the Australian
Securities and Investments Commission to the nearest thousand dollars, unless otherwise indicated;
where necessary, comparative information has been restated to conform with changes in presentation in the current year; and
adopts all new and amended Accounting Standards and Interpretations issued by the AASB that are relevant to the operations of
the Group effective for reporting periods beginning on or after 1 July 2021.
The notes to the financial statements
The notes include financial information which is required to understand the consolidated financial statements and is material and
relevant to the operations, financial position and performance of the Group. Information is considered material and relevant if, for
example:
•
•
•
•
the amount in question is significant because of its size or nature;
it is important for understanding the results of the Group;
it helps explain the impact of significant changes in the Group’s business – for example, acquisitions and impairment write downs;
and
it relates to an aspect of the Group’s operations that is important to its future performance.
6(a)
68,930
63,139
Significant and other accounting policies that summarise the measurement basis used and are relevant to an understanding of the
financial statements are provided throughout the notes of the financial statements.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
82 Annual Report 2022
Annual Report 2022 83
Significant judgements and estimates
In the process of applying the Group’s accounting policies, management has made a number of judgements and applied estimates of
future events. Judgements and estimates which are material to the consolidated financial statements include:
Estimated useful life of website development costs
Goodwill and other intangible assets
Lease liabilities
Contingent consideration at fair value
Note
9
9
13
18(d)
Page
97
97
107
115
In addition, in preparing the financial statements, the notes to the financial statements were ordered such that the most relevant
information was presented earlier in the notes and that the disclosures that management deemed to be immaterial were
excluded from the notes to the financial statements. The determination of the relevance and materiality of disclosures involved
significant judgement.
Key events and transactions for the reporting period
The financial position and performance of the Group was affected by the following events and transactions during the reporting period:
1.
Increased levels of customer activity and large jackpot activity.
2. The acquisition of Stride Management Corp. Canada for cash on 1 June 2022 (see Note 19: Business Combination for details).
3. Payment of dividends (see Note 15: Dividends for details).
4. Sale of wholly owned subsidiary Intellitron Pty Ltd
RESULTS FOR THE YEAR
In this section
Results for the year include segment information and a breakdown of individual line items in the Consolidated Statement of Profit or
Loss and Other Comprehensive Income that the Directors consider most relevant, including a summary of the accounting policies,
relevant to understanding these line items.
RESULTS FOR THE YEAR
Note 1: Segment reporting
Note 2: Revenue and other income
Note 3: Expenses
Note 4: Income tax
Note 5: Earnings per share (EPS)
Note 1: Segment reporting
83
83
87
89
90
92
Jumbo determines and presents operating segments on a product and a geographic basis as this is how the results are reported
internally to the Chief Executive Officer (being the chief operating decision maker) and how the business is managed. The Chief
Executive Officer assesses the performance of the Group based on the earnings before interest, tax, and depreciation and amortisation
(EBITDA) amongst other key metrics and key performance indicators.
(a) Description of segments
The following summary describes the operations in each of the Group’s reportable segments:
Lottery Retailing
Sales of Australian national lottery and charity lottery tickets through the internet and mobile devices to customers (B2C) in Australia
and eligible overseas jurisdictions.
Software-as-a-Service (SaaS)
Development, supply and maintenance of proprietary software-as-a-service (SaaS) for authorised businesses, charities and
governments (B2B/B2G) mainly in the lottery market on an international basis.
Managed Services
Provision of SaaS related services for authorised businesses and charities (B2B) in the lottery market on an international basis. This
includes Gatherwell UK, a ‘lottery-in-a-box’ providing lottery management services using a proprietary lottery software platform to
society lotteries in the UK and Stride Canada providing lottery project management services using its proprietary lottery software
platform and digital payment solutions to charities in Canada.
Intersegment eliminations
The SaaS segment licences the lottery software platform to the Lottery Retailing segment on a licence fee of 7.5% of lottery ticket sales.
Expenses
Direct costs are included in expenses of operating segments and indirect costs are allocated to operating segments based on the
headcount assigned to each operating segment.
Reconciling items
Other reconciling items are corporate expenses including costs in respect of the Directors, CEO, CFO, corporate advertising,
promotion and marketing, corporate investment and finance, tax, audit, risk, governance, and strategic projects.
84 Annual Report 2022
Annual Report 2022 85
(b) Segment information
The segment information provided to the CEO is as follows:
Lottery Retailing
$’000
SaaS
$’000
Managed
Services
$'000
Intersegment
eliminations
$'000
Total
$'000
91,098
8,318
4,835
-
104,251
-
34,390
-
(34,390)
-
91,098
42,708
4,835
(34,390)
104,251
34,390
(14,473)
2021
2022
Total segment sales revenue from external
customers
Intersegment sales revenue
Total segment sales revenue
Cost of Sales
Gross Profit
Finance costs
Employee benefits expense
Directors’ remuneration
Consultancy and legal expenses
Marketing expenses
Corporate expenses
Technology expenses
Office expenses
Other expenses
Operating expenses
EBITDA
Reconciliation to Statutory Consolidated
results
Total segments revenue
Consolidated Revenue (see Note 2)
Total segment EBITDA
Other reconciling items (Corporate)
Finance costs
Employee benefits expense
Share-based payments
Directors’ remuneration
Consultancy and legal expenses
Marketing expenses
Corporate expenses
Technology expenses
Other expenses
Total other reconciling items
Consolidated operating profit
Other revenue
Consolidated EBITDA
Depreciation and amortisation
(48,002)
43,096
-
(317)
42,391
-
(544)
4,291
(10)
(2,937)
(9,427)
(2,230)
(7)
(20)
(7,850)
(1)
(163)
(128)
(1,878)
-
(112)
(463)
(1)
(1,369)
(210)
(1,865)
-
(16)
(252)
(151)
(148)
(131)
(509)
(12,984)
(13,447)
(3,447)
30,112
28,944
844
-
-
-
-
-
-
-
-
-
-
-
-
89,778
(10)
(14,594)
(7)
(148)
(8,565)
(153)
(1,680)
(469)
(4,252)
(29,878)
59,900
104,251
104,251
59,900
(164)
(1,263)
(1,339)
(483)
(1,210)
(32)
(571)
(28)
(1,760)
(6,850)
53,050
995
54,045
(8,742)
2022
Consolidated EBIT
Net interest - revenue
Consolidated Net profit before tax
Income tax expense
Consolidated Net profit after tax
(see Profit or Loss)
Lottery Retailing
$’000
SaaS
$’000
Managed
Services
$'000
Intersegment
eliminations
$'000
Lottery Retailing
$’000
SaaS
$’000
Managed
Services
$'000
Intersegment
eliminations
$'000
Total
$'000
45,303
(66)
45,237
(14,061)
31,176
Total
$'000
75,083
4,938
3,298
-
83,319
Total segment sales revenue from external
customers
Intersegment sales revenue
Total segment sales revenue
Cost of Sales
Gross Profit
Finance costs
-
75,083
(34,974)
40,109
-
27,122
32,060
(134)
31,926
-
Employee benefits expense
(2,843)
(6,455)
(8)
(50)
(5,364)
(1)
(114)
(139)
(1,210)
(9,729)
30,380
-
(528)
(247)
-
(1,407)
(188)
(1,147)
(9,972)
21,954
Directors’ remuneration
Consultancy and legal expenses
Marketing expenses
Corporate expenses
Technology expenses
Office expenses
Other expenses
Operating expenses
EBITDA
Reconciliation to Statutory Consolidated
results
Total segments revenue
Consolidated Revenue (see Note 2)
Total segment EBITDA
Other reconciling items (Corporate)
Finance costs
Employee benefits expense
Share-based payments
Directors’ remuneration
Consultancy and legal expenses
Marketing expenses
Corporate expenses
Other expenses
Fair value movement on financial liabilities
Total other reconciling items
-
(27,122)
3,298
(353)
2,945
(11)
(1,487)
-
(35)
(75)
(62)
(97)
(54)
(210)
(2,031)
914
(27,122)
27,122
-
-
-
-
-
-
-
-
-
-
-
-
-
83,319
(8,339)
74,980
(11)
(10,785)
(8)
(613)
(5,686)
(63)
(1,618)
(381)
(2,567)
(21,732)
53,248
83,319
83,319
53,248
(24)
(1,270)
(968)
(593)
(1,531)
(13)
(571)
(1,211)
(177)
(6,358)
86 Annual Report 2022
Annual Report 2022 87
2021
Consolidated operating profit
Other revenue
Consolidated EBITDA
Depreciation and amortisation
Consolidated EBIT
Net interest - revenue
Consolidated Net profit before tax
Income tax expense
Consolidated Net profit after tax
(see Profit or Loss)
Lottery Retailing
$’000
SaaS
$’000
Managed
Services
$'000
Intersegment
eliminations
$'000
Total
$'000
46,890
386
47,276
(8,239)
39,037
17
39,054
(12,095)
26,959
(c) Other segment information
Geographical information
The Company is domiciled in Australia. Segment revenues are allocated based on the country in which the customer is located.
Total revenue and other income from external customers
Australia (domicile)
United Kingdom
Canada
Fiji
Other
Consolidated Group
2022
$’000
95,650
4,159
618
940
3,942
2021
$’000
76,049
3,265
-
1,016
3,559
105,309
83,889
Non-current assets in Australia are $33,455,000 (2021: $43,701,000). Non-current assets in other countries are (i) United Kingdom
$7,156,000 (2021: $7,897,000), (ii) Canada $13,749,000 (2021: n/a) and (iii) Fiji $4,000 (2021: $2,000). Non-current assets exclude
financial instruments and deferred tax assets.
The geographical non-current assets above are exclusive of, where applicable, financial instruments, deferred tax assets, post-
employment benefits assets, and rights under insurance contracts.
No single external customer derives more than 10% of total revenues.
Note 2: Revenue and other income
The Group reports revenue from the sale of lottery tickets and related services on a net revenue inflow basis where it considers that it
acts more as an Agent than as a Principal such as with the sale of lottery tickets. The gross amount received for the sale of goods and
rendering of services is advised as Total Transaction Value (“TTV”) for information purposes.
Sales revenue
– Revenue from sale of goods1
– Revenue from rendering of services1
Total sales revenue
Other revenue/income
– Interest
Other income
– Foreign exchange gains
- Profit on disposal of entity2
– Other
Total other revenue/income
Consolidated Group
2022
$’000
1,514
102,737
104,251
63
457
525
13
1,058
2021
$’000
1,637
81,682
83,319
185
264
-
121
570
105,309
83,889
1the Consolidated Entity derives revenue from the transfer of goods and services at a point-in-time.
2Wholly owned subsidiary Intellitron Pty Ltd was sold on 30 June 2022.
Disaggregation of revenue from contracts with customers
In the following table, revenue from contracts with customers is disaggregated by main geographic markets, customer type and main
products and services. The table includes a reconciliation of the disaggregated revenue with the Group’s reportable segments.
2022
Lottery Retailing
$’000
Main geographic markets
Australia (domicile)
United Kingdom
Canada
Fiji
Other
Customer type
B2C
B2B
B2G
Main products and services
Draw lottery games
Charity lottery games
Instant win games
Software licencing fees
Lottery management services
Miscellaneous
Other revenue/income
External revenue and other income as
reported in Note 2 above
SaaS
$’000
42,618
90
-
-
-
Managed
Services
$'000
Intersegment
Eliminations
$'000
Total
$'000
148
4,069
618
-
-
(34,390)
94,593
-
-
-
-
4,159
618
940
3,941
86,217
-
-
940
3,941
91,098
42,708
4,835
(34,390)
104,251
91,098
-
-
91,098
85,513
2,979
701
-
-
1,905
91,098
-
39,415
3,293
42,708
-
-
-
42,708
-
-
42,708
-
4,835
-
4,835
-
-
-
-
4,835
-
4,835
-
(34,390)
-
91,098
9,860
3,293
(34,390)
104,251
-
-
-
(34,390)
-
-
(34,390)
85,513
2,979
701
8,318
4,835
1,905
104,251
1,058
105,309
88 Annual Report 2022
Annual Report 2022 89
2021
Main geographic markets
Australia (domicile)
United Kingdom
Fiji
Other
Customer type
B2C
B2B
B2G
Main products and services
Draw lottery games
Charity lottery games
Instant win games
Software licencing fees
Lottery management services
Miscellaneous
Other revenue/income
External revenue and other income as
reported in Note 2 above
Recognition and measurement
Lottery Retailing
$’000
SaaS
$’000
Managed
Services
$'000
Intersegment
Eliminations
$'000
70,508
32,060
-
1,016
3,559
-
-
-
33
3,265
-
-
(27,122)
-
-
-
75,083
32,060
3,298
(27,122)
75,083
-
-
75,083
68,153
3,088
755
-
-
3,087
75,083
-
30,648
1,412
32,060
-
-
-
32,060
-
-
32,060
-
3,298
-
3,298
-
-
-
-
3,298
-
3,298
-
(27,122)
-
(27,122)
-
-
-
(27,122)
-
-
(27,122)
Total
$'000
75,479
3,265
1,016
3,559
83,319
75,083
6,824
1,412
83,319
68,153
3,088
755
4,938
3,298
3,087
83,319
570
83,889
The following specific recognition criteria must also be met before revenue is recognised:
Sale of Goods and/or Rendering of Services
Revenue from sale of goods and/or rendering of services is recognised when control of the goods or services is transferred to the
buyer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for these goods and/or
services. Control is the ability of the customer to direct the use of, and obtain substantially all of the remaining benefits from, an asset.
Indicators that control has passed includes that the customer has (i) a present obligation to pay, (ii) physical possession of the asset(s),
(iii) legal title, (iv) risk and rewards of ownership, and (v) accepted the asset(s).
Lottery Retailing revenue includes agent commission received from The Lottery Corporation and administration fees received from
customers at the time an entry is purchased by the customer in Draw Lottery Games, Charity Lottery Games and Instant Win Games.
Revenue is derived at a point-In-time with payment terms of 7 days and immediately.
SaaS revenue includes the development, supply and maintenance of proprietary software-as-a-service (SaaS) for authorised
Business, Charity and Government lotteries and is recognised as the software licence fee received from customers once the service
has been rendered. Revenue is derived at a point-in-time with payment terms of 14 days after invoice date.
Managed services revenue is recognised as the commission or service fee received from customers when the official draw for each
lottery is completed or once the service has been rendered, including the provision of SaaS-related services in the lottery market on an
international basis. This includes Gatherwell UK using their proprietary lottery software platform to provide ‘lottery-in-a-box' lottery
management services to society lotteries in the UK and Stride Canada using their proprietary lottery software platform and digital
payments solution to provide lottery project management services to charities in Canada. Revenue is derived at a point-in-time with
payment terms of between date of invoice to 14 days after invoice date.
Interest
Revenue is recognised as interest accrues using the effective interest method. The effective interest method uses the effective interest
rate which is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial asset.
Profit on disposal of entity
Revenue is recognised at the time of Completion as the sale proceeds received less that net assets disposed.
Note 3: Expenses
Profit before income tax includes the following specific expenses:
Cost of sales
– Sale of goods
– Rendering of services
Total cost of sales
Administration expenses
Depreciation of non-current assets
– Plant and equipment
Amortisation of non-current assets
– Leasehold improvements
– Intangibles
– Right-of-use assets
Total depreciation and amortisation
Other administration expenses
– Employee benefit expense
- Share-based payments expense
– Defined contribution superannuation expense
– Other administration expenses
Total administrative expenses
Finance costs
Interest expense on lease liabilities
Interest and other costs of finance
Finance costs expensed
Occupancy expenses
– Short-term lease rentals minimum lease payments
Fair value movement on financial liabilities
Consolidated Group
2022
$’000
2021
$’000
789
13,684
14,473
536
7,803
8,339
178
135
37
7,474
1,053
8,742
36
6,986
1,082
8,239
14,277
10,647
1,339
1,580
10,519
968
1,409
9,043
36,457
30,306
129
174
303
146
-
167
35
202
93
177
90 Annual Report 2022
Annual Report 2022 91
Note 4: Income tax
Current tax
Current
Income tax liability
(a) Income tax expense
The components of tax expense comprise:
– Current tax
– Deferred tax
– Underprovision of tax in prior years
– Current tax relating to overseas operations
Total income tax expense in profit or loss
Reconciliation
Profit before income tax expense
– Tax at the Australian tax rate 30% (2021:30%)
– Income tax effect of overseas tax rates
– Share options expensed during year
– Other
Total income tax expense in profit or loss
Note
4(b)
Consolidated
2022
$’000
613
2021
$’000
433
Consolidated
2022
$’000
2021
$’000
12,805
11,049
971
55
230
825
1
220
14,061
12,095
45,237
13,571
(116)
402
204
39,054
11,716
(143)
290
232
14,061
12,095
Opening
balance
$’000
Charged to
Profit or Loss
$’000
Charged
directly to
equity
Adjustment on
acquisition1
Foreign
exchange
differences
$’000
$’000
$’000
Closing balance
$’000
282
62
-
344
1,122
(14)
-
1,108
1,404
1,251
48
-
1
-
-
-
-
-
-
-
2
2
-
-
-
-
-
-
2,348
2,348
-
-
-
-
-
-
12
12
1,404
48
-
1,452
2,655
49
2,362
5,066
Balance as at 30 June 2022
1,452
1,252
1See Note 19: Business Combination for details
(b) Deferred tax
Deferred tax liabilities (DTL)
Deferred tax liabilities comprise
temporary difference
recognised in the profit or loss
as follows:
Intangible assets
– Amortisation
Accruals
Other
Balance at 30 June 2021
Intangible assets
– Amortisation
Accruals
Other
Deferred tax assets (DTA)
Opening balance
$’000
Charged to Profit or Loss
$’000
Closing balance
$’000
Deferred tax assets comprise temporary difference
recognised in the profit or loss as follows:
Property, plant and equipment
– Depreciation
– Amortisation
Accruals
Provisions
Other
Balance at 30 June 2021
Property, plant and equipment
– Depreciation
Accruals
Provision
Other
Balance as at 30 June 2022
Recognition and measurement
Current taxes
170
-
180
762
153
1,265
183
368
828
168
1,547
13
-
188
66
15
282
(39)
356
33
(69)
281
183
-
368
828
168
1,547
144
724
861
99
1,828
The income tax expense for the period is the tax payable on the current period’s taxable income based on the national income tax rate
for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax
base of assets and liabilities and their carrying amounts in the consolidated financial statements.
Deferred taxes
Deferred tax assets and liabilities are recognised for all temporary differences, between carrying amounts of assets and liabilities for
financial reporting purposes and their respective tax bases, at the tax rates expected to apply when the assets are recovered or
liabilities settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. Exceptions are made for
certain temporary differences arising on initial recognition of an asset or a liability if they arose in a transaction, other than a business
combination, that at the time of the transaction did not affect either accounting profit or taxable profit.
Deferred tax assets are only recognised for deductible temporary differences if it is probable that future taxable amounts will be
available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of
investments in subsidiaries and associates where the parent entity is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Current and deferred tax balances relating to amounts recognised directly in other comprehensive income are also recognised directly
in other comprehensive income.
Tax consolidation
Jumbo Interactive Limited and its wholly owned Australian controlled subsidiaries are part of a tax consolidated group under Australian
taxation law since 1 July 2006. Jumbo Interactive Limited is the head entity in the tax consolidated group. Entities within the tax
consolidation group have entered into a tax funding agreement (TFA) and tax sharing deed (TSD) with the head entity. Under the terms
of the TFA, Jumbo Interactive Limited and each of the entities in the tax consolidation group have agreed to pay (or receive) a tax
equivalent payment to (or from) the head entity, based on the current tax liability or current tax asset of the entity.
92 Annual Report 2022
Annual Report 2022 93
Note 5: Earnings per share (EPS)
OPERATING ASSETS AND LIABILITIES
(a) Basic earnings per share
In this section
Basic EPS is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares
outstanding.
Operating assets and liabilities provides information about the working capital of the Group and major balance sheet items, including the
accounting policies, judgements and estimates relevant to understanding these items.
(b) Diluted earnings per share
Diluted EPS is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary
shares outstanding after adjusted for the effects of dilutive potential ordinary shares.
(c) Profit after tax attributable to owners of the Company used as numerator
Profit attributable to the owners of the Company
(d) Weighted average number of shares used as denominator
Consolidated
2022
$’000
31,176
2021
$’000
26,959
Consolidated
2022
Number
2021
Number
Weighted average number of ordinary shares used as the denominator in calculating basic EPS
62,537,615
62,448,139
Adjustments for calculation of diluted EPS:
– Options and rights
659,619
621,604
Weighted average number of ordinary shares used as the denominator in calculating diluted EPS
63,197,234
63,069,743
All outstanding options and some performance rights were included in the number of weighted average number of ordinary shares used
to calculate diluted earnings per share because they are currently ‘in-the-money’.
OPERATING ASSETS AND LIABILITIES
Note 6: Cash and cash equivalents
Note 7: Trade and other receivables
Note 8: Property, plant and equipment
Note 9: Intangible assets
Note 10: Right-of-use assets
Note 11: Trade and other payables
Note 12: Employee benefit obligations
Note 13: Lease liabilities
93
93
94
95
97
104
105
106
107
Note 6: Cash and cash equivalents
Consolidated
Note
2022
$’000
2021
$’000
(a) Cash and cash equivalents
Total cash and cash equivalents
Included in the above balance:
General account balances
Online lottery customer account balances
11
68,930
63,139
60,015
8,915
68,930
53,837
9,302
63,139
Online lottery customer account balances are deposits and prize winnings earmarked for payment to customers on demand.
At the review period end 30 June 2022, $1,153,000 (2021: $1,066,000) was held in trust for the payment of prizes and charity
distributions relating to the Gatherwell business, and neither the cash nor the corresponding liability is recognised in the Statement of
Financial Position.
Recognition and measurement
Cash and cash equivalents include cash on hand, and deposits held ‘at call’ and with original maturities of three months or less, with
financial institutions.
(b) Reconciliation of Cash Flow from Operations with Profit after Income Tax
Profit for the year after income tax
31,176
26,959
Consolidated
2022
$’000
2021
$’000
Non-cash flows
Amortisation
Depreciation
Fair value movement on contingent consideration
Share option expense
8,564
178
-
1,339
8,106
133
177
968
94 Annual Report 2022
Annual Report 2022 95
Consolidated
Note 8: Property, plant and equipment
Gain on sale of subsidiary
Net foreign exchange effects - loss/(gain)
Changes in operating assets and liabilities, net of the effects of purchase and disposal of
subsidiaries
Increase in trade receivables
Increase in other receivables
Decrease/(increase) in inventories
Increase in DTA
Increase in trade payables
Increase/(decrease) in other payables
Increase in other provisions
Increase in DTL
Increase/(decrease) in provision for income tax
Increase/(decrease) in foreign exchange reserve
Cash flow from operations
Note 7: Trade and other receivables
Trade receivables
Allowance for doubtful debts
Other receivables
Prepayments
2022
$’000
(525)
278
(204)
(1,739)
(15)
(281)
66
4,831
142
1,254
(96)
(775)
44,193
Consolidated
2022
$’000
1,331
-
1,331
793
3,941
6,065
2021
$’000
-
(234)
(534)
(1,062)
15
(282)
444
(208)
79
1,108
(802)
249
35,116
2021
$’000
845
-
845
218
2,494
3,557
Recognition and measurement
Trade receivables are recognised at original invoice amounts less an allowance for uncollectible amounts, and generally have
repayment terms ranging from 7 to 31 days.
The Group applies the simplified approach to providing for expected credit losses prescribed by AASB 9, which requires the use of the
lifetime expected loss provision for all trade receivables. Refer Note 18(b): Financial risk management for details.
Plant and equipment – at cost
Accumulated depreciation
Leasehold improvements – at cost
Accumulated amortisation
Total property, plant and equipment
Movements in carrying amounts
Consolidated Group
2021
Balance at the beginning of year
Additions
Additions through acquisition
Disposals
Depreciation/amortisation expense
Carrying amount at the end of year
2022
Balance at the beginning of year
Additions
Additions through acquisition
Disposals
Effects of movements in foreign exchange
Depreciation/amortisation expense
Carrying amount at the end of year
Plant and equipment
$’000
Leasehold Improvements
$’000
289
96
16
(14)
(135)
236
236
326
186
(4)
6
(178)
572
196
-
-
-
(36)
160
160
-
-
-
-
(37)
123
Consolidated
2022
$’000
3,102
(2,530)
572
777
(654)
123
695
2021
$’000
1,912
(1,676)
236
777
(617)
160
396
Total
$’000
485
96
16
(14)
(171)
396
396
326
186
(4)
6
(215)
695
96 Annual Report 2022
Annual Report 2022 97
Recognition and measurement
(i) Initial recognition and measurement
Property, plant and equipment
Property, plant and equipment is stated at historical cost, including costs directly attributable to bringing the asset to the location and
condition necessary for it to be capable of operating in the manner intended by management, less depreciation and any impairments.
(ii) Subsequent costs
Improvements to leasehold property are recognised as a separate asset.
All repairs and maintenance are charged to the profit or loss during the reporting period in which they occur.
(iii) Depreciation and amortisation
Property, plant and equipment are depreciated or amortised from the date of acquisition, or, in respect of internally generated assets,
from the time an asset is held ready for use.
Plant and equipment are depreciated using the straight-line method to allocate their costs, net of their residual values, over their
estimated useful lives.
Leasehold improvements are amortised over the shorter of either the unexpired term of the lease or the estimated useful life of the
improvements.
The depreciation and amortisation rates used during the year were based on the following range of useful lives
Plant and equipment
Leasehold improvements
Two to five years
Up to six years
The depreciation and amortisation rates are reviewed annually and adjusted if appropriate. An asset’s carrying amount is written down
to its recoverable amount if the asset’s carrying value is greater than its estimated recoverable amount.
(iv) Derecognition
An item of property, plant or equipment is derecognised when it is disposed of or no future economic benefits are expected from its use
or disposal.
Gains and losses on disposal are calculated as the difference between the net disposal proceeds and the asset’s carrying value and are
included in profit or loss in the year that the item is derecognised.
Note 9: Intangible assets
Goodwill
Accumulated impairment losses
Net carrying value
Intellectual property
Accumulated impairments loss
Net carrying value
Website development costs
Accumulated amortisation
Net carrying value
Customer contracts and relationships costs
Accumulated amortisation
Net carrying value
Software costs
Accumulated amortisation
Net carrying value
TLC extension fee
Accumulated amortisation
Net carrying value
Domain names – cost
Accumulated impairment losses
Net carrying value
Other
Accumulated amortisation
Net carrying value
Total intangibles
Consolidated
2022
$’000
14,660
(855)
13,805
23
(23)
-
49,338
(35,057)
14,281
9,169
(705)
8,464
1,731
(554)
1,177
15,000
(2,875)
12,125
915
(62)
853
226
(126)
100
2021
$’000
10,133
(855)
9,278
53
(23)
30
45,201
(30,961)
14,240
1,293
(409)
884
958
(394)
564
15,000
(1,375)
13,625
906
(62)
844
62
(47)
15
50,805
39,480
98 Annual Report 2022
Annual Report 2022 99
(a) Movements in carrying values
Significant judgements and estimates
Impairment assessment of goodwill and domain names
A key judgement by management with regards to the (i) Lottery Retailing CGU is that the reseller agreements with The Lottery
Corporation will continue, (ii) Software-as-a-Service CGU is that software licence agreements with customers will continue, and (iii)
Managed Services CGU is that the lottery management agreements with customers will continue. The key assumptions used for
value-in-use calculations are discussed further in Note 9(b). Goodwill and domain names are tested for impairment half yearly.
Impairment assessment of other intangible assets
The Group considers half yearly whether there have been any indicators of impairment and then tests whether non-current assets
have incurred any impairment in accordance with the accounting policy.
Estimated useful life of website development costs
Management estimates the useful life of intangible assets-website development costs based on the expected period of time over
which economic benefits from the use of the asset will be derived. Management reviews useful life assumptions on an annual basis
having given consideration to variables including historical and forecast usage rates, technological advancements and changes in
legal and economic conditions.
The amortisation period relating to the website developments costs is five years.
Domain names
Domain names have an indefinite useful life because:
•
•
•
•
there is no time limit on the expected usage of the domain names;
licence renewal is automatic on payment of the renewal fee without satisfaction of further renewal conditions;
the cost is not significant when compared with future economic benefits expected to flow from renewal. As such, the useful life
can include the renewal period; and
since there is no limit on the number of times the licence can be renewed this leads to the assessment of “indefinite” useful life.
This assessment has been based on:
technical, technological, commercial and other types of obsolescence;
the stability of the industry in which the asset operates and changes in the market demand for the products and/or services
output from the asset;
the level of maintenance expenditure required to obtain the expected future economic benefits from the asset and the entity’s
ability and intention to reach such a level; and
•
•
•
•
Consolidated Group
2021
Balance at the beginning
of the year
Additions
Additions internally
developed
Amortisation charge
Effects of movements in
foreign exchange
Closing value at
30 June 2021
2022
Balance at the beginning
of the year
Additions
Additions through
acquisitions
Additions internally
developed
Disposal through sale of
entity
Amortisation charge
Effects of movements in
foreign exchange
Closing value at
30 June 2022
Goodwill
$’000
Intellectual
property
$’000
Website
development
costs
$’000
Customer
contracts
and
relationships
$'000
TLC
extension
fee
$’000
Software
$’000
Domain
names
$’000
Other
$’000
Total
$’000
9,102
30
13,012
1,111
-
709
842
18
24,824
-
-
-
176
-
-
-
-
-
6,406
(5,194)
-
-
15,000
-
-
-
(253)
(1,375)
(161)
16
26
-
16
2
-
-
-
-
-
15,002
6,406
(3)
(6,986)
-
234
9,278
30
14,240
884
13,625
564
844
15
39,480
-
30
14,240
884
13,625
564
844
-
9
-
-
-
-
-
5,706
(30)
(196)
-
7,892
-
-
-
-
-
-
806
-
-
(5,469)
(323)
(1,500)
(178)
-
11
-
(15)
15
-
39,480
9
88
13,571
-
-
5,706
(226)
(4)
(7,474)
1
(261)
-
-
-
-
-
14,281
8,464
12,125
1,177
853
100
50,805
-
-
-
9,278
-
4,785
-
-
-
(258)
13,805
(b) Impairment testing of Cash-Generating Units (CGU) containing goodwill or
intangible assets with indefinite useful lives
the period of control over the asset and legal or similar limits on the use of the asset.
Goodwill and Indefinite Life Intangibles allocated to CGUs
Lottery Retailing
SaaS
Managed Services
Total
2022
$’000
2021
$’000
Goodwill
2,831
2,831
Domain names
-
-
2022
$’000
-
853
2021
$’000
2022
$’000
2021
$’000
2022
$’000
2021
$’000
-
10,974
6,447
13,805
9,278
844
-
-
853
844
Lottery Retailing
Goodwill has been allocated to the Lottery Retailing CGU which is an operating segment.
The recoverable amount of the CGU is based on a value-in-use calculation using a discounted cash flow model based on a one-year
budget projection less an allocation of corporate expenses, approved by the Board and extrapolated over a five-year period using a
steady rate, together with a terminal value. The growth rate used in these projections does not exceed the historical growth rate of the
relative CGU.
100 Annual Report 2022
Annual Report 2022 101
Key assumptions used for value-in-use calculation of the CGU are as follows:
Managed Services
Discount rate
Budgeted cash flow growth rate
Terminal value growth rate
TLC reseller agreements continue beyond current agreement periods
2022
15.75%
3%
3%
2021
13%
3%
3%
The discount rate used is a pre-tax calculated weighted average cost of capital based on the capital asset pricing model and is specific
to the relevant segment in which the unit operates. Management determined projections based on past performance and its
expectations for the future. The growth rate used is consistent with those used in industry reports.
The estimated recoverable amount of the CGU exceeded the carrying amount of goodwill, The Lottery Corporation extension fee and
other intangible assets and right-of-use assets by approximately $214,232,000 (2021: $263,466,000). Management has identified that
a reasonably possible change in two key assumptions could cause the carrying amount to exceed the recoverable amount. The
following table shows the amount by which these two assumptions would both need to change jointly for the estimated recoverable
amount to equal the carrying amount.
Discount rate
Budgeted cash flow growth rate
Change required for carrying amount to
equal recoverable amount
2022
2.25ppt
(90.4%)
2021
5.0ppt
(89.0%)
Should the lottery reseller agreement be cancelled or not be extended for further periods when they expire 25 August 2030, an
impairment loss would be recognised up to the maximum carrying value of $15,529,000 (2021: $17,223,000).
Software-as-a-Service
Domain names have been allocated to the Software-as-a-Service CGU which is an operating segment.
The recoverable amount of the CGU is based on a value-in-use calculation using a discounted cash flow model based on a one-year
budget projection less an allocation of corporate expenses, approved by the Board and extrapolated over a five-year period using a
steady rate, together with a terminal value. The growth rate used in these projections does not exceed the historical growth rate of the
relative CGU.
Key assumptions used for value-in-use calculation of the CGU are as follows:
Discount rate
Budgeted cash flow growth rate
Terminal value growth rate
2022
15.75%
3%
3%
2021
14%
3%
3%
Software licence agreements continue beyond current agreement periods
Annual capital expenditure
$5,654,000
$6,263,000
The discount rate used is a pre-tax calculated weighted average cost of capital based on the capital asset pricing model and is specific
to the relevant segment in which the unit operates. Management determined projections based on past performance and its
expectations for the future. The growth rate used is consistent with the Lottery Retailing CGU which contributes ~80% of SaaS revenue.
The estimated recoverable amount of the CGU exceeded the carrying amount of software and domain names by approximately
$138,545,000 (2021: $91,945,000). Management has identified that a reasonably possible change in two key assumptions could cause
the carrying amount to exceed the recoverable amount. The following table shows the amount by which these two assumptions would
both need to change jointly for the estimated recoverable amount to equal the carrying amount.
Discount rate
Budgeted cash flow growth rate
Change required for carrying amount to
equal recoverable amount
2022
2.25ppt
(84.7%)
2021
4ppt
(78.9%)
Should the customer contracts be cancelled or not be extended for further periods when they expire, an impairment loss would be
recognised up to the maximum carrying value of $17,425,000 (2021: $18,179,000).
The Managed Services CGU is comprised of two operating segments – Managed Services UK (Gatherwell) and Managed Services
Canada (Stride).
Managed Services United Kingdom
Goodwill has been allocated to the Managed Services United Kingdom CGU which is an operating segment.
The recoverable amount of the CGU is based on a value-in-use calculation using a discounted cash flow model based on a one-year
budget projection less an allocation of corporate expenses, approved by the Board and extrapolated over a five-year period using a
steady rate, together with a terminal value. The growth rate used in these projections does not exceed the historical growth rate of the
relative CGU1.
Key assumptions used for value-in-use calculation of the CGU are as follows:
Discount rate
Budgeted EBITDA growth rate
Terminal value growth rate
Lottery management agreements continue beyond current agreement periods
2022
15.75%
3%
3%
2021
15%
3%
3%
The discount rate used is a pre-tax calculated weighted average cost of capital based on the capital asset pricing model and is specific
to the relevant segment in which the unit operates. Management determined projections based on past performance and its
expectations for the future. The growth rate used is consistent with those used in industry reports.
The estimated recoverable amount of the CGU exceeded the carrying amount of goodwill, customer contracts and relationships and
software by approximately $4,995,000 (2021: $5,085,000). Management has identified that a reasonably possible change in two key
assumptions could cause the carrying amount to exceed the recoverable amount. The following table shows the amount by which
these two assumptions would both need to change jointly for the estimated recoverable amount to equal the carrying amount.
Discount rate
Budgeted cash flow growth rate
Change required for carrying amount to
equal recoverable amount
2022
2.25ppt
(16.9%)
2021
3ppt
(8.8%)
Should all customer contracts cease, an impairment loss would be recognised up to the maximum carrying value of $7,144,000 (2021:
$7,894,000)
Managed Services Canada
Goodwill has been allocated to the Managed Services Canada CGU which is an operating segment.
The recoverable amount of the CGU is based on a value-in-use calculation using a discounted cash flow model based on a one-year
budget projection less an allocation of corporate expenses, approved by the Board and extrapolated over a five-year period using a
steady rate, together with a terminal value. The growth rate used in these projections does not exceed the historical growth rate of the
relative CGU1.
Key assumptions used for value-in-use calculation of the CGU are as follows:
Discount rate
Budgeted EBITDA growth rate
Terminal value growth rate
Lottery management agreements continue beyond current agreement periods
1the business was only acquired 1 June 2022 so there is no comparative information.
2022
15.75%
3%
3%
2021
n/a
n/a
n/a
The discount rate used is a pre-tax calculated weighted average cost of capital based on the capital asset pricing model and is specific
to the relevant segment in which the unit operates. Management determined projections based on past performance and its
expectations for the future. The growth rate used is consistent with those used in industry reports.
102 Annual Report 2022
Annual Report 2022 103
Domain Names
Acquired domain names are stated at cost and are considered to have indefinite useful lives and are not amortised. The useful life is
assessed annually to determine whether events or circumstances continue to support an indefinite useful life assessment. The carrying
value of domain names is tested semi-annually at each reporting date for impairment.
Impairment of non-financial assets
Assets are tested for impairment at the end of each reporting period or whenever events or changes in circumstances indicate that the
carrying amount may not be recovered.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows which
are largely independent of the cash flows from other assets or groups of assets.
The recoverable amount is the greater of the asset’s fair value less costs to sell and value-in-use. In assessing value-in-use, the
estimated cash flows are discounted to their present value using a pre-tax discount rate that reflects market assessments of the time
value of money and the specific risks of the asset.
Impairment losses are recognised in the profit or loss. Non-financial assets other than goodwill that incur impairment are reviewed for
possible reversal of impairment at each reporting period.
The estimated recoverable amount of the CGU exceeded the carrying amount of goodwill, customer contracts and relationships and
software by approximately $8,091,000 (2021: n/a). Management has identified that a reasonably possible change in two key
assumptions could cause the carrying amount to exceed the recoverable amount. The following table shows the amount by which
these two assumptions would both need to change jointly for the estimated recoverable amount to equal the carrying amount.
Discount rate
Budgeted cash flow growth rate
Change required for carrying amount to
equal recoverable amount
2022
2.25ppt
(11.6%)
2021
n/a
n/a
Should all customer contracts cease, an impairment loss would be recognised up to the maximum carrying value of $13,560,000.
Recognition and measurement
Goodwill
Goodwill represents the excess of the cost of the business combination over the Group’s share of the net fair value of the identifiable
assets, liabilities and contingent liabilities acquired. Goodwill is not amortised but is measured at cost less any accumulated impairment
losses. Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying
value may be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combination’s synergies. Impairment is
determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Impairment losses on
goodwill cannot be reversed.
Intellectual Property
Acquired intellectual property is stated at cost and is measured at cost less any accumulated impairment losses. Intellectual property is
considered to have an indefinite useful life and is not amortised. The carrying value of intellectual property is tested for impairment
annually, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment losses
are recognised in profit or loss. Any reversal of impairment losses of intellectual property is recognised in profit or loss.
Website Developments Costs
Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only
when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use; ability to
use the intangible asset; how the intangible asset will generate probable future economic benefits; the availability of adequate technical,
financial and other resources to complete the intangible asset; and ability to measure reliably the expenditure attributable to the
intangible asset during its development.
Development costs have a finite life and are amortised on a straight-line basis matched to the future economic benefits over the useful
life of the project of five years.
Customer contracts and relationships
Customer contracts and relationships acquired in a business combination are amortised on a straight-line basis over the period of their
expected benefit, being their finite life of between 5 and 10 years.
Software
Software acquired in a business combination is amortised on a straight-line basis over the period of their expected benefit, being their
finite life of 5 years.
The Lottery Corporation extension fee
An extension fee was payable when the 10-year TLC Agreement was executed on 25 August 2020. The extension fee is capitalised as
the Agreement will deliver future economic benefits and these benefits can be reliably measured.
The extension fee has a finite life and is amortised on a straight-line basis matched to the economic benefits over the useful life of the
Agreement of 10 years.
104 Annual Report 2022
Annual Report 2022 105
Note 10: Right-of-use assets
Note 11: Trade and other payables
Land and buildings - right-of-use
Less: Accumulated amortisation
Plant and equipment - right-of-use
Less: Accumulated amortisation
Consolidated Group
2021
$’000
5,796
(2,932)
2,864
166
(166)
-
2,864
2021
$’000
5,711
(1,953)
3,758
164
(91)
73
3,831
The Group leases land and buildings for its offices under agreements of between two to seven years with, in some cases, options to
extend which have been included in the lease liability where the options are expected to be exercised. The leases have various
escalation clauses. On renewal, the terms of the leases are renegotiated. The Group also leases plant and equipment under
agreements of four years.
The Group leases land and buildings and office equipment under agreements of less than one year. These leases are either short-term
or low-value, so have been expensed as incurred and not capitalised as right-of-use assets.
For impairment testing, the right-of-use assets have been allocated to the Lottery Retailing and SaaS CGUs based on the headcount
assigned to each operating segment. Refer to Note 9: Intangible assets for further information on the impairment testing key
assumptions and sensitivity analysis.
Recognition and measurement
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises
the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of
any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs
expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the
asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease
term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement
of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12
months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
Note
Total trade and other payables
Included in the above:
Trade creditors
GST payable
Sundry creditors and accrued expenses
Employee benefits
Customer funds payable
6(a)
Consolidated
2022
$’000
24,530
1,891
694
11,498
1,532
15,615
8,915
2021
$’000
19,296
1,785
903
5,845
1,461
9,994
9,302
24,530
19,296
Recognition and measurement
Trade and other payables represent liabilities for goods and services provided to the Group prior to the year end and which remains
unpaid. These amounts are unsecured and have 7-to-31-day payment terms.
(i) Employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled
within 12 months of the end of the reporting period are recognised in other liabilities in respect of employees’ services rendered up to the
end of the reporting period and are measured at amounts expected to be paid when the liabilities are settled. Liabilities for non-
accumulating sick leave are recognised when leave is taken and measured at the actual rates paid or payable.
(ii) Superannuation
Employees have defined contribution superannuation funds. Contributions are recognised as an expense as they become payable.
Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
(iii) Termination benefits
Termination benefits are payable when employment is terminated before the retirement date, or when an employee accepts voluntary
redundancy in exchange for these benefits. The Group recognises termination benefits as an expense and a liability on the earlier of
when the Group:
•
•
can no longer withdraw the offer and the benefits; and
recognises costs for restructuring under AASB 137 Provisions, Contingent Liabilities and Contingent Assets and which involves
the payment of termination benefits.
Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.
106 Annual Report 2022
Annual Report 2022 107
Note 12: Employee benefit obligations
Note 13: Lease liabilities
CURRENT
Long service leave
NON-CURRENT
Long service leave
Recognition and measurement
(i) Long service leave
Liabilities for long service leave are not expected to be settled wholly within 12 months after the end of the reporting period. They are
recognised as part of the provision for employee benefits and measured as the present value of expected future payments to be made
in respect of services provided by employees to the end of the reporting period. Consideration is given to expected future salaries and
wages levels, experience of employee departures and periods of service. Expected future payments are discounted using corporate
bond rates at the end of the reporting period with terms to maturity and currency that match, as closely as possible, the estimated future
cash outflows.
Consolidated
2022
$’000
2021
$’000
818
699
525
1,343
605
1,304
CURRENT
Lease Liabilities
NON-CURRENT
Lease Liabilities
Consolidated
2022
$’000
2021
$’000
1,022
1,013
2,181
3,203
3,120
4,133
Recognition and measurement
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the
lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group’s incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees,
exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a
change in the following: future lease payments arising from a change in an index, or a rate used; residual guarantee; lease term; certainty
of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-
of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Except for short-term leases and leases of low-value assets, right-of-use assets and corresponding lease liabilities are recognised in
the Statement of Financial Position. Straight-line operating lease expense recognition is replaced with a depreciation charge for the
right-of-use assets (included in operating costs) and an interest expense on the recognised lease liabilities (included in finance costs).
For classification within the Statement of Cash Flows, the interest portion is disclosed in operating activities and the principal portion of
the lease payments are separately disclosed in financing activities.
Significant judgements and estimates
A key judgement by management is the incremental borrowing rate of 3.50% p.a. being applied as the discount rate in the initial
recognition of the lease values.
108 Annual Report 2022
Annual Report 2022 109
CAPITAL AND FINANCIAL RISK MANAGEMENT
In this section
Capital and financial risk management provides information about the capital management practices of the Group and shareholder
returns for the year, discusses the Group’s exposure to various financial risks, explains how these affect the Group’s financial position
and performance and what the Group does to manage these risks.
Note 15: Dividends
(a) Ordinary shares
CAPITAL AND FINANCIAL RISK MANAGEMENT
Note 14: Capital risk management
Note 15: Dividends
Note 16: Equity and reserves
Note 17: Borrowings
Note 18: Financial risk management
108
108
109
110
111
112
Final fully franked ordinary dividend of 18.5 (2021: 17.0) cents per share franked at the tax rate of 30% (2021:
30%)
Interim fully franked ordinary dividend of 22.0 (2021: 18.0) cents per share franked at the tax rate of 30% (2021:
30%)
Total dividends paid or provided for
Dividends paid in cash during the years ended 30 June 2022 and 30 June 2021 were as follows:
Paid in cash
Note 14: Capital risk management
(b) Dividends not recognised at the end of the reporting period
Consolidated
2022
$’000
2021
$’000
11,555
10,616
13,741
25,296
11,241
21,857
25,296
21,857
Consolidated
2022
$’000
2021
$’000
12,804
11,553
Consolidated
2022
$’000
2021
$’000
Since year end, the Directors have recommended the payment of a final 2022 fully franked ordinary dividend of
20.5 (2021: 18.5) cents per share franked at the rate of 30% (2021: 30%). The aggregate amount of the
proposed dividend expected to be paid on 23 September 2022 (2021: 24 September 2021), but not
recognised as a liability at year end, is:
(c) Franked dividends
The franked portions of dividends paid and recommended after 30 June 2022 will be franked out of
existing franking credits or out of franking credits arising from the payment of income tax in the year ending 30
June 2022.
Franking credits available for subsequent financial years based on a tax rate of 30% (2021: 30%)
16,890
14,903
The above amounts represent the balance of the franking account as at the reporting date adjusted for:
(i) franking credits that will arise from the payment of the amount of the provision for income tax, and
(ii) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date.
The impact on the franking account of the dividends paid and recommended by the Directors since the end of the reporting period, but
not recognised as a liability at the reporting date, will be a reduction in the franking account of $5,487,000 (2021: $4,951,000).
Total borrowings1
Less: cash and cash equivalents – general account balances
Net debt
Total equity
Total capital
Gearing ratio
Note
17
6(a)
Consolidated
2022
$’000
-
2021
$’000
-
(60,015)
(53,837)
-
92,983
92,983
0%
-
85,326
85,326
0%
1Excludes bank guarantees and commercial credit card
The Group’s objective is to maintain a strong capital base so as to maintain investor, creditor and market confidence and sustain future
development of the business.
The Group monitors its capital structure by reference to its capital management strategy.
The gearing ratio is calculated as total net debt divided by total capital. Net debt is calculated by as total borrowings less cash and cash
equivalents (up to a minimum of zero). Total capital is net debt plus total equity. There were no changes in the Group’s approach to
capital management during the year, other than a change to the Dividend policy from 85% of statutory NPAT to a range of 65% to 85%
of statutory NPAT with effect from FY2023.
110 Annual Report 2022
Annual Report 2022 111
Note 16: Equity and reserves
(a) Contributed equity
Issued shares
Consolidated
Consolidated
2022
Shares
62,775,211
2022
$’000
81,390
2021
Shares
62,448,757
2021
$’000
80,177
(d) Reserves
Nature and purpose of reserves
Profits appropriation reserve
The profits appropriation reserve records accumulated profits available for distribution at the Directors’ discretion. In June 2010, there
was a change in the test for payment of dividends from a ‘profit test’ to ‘solvency test’ (s254T Corporations Act 2001), and the profits
appropriation reserve was established to ensure the accumulated losses up until then were ‘ring-fenced’ and that future profits were
available for distribution, in particular for dividend payments.
Share-based payments reserve
The share-based payments reserve records items recognised as expenses on the fair value of share-based remuneration provided to
employees. This reserve can be reclassified as retained earnings if options lapse.
Ordinary shares – fully paid
Movements in ordinary share capital
Details
Balance 1 July 2020
Shares issued during the year
10 July 2020-Exercise of options
Balance 30 June 2021
Balance 1 July 2021
25 July 2022-Issue of share
24 March 2022-Exercise of options
30 June 2022-Exercise of rights
Balance 30 June 2022
Consolidated
Foreign currency translation reserve
Shares
62,423,757
25,000
62,448,757
62,448,757
9,529
300,000
16,925
$’000
80,089
88
80,177
80,177
163
1,050
-
The foreign currency translation reserve records the foreign exchange differences arising on translation of investments in foreign
controlled subsidiaries. Amounts are reclassified to profit or loss when an entity is disposed of.
Financial assets at fair value through other comprehensive income (FVOCI) reserve
The financial assets at fair value reserve comprises changes in the fair value of FVOCI investments which are recognised in other
comprehensive income including when investments are sold or reclassified.
Note 17: Borrowings
62,775,211
81,390
(a) Facilities with Banks
Issued capital represents the amount of consideration received for securities issued or paid for securities bought back
by Jumbo.
Costs directly attributable to the issue of new shares or options are deducted from the consideration received, net of
income taxes.
(b) Ordinary shares
Ordinary shares have no par value, and the company does not have a limited amount of authorised share capital.
Ordinary shareholders are entitled to participate in dividends and the proceeds on winding up of the Company in proportion to the
number of and amounts paid on the shares held. Every ordinary shareholder present at a meeting in person or by proxy is entitled to one
vote on a show of hands and upon a poll each share is entitled to one vote.
(c) Options
Details of the employee option plan, including details of options issued, exercised and lapsed during the financial year and options
outstanding at the end of the financial year are set out in Note 26: Share-Based Payments.
For information relating to share options issued to third parties during the financial year, refer to Note 26: Share-Based Payments.
Credit facility
Bank guarantees
Commercial credit card
Bank loan
Facilities utilised
Bank guarantees
Commercial credit card
Bank loan
Amount available
Note
29
Consolidated
2022
$’000
3,250
300
50,000
53,550
(3,100)
(270)
-
50,180
2021
$’000
3,250
300
-
3,550
(3,091)
(280)
-
179
The facilities are provided by Australia and New Zealand Banking Group Limited subject to general and specific terms and conditions
being set and met periodically.
There were no outstanding interest-bearing liabilities for the financial year ended 30 June 2022 (2021: nil).
(b) Assets pledged as security
The bank facilities are secured by a fixed and floating charge over all the Australian assets of the Group.
112 Annual Report 2022
Annual Report 2022 113
(c) Defaults and breaches
Risk management
There have been no defaults or breaches during the financial year ended 30 June 2022.
The Group manages cash flow interest rate risk by using term deposits with banks for various periods. The weighted average maturity
of outstanding term deposits is approximately 57 days (2021: 35 days). Term deposits currently in place cover approximately 11% (2021:
53%) of the total cash and cash equivalent balances.
Note 18: Financial risk management
Sensitivity on market risks
The Group has exposure to a variety of financial risks including market risk (foreign exchange risk and interest rate risk), credit risk and
liquidity risk.
Financial risk management is performed by a central treasury function on behalf of the Group under the Treasury Policy approved by
the Board annually. Speculative activities are strictly prohibited. Compliance with the Treasury Policy is monitored on an ongoing basis
through regular reporting to the Board.
Whilst there has been no noticeable impact on financial performance from COVID-19, there is a risk that any future economic downturn
could reduce disposable income and consequently may impact customer spending levels.
(a) Market risk
Market risk is the risk that adverse movements in foreign exchange and interest rates will affect the Group’s financial performance or
the value of its holdings of financial instruments. The Group measures market risk using cash flow at risk. The objective of risk
management is to manage the market risks inherent in the business to protect profitability and return on assets.
(i) Foreign exchange risk
Exposure to foreign exchange risk
Foreign exchange risk arises from commercial transactions (transactional risks) and recognised assets and liabilities (translational
risks) that are denominated in or related to a currency that is not in the Group’s functional currency. The Group’s foreign exchange risk
relates largely to the Fiji Dollar (FJD), Great British Pound (GBP) and Canadian Dollar (CAD).
Risk management
The Group's treasury function monitors the Group’s exposure regularly and utilise the spot market to buy and sell specified amounts of
foreign currency to manage this risk. Transactional risks are managed predominantly within the Group’s pricing policies through the
regular review of prices in foreign currency.
Sensitivity on foreign exchange risk
Any movement in foreign exchange rates would not be significant to the Group.
(ii) Interest rate risk
Exposure to interest rate risk
The Group has interest bearing assets and therefore its income and operating cash flows are subject to changes in market
interest rates.
At the reporting date, the Group has exposure to the following interest rates:
Deposits
1 weighted average interest rate
Rate 1
%
0.45
Consolidated
2022
$’000
68,930
Rate 1
%
0.24
2021
$’000
63,139
The following table summarises the gain/(loss) impact of a 200 basis points (bps) interest rate change on net profit and equity before
tax, with all other variables remaining constant, as at 30 June 2022:
Consolidated
Effect on profit
(before tax)
Effect on equity
(before tax)
2022
2021
2022
2021
1,379
(1,379)
1,263
(1,263)
1,379
1,263
(1,379)
(1,263)
200 bps movement in interest rates
200 bps increase in interest rates
200 bps decrease in interest rates
(b) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. Credit risk arises principally from cash and cash equivalents and trade and other receivables.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at the end of the reporting period to
recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of
financial position and notes to the financial statements. Assets are pledged as security as detailed in Note 17(b).
Credit risk is managed on a Group basis through the Board approved Treasury Policy and is reviewed regularly by the Board.
The Board monitors credit risk by actively assessing the rating quality and liquidity of counter parties:
•
•
•
Surplus funds are only invested with banks and financial institutions with a Standard and Poor’s rating of no less than A and to a
limited amount at any one financial institution:
All potential customers are rated for credit worthiness taking into account their size, market position and financial standing, and the
risk is measured using debtor aging analysis; and
Customers that do not meet the Group’s strict credit policies may only purchase in cash or using recognised credit cards.
(i) Trade receivables
The Group applies the AASB 9 simplified model of recognising lifetime expected credit losses for all trade receivables as these items do
not have a significant financing component.
In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared credit
risk characteristics. They have been grouped based on the days past due and also according to the geographical location of customers.
The expected loss rates are based on the payment profile for sales over the past 60 months before 30 June 2022 and 30 June 2021
respectively as well as the corresponding historical credit losses during that period. The historical rates are adjusted to reflect current
and forecast expected losses.
Trade receivables are written off (i.e., derecognised) when there is no reasonable expectation of recovery. Failure to make payments
within 180 days from the invoice date and failure to engage with the Group on alternative payment arrangement amongst other is
considered indicators of no reasonable expectation of recovery.
114 Annual Report 2022
Annual Report 2022 115
Trade receivables days past due
(d) Fair value hierarchy
30 June 2022
$’000s
Expected credit loss rate
Gross carrying amount $
Lifetime expected credit loss $
30 June 2021
$’000s
Expected credit loss rate
Gross carrying amount $
Lifetime expected credit loss $
(c) Liquidity risk
Current
1-30 days
31-60 days
61-90 days
> 90 days
Total
0.0%
260
-
0.0%
664
-
0.0%
0.0%
0.0%
133
-
127
-
147
-
Trade receivables days past due
0.0%
1,331
-
Current
1-30 days
31-60 days
61-90 days
> 90 days
Total
0.0%
13
-
0.0%
524
-
0.0%
0.0%
8
-
51
-
0.0%
249
-
845
-
Liquidity risk is the risk that the Group will encounter difficulties in meeting the obligations associated with its financial liabilities. The
Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate cash balances are maintained to meet its
liabilities when due.
The following table summarises the contractual timing of undiscounted cash flows of financial instruments:
2022
Less than 1 year
$’000
Between
1 and 2 years
$’000
Between
3 and 5 years
$’000
Over 5 years
$’000
Total
$’000
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Lease liabilities1
Contingent consideration
1Weighted average interest rate 3.5%
2021
Financial assets
Cash and cash equivalents
Trade and other receivables
Other assets
Financial liabilities
Trade and other payables
Lease liabilities1
Contingent consideration
68,930
6,065
74,995
24,530
1,118
1,820
27,468
-
-
-
-
1,157
1,638
2,795
-
-
-
-
1,102
-
1,102
-
-
-
-
-
-
-
Less than 1 year
$’000
Between
1 and 2 years
$’000
Between
3 and 5 years
$’000
Over 5 years
$’000
63,139
3,557
1,807
68,503
19,296
1,141
1,807
22,244
-
-
-
-
-
2,216
-
2,216
-
-
-
-
-
1,073
-
1,073
-
-
-
-
-
-
-
-
68,930
6,065
74,995
24,530
3,377
3,458
31,365
Total
$’000
63,139
3,557
1,807
68,503
19,296
4,430
1,807
25,533
The fair value of cash, cash equivalents and non-interest-bearing financial assets and liabilities approximates their carrying value due to
their short-term maturity.
The fair value of financial instruments that are not traded in an active market (for example, unlisted investments) are determined using
valuation techniques. The valuation techniques maximise the use of observable market data where possible and rely as little as possible
on entity specific estimates.
The following tables detail the consolidated entity's assets and liabilities, measured or disclosed at fair value, using a three-level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
•
•
•
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly
Level 3: Unobservable inputs for the asset or liability
Consolidated – 2022
Assets
Liabilities
Contingent consideration
Total liabilities
Consolidated – 2021
Assets
Liabilities
Contingent consideration
Total liabilities
Level 1
$’000
-
-
-
Level 1
$’000
-
-
-
Level 2
$’000
-
-
-
Level 2
$’000
-
-
-
Level 3
$’000
-
3,458
3,458
Level 3
$’000
-
1,807
1,807
Total
$’000
-
3,458
3,458
Total
$’000
-
1,807
1,807
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to
their short- term nature.
The fair value of the contingent consideration is estimated by discounting the probability-adjusted profit in Stride Management Corp. at
the company’s weighted average cost of capital.
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2020
Change in contingent consideration at fair value/earnout paid
Effects of movements in foreign exchange recognised in other comprehensive income
Fair value movement recognised in profit or loss
Balance at 30 June 2021
Balance at 1 July 2021
Change in contingent consideration at fair value/earnout paid
Effects of movements in foreign exchange recognised in other comprehensive income
Additions-contingent consideration from business combination in year (Note 19)
Balance at 30 June 2022
1Weighted average interest rate 3.5%
Contingent
consideration
$’000
3,338
(1,806)
98
177
Total
$’000
3,338
(1,806)
98
177
1,807
1,807
1,807
(1,782)
(8)
3,441
3,458
1,807
(1,782)
(8)
3,441
3,458
116 Annual Report 2022
Annual Report 2022 117
Significant judgements and estimates
A key judgement by management is a 100% probability of the first tranche of contingent consideration being paid following the 30
June 2022 financial year end and a 90% probability of the second tranche of contingent consideration being paid following the 30
June 2023 financial year end.
The level 3 assets and liabilities unobservable inputs and sensitivity are as follows:
Description
Unobservable Inputs
Range
Sensitivity
Contingent consideration
Probability rate
Future profit
90% - 100%
$3,169,000
5ppt change would change the fair value by $82,000
5% change would change the fair value by $172,000
Discount rate
15.75%
1.00% change would change the fair value by $11,000
GROUP STRUCTURE
In this section
Group structure provides information about particular subsidiaries and associates and how changes have affected the financial position
and performance of the Group.
GROUP STRUCTURE
Note 19: Business combination
Note 20: Controlled subsidiaries
Note 21: Parent disclosures
Note 19: Business combination
117
117
119
120
On 1 June 2022, the Group acquired 100% of the issued share capital and voting rights of Stride Management Corp. (Stride), a company
based in Canada that conducts Project Management for Lotteries. The primary objective of the acquisition is to provide the Group an
entry point to licence its lottery software platform in the Canadian charities' lottery market.
Details of the business combination are as follows:
Fair value of purchase consideration
Cash paid on completion
Contingent consideration
Working capital settlement adjustment paid
Total consideration
Fair value of identifiable assets and liabilities at acquisition date:
Cash
Trade and other receivables
Property, plant and equipment
Leasehold improvements
Software
Customer contracts and relationships
Trade and other payables
Deferred tax liability
Net assets
Goodwill on consolidation
Stride acquisition at fair value
Cash consideration paid
Cash acquired on acquisition
Cash outflow
Acquisition costs charged to expenses
Note
19(b)
19(a)
Note
19(d)
Note
Note
19(a)
$000s
8,452
3,441
543
12,436
$000s
1,040
562
186
88
806
7,892
(575)
(2,348)
7,651
4,785
12,436
$000s
8,995
(1,040)
7,955
$000s
665
118 Annual Report 2022
Annual Report 2022 119
Significant judgements and estimates
A key judgement by management is a 100% probability of the contingent consideration being paid following the 30 June 2022
financial year end and a 90% probability of the contingent consideration being paid following the 30 June 2023 financial year end.
(a) Consideration transferred
Acquisition-related costs amounted to $665,000 are not included as part of the consideration transferred and have been recognised
as an expense in the consolidated statement of profit or loss and other comprehensive income, as part of administrative expenses with
$412,000 in FY2021 and $253,000 in FY2022.
The actual net working capital was in excess of the target working capital resulting in a working capital settlement adjustment $543,000
being paid to the vendor of Stride.
(b) Contingent consideration
The contingent consideration arrangement requires the Group to pay up to an additional undiscounted amount of CAD3,300,000
(~$3,714,000) in cash to the Stride vendor if certain Profit targets are met, to be paid in up to two instalments following the 30 June 2022
and 30 June 2023 financial year ends.
The fair value of the contingent consideration arrangement of $3,458,000 was estimated by calculating the present value of the future
expected cash flows. The estimates are based on a discount rate of 15.75% and assumed probability-adjusted profit in Stride of
CAD2,850,000 (~$3,208,000) to CAD2,886,000(~$3,248,000).
The probability-adjusted profit in Stride is recalculated at each reporting date with any gains/losses on the fair value of the contingent
consideration recognised in profit or loss.
At 30 June 2022, the fair value of the contingent consideration liability (including movements on foreign exchange translation of
$17,000) is recognised in the Statement of Financial Position as:
Current contingent consideration
Non-current contingent consideration
Total
(c) Identifiable net assets
$000s
1,820
1,638
3,458
Developed software and customer contracts and relationships have been identified as separately identifiable assets. These assets
have been valued by an independent valuer according to the cost approach/cost to create methodology for developed software and
income approach/excess earnings methodology for customer contracts and relationships.
(d) Goodwill
The goodwill that arose on the combination can be attributed to Stride’s strong position, competitive advantage and strong growth
prospects in the charities’ lottery market. No amount of goodwill is expected to be deductible for tax purposes.
(e) Revenue and profit contribution
Stride contributed TTV of $9,680,000, revenue of $618,000 and net profit of $80,000 to the Group from the date of acquisition to 30
June 2022. If the acquisition had occurred on 1 July 2021, the Group’s pro-forma TTV, revenue and net profit after tax for the financial
year ended 30 June 2022 would have been $118,167,000, $7,681,000, and $2,149,000 respectively.
Recognition and measurement
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other
assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued, or
liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For
each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of
the acquiree’s identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the consolidated entity’s operating or
accounting policies and other pertinent conditions in existence at the acquisition date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest in the
acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is recognised in
profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition date fair value. Subsequent changes in the
fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration
classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition date fair value of assets acquired, liabilities assumed and any non-controlling interest in the
acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is
recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net
assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer
on the acquisition date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-
controlling interest in the acquiree, if any, the consideration transferred and the acquirer’s previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts
recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained
about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12
months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.
Note 20: Controlled subsidiaries
The Group’s subsidiaries that were controlled during the year and prior years are set out below:
Direct subsidiaries of the ultimate parent entity Jumbo Interactive Limited:
County of Incorporation
Percentage Ownership
2022
%
2021
%
Benon Technologies Pty Ltd
TMS Global Services Pty Ltd
Intellitron Pty Ltd1
Jumbo Lotteries Pty Ltd
Jumbo Interactive Asia Pty Ltd
Cook Islands Tattslotto Pty Ltd2
Jumbo Interactivo de Mexico SA de CV
Gatherwell Limited
Jumbo Interactive UK Limited3
Stride Management Corp.4
Subsidiaries of TMS Global Services Pty Ltd:
TMS Global Services (NSW) Pty Ltd
TMS Global Services (VIC) Pty Ltd
TMS Fiji Limited
TMS Fiji On-Line Limited
TMS Global Services (PNG) Limited
Cook Islands Tattslotto Pty Ltd2
Australia
Australia
Australia
Australia
Australia
Cook Islands
Mexico
United Kingdom
United Kingdom
Canada
Australia
Australia
Fiji
Fiji
Papua New Guinea
Cook Islands
Jumbo Lotteries North America, Inc.
United States of America
1Sold 30 June 2022
2De-registered 31 March 2022
3Registered 11 January 2022
4Acquired 1 June 2022
100
100
-
100
100
-
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
1
100
100
-
-
100
100
100
100
100
99
100
120 Annual Report 2022
Annual Report 2022 121
Principles of consolidation
(b) Guarantees
The consolidated financial statements comprise the financial statements of Jumbo Interactive Limited and its subsidiaries at 30 June
each year (the Group). Subsidiaries are entities over which the Group has control. The Group has control over an entity when the Group
is exposed to, or has rights to, variable returns from its involvement with the entity, and has the ability to use its power to affect those
returns. Subsidiaries are consolidated from the date on which control is transferred to the Group and are deconsolidated from the date
on which control ceases.
The parent entity has provided guarantees to third parties in relation to the obligations of controlled entities in respect to banking
facilities. The guarantees are for the terms of the facilities per Note 17: Borrowings, and are ongoing.
The parent entity has also provided a guarantee in favour of TLC in respect of payment obligations of a subsidiary company in terms of
the Agent reseller agreements, between its subsidiary and the favouree.
All intercompany balances and transactions, including unrealised profits arising from intragroup transactions have been eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
(c) Contractual commitments
Changes in ownership interests
There were no contractual commitments for the acquisition of property, plant and equipment entered into by the parent entity at 30
June 2022 (2021: $Nil).
(d) Contingent liabilities
The parent entity has no contingent liabilities other than the guarantees referred to above.
(e) Recognition and measurement
The financial information for the parent entity, Jumbo Interactive Limited, has been prepared on the same basis as the consolidated
financial statements, except as set out below:
(i) Investments in subsidiaries and associates
Investments in subsidiaries and associates are accounted for at cost in the financial statements of Jumbo Interactive Limited. Dividends
received from associates are recognised in the parent entity’s income statement, rather than being deducted from the carrying amount
of these investments.
(ii) Tax consolidation
Jumbo Interactive Limited and its wholly owned subsidiaries have implemented the tax consolidation legislation for the whole of the
financial year. Refer to Note 4: Income tax for details.
When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair
value with the change in carrying amount recognised in the profit or loss. This fair value becomes the initial carrying value for the
purposes of subsequently accounting for the retained interest as an associate, joint venture or available-for-sale financial asset. In
addition, any amount previously recognised in other comprehensive income in respect of that entity, are accounted for as if the Group
had directly disposed of the relative assets or liabilities. This may mean that amounts previously recognised in other comprehensive
income are reclassified to profit or loss.
If the ownership interest in an associate or a joint venture is reduced, but significant influence or control is retained, only a proportionate
share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss, where appropriate.
Note 21: Parent disclosures
The parent and ultimate parent entity within the Group is Jumbo Interactive Limited.
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregated amounts as follows:
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued capital
Accumulated losses
Profits appropriation reserve
Share-based payments reserve
Available-for-sale financial asset reserve
Total shareholders’ equity
Profit for the year
Total comprehensive income for the year
2022
$’000
11,533
57,382
68,915
2,409
1,684
4,093
64,822
81,390
2021
$’000
17,511
42,580
60,091
2.497
736
3,233
56,858
80,177
(26,037)
(26,037)
6,205
5,566
(2,302)
64,822
31,094
31,094
793
4,227
(2,302)
56,858
19,409
19,409
122 Annual Report 2022
Annual Report 2022 123
OTHER INFORMATION
In this section
Other information provides information on other items which require disclosure to comply with Australian Accounting Standards
and other regulatory pronouncements however are not consider critical in understanding the financial performance or position of
the Group.
OTHER INFORMATION
Note 22: Investments accounted for using the Equity Method
Note 23: Financial assets at fair value through other comprehensive income (FVOCI)
Note 24: Related party transactions
Note 25: Key Management Personnel compensation
Note 26: Share-based payments
Note 27: Remuneration of auditor
Note 28: Summary of other significant accounting policies
122
122
123
123
124
124
128
128
Note 22: Investments accounted for using the
Equity Method
Interest in Associate – Lotto
Points Plus Inc., USA
Place of business /
Country of Incorporation
2022
%
2021
%
2022
$’000
2021
$’000
Unlisted shares
Lotto Points Plus Inc
New York, USA
30.9
30.9
Net investment in associate company
-
-
Lotto Points Plus Inc is an investment company, with its only investment being a 16.9% (2021: 16.9%) shareholding (non-voting) in
Lottery Rewards Inc., USA which was dissolved on 30 November 2020 (see Note 23(ii) for details).
Recognition and measurement
Associates are entities over which the Group has significant influence but not control or joint control. Associates are accounted for in
the parent entity financial statements at cost and the consolidated financial statements using the equity method of accounting. Under
the equity method of accounting, the Group’s share of post-acquisition profits or losses of associates is recognised in consolidated
profit or loss and the Group’s share of post-acquisition other comprehensive income of associates is recognised in consolidated other
comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment.
Dividends received from associates are recognised in the parent entity’s profit or loss, while they reduce the carrying amount of the
investment in the consolidated financial statements.
When the Group’s share of post-acquisition losses in an associate exceeds its interest in the associate (including any long-term
interests that form part of the Group’s net investment in the associates), the Group does not recognise further losses unless it has
obligations to, or has made payments, on behalf of the associate.
The financial statements of the associates are used to apply the equity method. The end of the reporting period of the associates and
the parent are identical and both use consistent accounting policies.
Note 23: Financial assets at fair value through other
comprehensive income (FVOCI)
Unlisted securities comprise investments in:
(i) Sorteo Games Inc., USA – the Company owns 7% of the issued share capital of Sorteo Games Inc. Shares in Sorteo Games Inc are
carried at fair value of $nil (2021: $nil).
(ii) Lottery Rewards Inc., USA – the Company owns 5.4%of the issued share capital of Lottery Rewards Inc – 0.2% directly and 5.2%
indirectly (through Lotto Points Plus Inc – see Note 22 for details). Lottery Rewards Inc entered an Assignment for Benefit of
Creditors on 30 November 2018 and was subsequently dissolved on 30 November 2020. Shares in Lottery Rewards Inc are carried
at fair value of $nil (2021: $nil).
Recognition and measurement
Non-current assets are classified as held-for-sale if their carrying amount will be recovered principally through a sale transaction, rather
than through continuing use. After initial recognition at cost, they are measured at fair value with gains and losses recognised in other
comprehensive income (FVOCI reserve), until the investment is disposed of, at which time the cumulative gain or loss previously
recognised in the FVOCI reserve may be transferred within equity.
Note 24: Related party transactions
Parent entity
Jumbo Interactive Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 20: Controlled subsidiaries.
Key management personnel
Disclosures relating to key management personnel are set out in Note 25: Key Management Personnel compensation and the
remuneration report in the Directors’ report.
Transactions with related parties
All transactions between related parties are on normal commercial terms and conditions at market rates and no more favourable than
those available to other parties unless otherwise stated.
The following transactions occurred with related parties:
Mr Mike Rosch, the father of Mr Mike Veverka, the CEO and executive Director of the Company, rented
an office from the Group
– office rent received
Mrs Julie Rosch, the mother of Mr Mike Veverka, the CEO and Executive Director of the Company, is
engaged as a full-time employee within the Group.
Consolidated
2022
$
2021
$
12,706
9,956
Consolidated
2022
$
2021
$
124 Annual Report 2022
Annual Report 2022 125
– salary and superannuation
Receivables from related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Trade receivables from Mr Mike Rosch (Director-related party of Mike Veverka)
Consolidated
2022
$
86,900
2021
$
86,505
Consolidated
2022
$
1,165
2021
$
1,165
Note 25: Key Management Personnel compensation
Short term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
Consolidated
2022
$
2021
$
3,208,792
2,767,859
161,164
26,792
-
151,092
34,085
-
1,274,971
945,512
4,671,719
3,898,548
Further information regarding the identity of key management personnel and their compensation can be found in the Audited
Remuneration Report contained in the Directors’ Report.
Note 26: Share-based payments
Share-based payment expenses recognised during the financial year
Options issued under employee option plan
Rights issued under employee incentives schemes
Employee option plan
Consolidated
2022
$
-
1,338,730
1,338,730
2021
$
27,960
940,161
968,121
The Jumbo Interactive Limited Employee Option Plan was ratified at the annual general meeting held on 28 October 2008. Employees
are invited to participate in the scheme from time to time. Options vest when the volume weighted average share price over five
consecutive trading days equals the exercise price and provided the staff member is still employed by the Group. When issued on
exercise of options, the shares carry full dividend and voting rights.
Options granted carry no dividend or voting rights.
Fair value of options granted
Employees
There were no options granted during the 2022 financial year.
Third parties
There were no options granted during the 2022 financial year.
Fair value of rights granted
The indicative fair value of STI rights at grant date was determined by an independent valuer using the Black-Scholes option pricing
model that takes into account the share price at grant date, exercise price, expected volatility, option life, expected dividends, and the
risk-free rate. The inputs used for the Black-Scholes option pricing model for options granted during the year ended 30 June 2022 were
as follows:
Grant date
Share price at
grant date
Exercise price
Expected
volatility
Expected
dividend yield
Risk free rate
KMP STI rights
30 June 2021
28 October 2021
$16.75
$nil
53.295%
2.18%
0.5%
The fair value of LTI rights at grant date was determined by an independent valuer using the Monte Carlo Simulation option pricing
model that takes into account the share price at grant date, exercise price, expected volatility, option life, expected dividends, and the
risk-free rate. The inputs used for the Monte Carlo Simulation option pricing model for options granted during the year ended
30 June 2022 were as follows:
Grant date
Share price at
grant date
Exercise price
Expected
volatility
Expected
dividend yield
Risk free rate
KMP LTI rights 1 July
20211
KMP LTI rights TLC
agreement2
28 October 2021
$16.75
28 October 2021
NED service rights3
28 April 2022
$16.75
$16.94
$nil
$nil
$nil
53.295%
2.18%
1.04%
53.295%
50.253%
2.18%
2.39%
0.50%
2.71%
1 LTI rights are granted for no consideration, have a three-year term, and are exercisable when the 90-day VWAP for the period up to 30 June 2024 is equal to or more than $20.17
less any dividends paid during the term.
2 LTI rights are granted for no consideration, have a term until 4 November 2023, and are exercisable when the 90-day VWAP for the period up to 3 November 2023 is equal to or
more than $16.24.
3 The NED service rights are granted for a consideration of $18.30 per right and have a time-bound vesting period only.
Expected volatility was determined based on the historic volatility (based on the remaining life of the right), adjusted for any expected
changes to future volatility based on publicly available information.
126 Annual Report 2022
Annual Report 2022 127
Details of options and rights outstanding during the financial year are as follows:
2022
Grant date
Exercise
Price
Expiry date Balance at
beginning
of year
Granted
during
the year
Lapsed/
Forfeited
during the year
Exercised
during the
year
Expired
during the
year
Balance
at end of
year
Vested and
exercisable
at end of
year
KMP and staff options
26 Oct 2017
$3.50
15 Nov 2022
600,000
Total
Weighted average
exercise price
KMP and staff rights
600,000
$3.50
1 July 20191
$nil
1 Jul 2023
46,716
30 June 20201
$nil
30 Jun 2021
23,241
29 October 20202
$nil
1 Jul 2024
17 December 2020
$nil
4 Nov 2023
15 February 2021
$nil
4 Nov 2023
30 June 20212
$nil
30 Jun 2022
92,965
40,984
17,376
16,925
-
-
-
-
-
-
-
-
-
28 October 20213
28 April 2022
28 April 2022
28 April 2022
Total
$nil
$nil
$nil
$nil
1 Jul 2025
1 Jul 2023
1 Jul 2024
1 Jul 2025
-
-
-
-
64,403
2,732
2,732
2,732
-
(300,000)
- 300,000
300,000
-
(300,000)
- 300,000
300,000
$3.50
$3.50
-
-
-
-
-
(1,393)
-
-
-
-
-
$3.50
-
(23,241)
-
-
-
(16,925)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
46,716
-
92,965
40,984
15,983
-
64,403
2,732
2,732
2,732
-
-
-
-
-
-
-
-
-
-
-
238,207
72,599
(1,393)
(40,166)
- 269,247
1 Relating to the service period 1 July 2019 to 30 June 2020 and approved by shareholders at the 2020 AGM
2 Relating to the service period 1 July 2020 to 30 June 2021 and approved by shareholders at the 2021 AGM
3 Relating to the service period 1 July 2021 to 30 June 2022 and approved by shareholders and Directors at the 2022 AGM
The 26 October 2017 options are exercisable when the Jumbo 5-day VWAP share price is equal to or greater than $4.00.
The 1 July 2019 LTI rights FY2021 are granted for no consideration, have a three-year term, and are exercisable when the Jumbo 90-
day VWAP share price for the period up to 30 June 2023 is equal to or more than $14.55 less any dividends paid during the term.
The 30 June 2020 STI rights FY2021 are granted for no consideration, have a one-year term, and are exercisable after a further one-
year lock-up period.
The 29 October 2020 LTI rights FY2021 are granted for no consideration, have a three-year term, and are exercisable when the
90-day VWAP of the Jumbo share price for the period up to 30 June 2023 is equal to or more than $14.55 less any dividends paid during
the term.
The 17 December 2020 LTI rights TLC agreement are granted for no consideration, have a three-year term, and are exercisable when
the 90-day VWAP of the Jumbo share price for the period up to 4 November 2023 is equal to or more than $16.24.
The 15 February 2021 Senior Manager LTI rights are granted for no consideration, have a vesting date of 4 November 2023 and are
exercisable when the 90-day VWAP of the Jumbo share price for the period up to 4 November 2023 is equal to or more than $16.24.
The 30 June 2021 STI rights FY2021 are granted for no consideration, have a one-year term, and are exercisable after a further one-
year lock-up period.
The 28 October 2021 LTI rights FY2022 are granted for no consideration, have a three-year term, and are exercisable when the
90-day VWAP of the Jumbo share price for the period up to 30 June 2024 is equal to or more than $20.17 less any dividends paid during
the term.
The 28 April 2022 NED service rights are granted for a consideration of $18.30 and are exercisable 1 July 2022, 1 July 2023 and
1 July 2024.
Exercise
Price
Expiry date Balance at
beginning
of year
Granted
during
the year
Lapsed/
Forfeited
during the year
Exercised
during the
year
Expired
during the
year
Balance
at end of
year
Vested and
exercisable
at end of
year
2021
Grant date
KMP and staff options
18 Nov 2015
26 Oct 2017
Total
Weighted average
exercise price
KMP and staff rights
$1.75
18 Nov 2020
100,000
$3.50
15 Nov 2022
625,000
725,000
$3.26
1 July 20191
$nil
1 Jul 2023
46,716
30 June 20201
$nil
30 Jun 2021
23,241
29 October 2020
$nil
1 Jul 2024
17 December 2020
$nil
4 Nov 2023
15 February 2021
$nil
4 Nov 2023
30 June 20214
$nil
30 Jun 2022
-
-
-
-
-
-
-
-
-
-
92,965
40,9842
(100,000)
-
-
-
-
-
(25,000)
- 600,000
600,000
(100,000)
(25,000)
- 600,000
600,000
$1.75
$3.50
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$3.50
$3.50
46,716
-
23,241
23,241
92,965
40,984
17,376
16,925
-
-
-
-
- 238,207
23,241
18,933
(1,557)
16,9253,4
-
Total
69,957
169,807
(1,557)
1 Relating to the service period 1 July 2019 to 30 June 2020 and approved by shareholders at the 2020 AGM
2 Includes 16,393 rights subject to shareholder approval at the 2021 AGM
3 Includes 7,319 rights subject to shareholder approval at the 2021 AGM
4 Awarded by the Board that relates to the service period 1 July 2020 to 30 June 2021, with 9,606 to be granted on the date of the 2021 AGM subject to shareholder approval
Recognition and measurement
The fair value of options granted to employees and consultants is recognised as an expense with a corresponding increase in equity
(share-based payments reserve). The fair value is measured at grant date and recognised over the period during which the employees
or consultants become unconditionally entitled to the options. Fair value is determined by an independent valuer using the Black-
Scholes, Bi-nominal, and Monte Carlo Simulation option pricing models as appropriate. In determining fair value, no account is taken of
any performance conditions other than those related to the share price of Jumbo Interactive Limited (“market conditions”). The
cumulative expense recognised between grant date and vesting date is adjusted to reflect the Directors’ best estimate of the number of
options that will ultimately vest because of internal conditions of the options, such as the employees having to remain with the Group
until vesting date, or such that employees are required to meet internal sales targets. No expense is recognised for options that do not
ultimately vest because internal conditions were not met. An expense is still recognised for options that do not ultimately vest because a
market condition was not met.
Where the terms of options are modified, the expense continues to be recognised from grant date to vesting date as if the terms had
never been changed. In addition, at the date of the modification, a further expense is recognised for any increase in fair value of the
transaction as a result of the change.
Where options are cancelled, they are treated as if vesting occurred on cancellation and any unrecognised expenses are taken
immediately to profit or loss. However, if new options are substituted for the cancelled options and designated as a replacement on
grant date, the combined impact of the cancellation and replacement options are treated as if they were a modification.
128 Annual Report 2022
Annual Report 2022 129
Note 27: Remuneration of auditor
During the year the following fees were paid or payable for services provided by the auditor of the parent entity and its related practices:
(b) Foreign currency transactions
(i) Functional and presentation currency
Audit services
Amounts paid/payable to BDO Audit Pty Ltd for audit or review of the financial statements for the
entity or any entity in the Group
144,108
163,854
Consolidated
2022
$
2021
$
Network firms of BDO Audit Pty Ltd
Amounts paid/payable for audit or review of the financial statements for the entity or any entity in the
Group in the UK and Canada
Taxation services
Amounts paid/payable to BDO for taxation services for the entity or any entity in the Group:
Review of income tax return
Transfer pricing consulting
Other taxation advice
Other services
Amounts paid/payable to BDO for other services for the entity or any entity in the Group:
Due diligence – other BDO-related firm
Whistleblower services
151,048
62,384
295,156
226,238
48,100
23,300
15,580
86,980
48,000
13,000
53,131
114,131
11,327
6,500
110,000
5,000
17,827
115,000
399,963
455,369
Note 28: Summary of other significant accounting policies
Other significant accounting policies adopted in the preparation of these consolidated financial statements are set out in relevant
sections of the notes below. These policies have been consistently applied to all the years presented, unless otherwise stated. Where
necessary, comparative information has been restated to conform with changes in presentation in the current year.
(a) Basis of preparation
(i) New, revised or amended Accounting Standards and Interpretations adopted
None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning
1 July 2021 materially affected the amounts recognised in the current period or any other prior period and are not likely to affect
future periods.
(ii) New accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not
been early adopted by the consolidated entity for the annual reporting period ended 30 June 2022. The consolidated entity's
assessment of the impact of the new or amended Accounting Standards and Interpretations, most relevant to the consolidated entity
is not material.
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Australian
dollars, which is the Company’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates ruling at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when
attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses are presented in profit or loss on a net basis within other income or other expenses, unless they
relate to borrowings, in which case they are presented as a part of finance costs.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when fair value
was measured.
The functional currency of the overseas subsidiaries is measured using the currency of the primary economic environment in which that
entity operates. At the end of the reporting period, the assets and liabilities of these overseas subsidiaries are translated into the
presentation currency of the Company at the closing rate at the end of the reporting period and income and expenses are translated at
the average exchange rates for the year.
All resulting exchange differences are recognised in other comprehensive income as a separate component of equity (foreign currency
translation reserve). On disposal of a foreign entity, the cumulative exchange differences recognised in foreign currency translation
reserves relating to that particular foreign operation is recognised in profit or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity
and translated at the closing rate.
(c) Financial instruments
(i) Non-derivative financial assets
The Group initially recognises financial assets on the trade date at which the Group becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been
transferred and the Group has transferred substantially all the risks and rewards of ownership.
Financial assets are initially recognised at fair value. If the financial asset is not subsequently accounted for at fair value through profit or
loss, then the initial measurement includes transaction costs that are directly attributable to the asset’s acquisition or origination. On
initial recognition, the Group classifies its financial assets as subsequently measured at either amortised cost or fair value, depending on
its business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
Refer to Note 22: Investments accounted for using the Equity Method and Note 23: Financial assets at fair value through other
comprehensive income for further details.
(ii) Financial assets measured at amortisation cost
A financial asset is subsequently measured at amortised cost, using effective interest method and net of any impairment, if:
•
•
the asset is held within the business model whose objective is to hold assets in order to collect contractual cash flows; and
the contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal
and interest.
The Group assesses at each reporting date whether there is objective evidence that a financial asset (or group of financial assets)
is impaired.
Refer to Note 6: Cash and cash equivalents and Note 7: Trade and other receivables for further details.
130 Annual Report 2022
(iii) Non-derivative liabilities
The Group initially recognises loans on the date when they originated. Other financial liabilities are initially recognised on the trade date.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
Non-derivative financial liabilities are initially recognised at fair value less any directly attributable transaction costs. Subsequent to initial
recognition, these liabilities are measured at amortised cost using the effective interest rate method.
Refer to Note 11: Trade and other payables for further details.
(d) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of GST, unless the amount of GST incurred is not recoverable from the Australian
Taxation Office (ATO), in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item.
Receivables and payables are stated with the amount of GST receivable or payable included. The net amount of GST recoverable from,
or payable to, the ATO is included as part of receivables or payables in the consolidated statement of financial position.
Cash flows are included in the consolidated statement of cash flows on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the ATO, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the ATO.
Annual Report 2022 131
UNRECOGNISED ITEMS
In this section
Unrecognised items provide information about items that are not recognised in the consolidated financial statements but could
potentially have a significant impact on the Group’s financial position and performance.
UNRECOGNISED ITEMS
Note 29: Contingencies
Note 30: Contingent Commitments
Note 31: Events after the reporting date
Note 29: Contingencies
131
131
131
131
Contingencies relate to the outcome of future events and may result in an asset or liability, however due to current uncertainty do not
qualify for recognition.
Estimates of the potential financial effect of contingent liabilities that may become
payable
Guarantees provided by the Group’s bankers
Consolidated
2022
$’000
3,100
2021
$’000
3,091
The Group’s bankers have provided guarantees to third parties in relation to premises leased by Group companies. These guarantees
have no expiry term and are payable on demand and are secured by a fixed and floating charge over the Group’s assets.
Note 30: Contingent Commitments
StarVale Group UK acquisition
On 27 January 2022, the Group announced it had entered into an agreement to acquire 100% of StarVale Group (StarVale), a UK
external lottery manager and digital payments company, for a cash consideration of A$32.1 million1 (GBP17.0 million) and up to ~A$8.5
million1 (GBP4.5 million) of deferred consideration subject to the satisfaction of certain conditions under the agreement.
The total consideration of ~A$40.6 million1 (GBP21.5 million) will be funded from available cash and a bank facility of A$30 million, with
~A$32.1 million1 (GBP17.0 million) payable on completion and up to ~A$8.5 million1 (GBP4.5 million) to be paid in one instalment following
the 30 June 2023 financial year subject to certain earnings hurdles being met.
As announced 1 July 2022, the UK Gambling Commission approval is required to complete the transaction, with such approval originally
expected to occur by the end FY2022, and now expected to be received by the end Q1 FY2023.
1 Based on exchange rate GBP0.53 = A$1.00
Note 31: Events after the reporting date
Apart from the final dividend declared and the on-market share buy-back announced on 26 August 2022, the Directors are not aware of
any matter or circumstance that has arisen that has significantly affected, or may significantly affect, the operations of the Company in
the financial years subsequent to 30 June 2022.
132 Annual Report 2022
Annual Report 2022 133
INDEPENDENT AUDITOR’S REPORT
DIRECTORS’’ DECLARATION
The Directors of the Company declare that:
1. The consolidated financial statements, comprising the Consolidated Statement of Profit or Loss and Other Comprehensive Income,
Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity and Consolidated Statement of Cash
Flows, and accompanying notes, are in accordance with the Corporations Act 2001 and:
a. comply with Australian Accounting Standards and the Corporations Regulations 2001; and
b. give a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its performance for the year
ended on that date.
2. The Company has included in the notes to the consolidated financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standards.
3. In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
4. The remuneration disclosures included in pages 55 to 74 of the Directors’ report (as part of the audited Remuneration Report), for
the year ended 30 June 2022, comply with section 300A of the Corporations Act 2001.
5. The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A
of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
Susan Forrester
Chair of the Board
Brisbane, 26 August 2022
Mike Veverka
Chief Executive Officer and Executive Director
134 Annual Report 2022
Annual Report 2022 135
136 Annual Report 2022
Annual Report 2022 137
SHAREHOLDER INFORMATION
The Company has 62,448,757 ordinary shares on issue, each fully paid. There are 13,587 holders of these ordinary shares as at
29 July 2022. Shares are quoted on the Australian Securities Exchange under the code JIN and on the German Stock Exchange.
In addition, there are 222,531 rights over ordinary shares on issue but not quoted on the Australian Securities Exchange.
Corporate Governance Statement
The Corporate Governance Statement is available on the Company's website at
https://www.jumbointeractive.com/governance/corporate_governance_statement.pdf
(a) The range of fully paid ordinary shares as at
29 July 2022
Holders Units
% of issued capital
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000 – and over
Rounding
Total
Total
8,439
2,379
305
204
28
2,789,099
5,429,111
2,262,730
4,990,416
47,603,855
11,355
63,075,211
(b) Unmarketable parcels
Minimum $500.00 parcel at $14.40 per unit
Minimum parcel size
35
Holders
340
The number of shareholders holding less than the marketable parcel of shares is 251 (shares 2,754)
(c) Substantial holders of 5% or more fully paid ordinary
shares as at 29 July 2022
Name
Vesteon Pty Ltd and associates
Notice date
5 July 2022
Selector Funds Management Ltd
22 September 2020
Ordinary Shares
Percentage Held
8,849,582
3,298,130
14.10%
5.28%
4.42
8.61
3.59
7.91
75.47
0
100.00
Units
5,185
138 Annual Report 2022
(d) Voting rights
(f) Unquoted securities as at 29 July 2022
Annual Report 2022 139
The voting rights attached to each class of equity security are as follows:
Rights over Unissued Shares. A total of 222,531 rights are on issue to employees for services rendered.
Exercise Price
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
Expiry date
1 July 2024
4 November 2023
4 November 2023
4 November 2023
1 July 2025
1 July 2023
1 July 2024
1 July 2025
Number on issue
Number of holders
92,965
24,591
16,393
15,983
64,403
2,732
2,732
2,732
4
3
1
12
4
2
2
2
(g) On-market buy-back
There is no current on-market buy-back in effect.
(h) Restricted securities
There are no restricted securities or securities subject to voluntary escrow (outside of an employee incentive scheme) that are on issue.
Ordinary shares
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote
on a show of hands.
Options and Rights over Unissued Shares
Holders have no voting rights until their options/rights are exercised.
(e) Top 20 holders of fully paid ordinary shares as at
29 July 2022
Name
Units
% of Units
1. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2. J P MORGAN NOMINEES AUSTRALIA PTY LTD
3. VESTEON PTY LTD
4. CITIBANK NOMINEES LIMITED
5. NATIONAL NOMINEES LIMITED
6. BNP PARIBAS NOMS PTY LTD
7. BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
8. MR BARNABY COLMAN CADDICK
9. MR MIKE VEVERKA
10. BERGADE INVESTMENTS PTY LTD
11. BNP PARIBAS NOMINEES PTY LTD
12. SEYMOUR GROUP PTY LTD
13. BNP PARIBAS NOMINEES PTY LTD
15. MASFEN SECURITIES LIMITED
16. MR JOHN ROSAIA
17. BNP PARIBAS NOMS (NZ) LTD
18. BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
19. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
20. WESTOR ASSET MANAGEMENT PTY LTD
Total Top 20 shareholders of ordinary fully paid shares
Total remaining holders balance
11,040,860
9,607,891
8,108,988
5,491,012
2,908,366
2,610,045
1,661,473
1,125,000
666,791
604,397
463,686
400,000
343,348
264,353
245,000
216,430
201,936
200,818
193,689
169,497
17.50
15.23
12.86
8.71
4.61
4.14
2.63
1.78
1.06
0.96
0.74
0.63
0.54
0.42
0.39
0.34
0.32
0.32
0.31
0.27
46,523,580
16,551,631
73.76
26.24
140 Annual Report 2022
COMPANY INFORMATION
Jumbo Interactive Limited
ABN 66 009 189 128
www.jumbointeractive.com
Directors
Susan M Forrester (Non-Executive Chair)
Sharon A Christensen (Non-Executive Director)
Giovanni Rizzo (Non-Executive Director)
Mike Veverka (Executive Director and Chief Executive Officer)
Chief Financial Officer
David Todd
Company Secretary
Graeme Blackett (Company Matters)
Registered Office
Level 1, 601 Coronation Drive, Toowong, QLD 4066
Telephone: 07 3831 3705
Facsimile: 07 3369 7844
Auditor
BDO Audit Pty Ltd
Level 10, 12 Creek Street, Brisbane, QLD 4000
Share Registrar
Computershare Investor Services Pty Ltd
Level 1, 200 Mary Street, Brisbane, QLD 4000
Telephone: 07 3237 5999
Facsimile: 07 3221 9227
What a
year!
Jumbo Interactive Limited
Level 1, 601 Coronation Drive
PO Box 824
Toowong, Queensland, 4066
Australia
+61 7 3831 3705
www.jumbointeractive.com
This report is printed by an accredited ‘Australian Green
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