Annual
Report 2023
Jumbo creating
positive social change
through making lotteries easier
Jumbo Interactive Limited
ABN 66 009 189 128
2
3
Welcome to the Jumbo Interactive
2023 Annual Report
Contents
Jumbo Interactive Limited (Jumbo) and its subsidiaries (Group) would like to acknowledge the Turrbal and Yuggara
People, the traditional custodians of the land on which our global business was founded. We pay our respects to
elders past and present, the keepers and storytellers of First Nations customs and culture. We would also like to
extend our respect to Aboriginal or Torres Strait Islander people engaging with this report.
Across the seas, we would also like to acknowledge the Blackfoot Confederacy, including the Siksika, Piikani and
Kainai Nations; the Stoney-Nakoda Nation; and the Tsuut’ina Nation, upon whose land our subsidiary, Stride
Management Corp, operates.
About this report
The FY23 Annual Report has key information about our financial, non-financial, and
sustainability performance for the reporting period 1 July 2022 to 30 June 2023.
Certain relevant events that have occurred after the end of this reporting period but
before publication of the Annual Report have also been included. All dollar values
shown in this report are in Australian dollars (A$) unless otherwise stated. For a
holistic view of the Group’s performance, this report should be read in conjunction
with the following reports available on our website – www.jumbointeractive.com:
Sustainability
Report
Corporate
Governance
Statement
Investor
Presentation
Media Release
About Jumbo
Financial highlights
Message from our Chair
Message from our
CEO and Founder
Senior leadership group
Our history
Our strategy
Our businesses
Lottery Retailing
Software-as-a-Service
Managed Services
Directors’ Report
Operating and Financial Review
Remuneration Report
4
5
6
8
10
11
12
17
18
24
27
34
44
52
Auditor’s Independence Declaration
71
Financial Report
Independent Auditor’s Report
Shareholder Information
Company Information
72
129
134
137
Annual Report 2023 Annual Report 2023
4
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 create positive social impact
through making lotteries easier and our vision
is to become the number one choice in digital
lottery and services around the world.
Our innovative and player-centric approach to digital
lotteries and online retailing make us the platform of
choice for more than four million active players and
more than 14,000 good causes. Our platform and
superior player experience is scalable and caters for
causes ranging from local causes to large state lotteries.
Jumbo was founded by Chief Executive Officer
(CEO) Mike Veverka in 1995 with a single computer
and listed the business on the ASX in 1999. Since
then it has matured into a leading digital lottery
retailer and lottery software provider with over 250
employees across Australasia, the United Kingdom
(UK) and Canada. In FY23, Jumbo helped raise over
$235m for good causes for our charity partners1.
Business mix (based on FY23 revenue)
Cha
rit
i
e
s
LOTTERIES
StarVale
G
o
v
e
r
n
ment
TTV5
$851.9m
29.1% YOY
Revenue
$118.7m
13.9% YOY
Underlying NPAT5
$33.1m2.8% YOY
Free cash flow2
$54.6m
23.6% YOY
Active players1
4.0m39.2% YOY
Underlying EBITDA5
$58.9m
6.9% YOY
Underlying NPATA3,5
$35.3m
8.5% YOY
Underlying EPSA3,5
56.1cps
7.8% YOY
Cash balance4
Dividend declared
$53.2m
22.8% YOY
43.0cps
1.2% YOY
1. Return to cause funds raised by our charity partners, excluding state-based lottery taxes from Lotterywest and The Lottery Corporation.
1. Players who made a purchase over the 12 months to 30 June 2023.
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.
3. Net Profit After Tax / Earnings Per Share before amortisation of acquired intangibles.
4. $15m debt drawn to fund the acquisition of StarVale fully repaid by 30 June 2023
5. These are non-IFRS measures and are not audited.
Annual Report 2023 Annual Report 2023 6
7
Message from our Chair
Dear Shareholders
This year, Jumbo has been steadfast in its execution of our long-term growth
strategy. Lotteries remain a category that has proven resilient to economic
downturns, even in the current environment of high inflation and interest rates.
Our mission is to create positive social impact
At Jumbo we create positive social impact by
making lotteries easier. We are conscious of our
impact on our immediate stakeholders – including
players, clients, employees and shareholders – and
proud of the important contribution we make to
the broader community by making lotteries easier
for good causes within the charitable sector.
The essence of our strategy has not changed: we are
focused on maximising our Lottery Retailing segment in
Australia and replicating our capabilities and learnings
into other jurisdictions. Over time, we also aim to
unlock incremental Total Addressable Market (TAM)
opportunities by diversifying our propositions and building
new capabilities in new sectors and geographies.
Acquiring Stride and StarVale
Jumbo completed the acquisition of Stride in
June last year, and now has a strong foothold to
expand into other Canadian provinces. In November
2022, we completed the acquisition of StarVale
to build scale in the UK by complementing our
Gatherwell business which we bought in 2019.
In October 2022, I took the opportunity to meet with our
Stride team in Calgary. The time spent accelerated
my understanding of their local business operations
and allowed time to get to know our leadership teams
and discuss execution of their strategic plans. Further
in June this year, I also met with our StarVale team in
Lancaster and our Gatherwell team in Manchester.
With so much time over the prior years spent on
Zoom meetings, it was truly rewarding to meet our
extended Jumbo teams on their ‘turf’ and to share our
vision and to ensure that our Jumbo values are lived
and breathed. We continue to be impressed by the
quality and growth potential of these businesses. Their
regulatory environments are similar to Australia and we
see significant opportunities to grow in these markets.
Our performance
FY23 adds another year of solid revenue, earnings
and cashflow performance to our track record of
delivering for our shareholders. Despite a 9% reduction
in the average value per jackpot, Lottery Retailing
delivered a resilient performance with both revenue
and EBITDA up marginally. The Group result also
benefitted from the contribution from Stride and
StarVale, and disciplined cost management.
The Board has declared a final ordinary dividend
of 20.0 cents per share, fully franked. This brings
the total dividend for FY23 to 43.0 cents per
share. This reflects a dividend payout ratio of
85.7% of statutory Net Profit After Tax (NPAT).
Developments in the global lottery sector
The heightened interest in lotteries as an asset class
continued this year with Aristocrat proposing to acquire
Neogames in May, following the sale of Scientific
Games’ lotteries and the demerger of the Tabcorp
lotteries last year. These developments drive a deeper
understanding of lotteries as an asset class – and this
outcome is fundamentally positive for the lottery sector.
Along with Mike and members of our senior
leadership group, I had the pleasure of attending
the World Lottery Summit in Vancouver in October
last year where I took the opportunity to meet with
the major global operators in the lottery sector.
I was genuinely humbled by the huge level of
international respect Jumbo has earned in the
sector for our best-in-class software and leadership,
and the strong relationships we have with the
industry, including The Lottery Corporation.
Our focus on strong governance
In a regulated industry like ours, strong governance,
conduct, and ethical behaviour are prerequisites
for doing business, especially when working
across multiple jurisdictions, as we do.
In October last year, we realigned responsibilities for
corporate compliance within the Group and enhanced
both our legal and internal audit resourcing.
We are not immune from the heightened scrutiny
being experienced by the gaming sector, yet
we are seeing some recognition that lottery
services, particularly those offered by charitable
organisations, pose a low risk of societal harm.
Pleasingly, lottery services are not included in the
upcoming suite of legislation that proposes to ban the
use of credit cards for online wagering in Australia and
ban online gambling advertising across all media.
Similarly, the measures proposed in the UK
government’s white paper on modernising
the UK Gambling Act for the digital age, do not
significantly affect Jumbo’s existing operations.
“In a regulated industry like ours, strong
governance, conduct, and ethical
behaviour are prerequisites for doing
business, especially when working
across multiple jurisdictions, as we do.”
While our best-in-class lottery software
combined with our marketing expertise
has led to strong active player and
ticket sales growth over the years,
our priority is always the welfare of
our players. Through our world-class
technology, we deliver a fun and safe,
industry-leading play experience.
Conclusion
On behalf of the Board, I thank all
our clients, partners, players and
shareholders for their trust and ongoing
support. I sincerely acknowledge the
entire Jumbo team, including our people
at Gatherwell, Stride and StarVale, for
their dedication and commitment
and for making Jumbo the vibrant
and innovative company it is today.
The Board is enthusiastic about the
opportunities ahead and our ongoing
ability to create positive social change
through making lotteries easier.
Susan Forrester AM
Chair and Independent
Non-Executive
Director
Sustainability
As a Board, we take a longer-term
view on Environmental, Social and
Governance (ESG) topics. Last
year we released our inaugural
Sustainability Report (FY22) identifying
our sustainability priorities, specific
targets, and timeframes.
In FY23 we achieved 40% gender
diversity at both the Board and Group
level. We also lodged our application
to Climate Active Certification and
expect to achieve Climate Active
Certification for FY2022 imminently.
Lottery Retailing customer satisfaction of
89% fell slightly short of the 90% internal
target we set ourselves, but remains
well above the industry average.
In a company first, Jumbo was globally
recognised as a Great Place to Work
this year and Jumbo is an attractive
destination for top technology talent.
To retain our staff, we offer best in
class tools, varied and interesting
projects and a great culture.
Our Reflect Reconciliation Action Plan
is endorsed by Reconciliation Australia,
and we are partnering with external
cultural educators to raise awareness
and celebrate First Nations cultures.
We are proud to showcase local
Yugambeh artist, Chad Briggs’ artwork
in this year’s Sustainability Report.
More than ever, data protection, cyber
risk and resilience are among the most
discussed topics around the Board
table. The executive leadership team
and Board work closely to stay abreast
of emerging data security regulation
and best-practice trends to maintain
the integrity of our service offering
and create a safe and trustworthy
environment where customers can play
with confidence. We have increased
the training for Board and Executives
on cyber matters including the use of
independent subject matter experts.
Board of directors
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
Annual Report 2023 Annual Report 2023 8
9
Message from our
CEO and Founder
Dear shareholder
Jumbo started with a single computer in 1995, and we patiently explored
e-commerce opportunities before finding a niche in digital lotteries in 1999.
Today we provide our proprietary lottery software
platforms and lottery-management expertise to
government and charity lotteries around the world.
Our mission is to create positive social impact through
making lotteries easier, and we aim to be the number one
choice in digital lottery and lottery services globally.
With the acquisitions of Stride and StarVale completed in
June and November 2022, we have established a strong
foundation for growth in Canada and the UK. Together
they add approximately 1.5 million active players to Jumbo
and in FY23 have contributed $15 million in revenue.
From 100 employees predominantly based in Brisbane in
2016, we have grown to more than 250 people operating
across three continents. We still see enormous opportunity for
growth in digital lotteries based on digital adoption in other
industries such as banking, music, accommodation, housing
and car sales. So far, we have only scratched the surface of
potential demand, especially in the charity lottery sector.
Strong track record of performance
This year our nimble operating model proved its worth. Good
cost discipline and four Powerball jackpots greater than $100
million offset the impact of an unfavourable run of jackpots in
the first and third quarters of FY23, resulting in us exceeding our
original margin guidance. Both Stride and StarVale delivered
solid revenue growth on a proforma basis and continue to
perform in line with our expectations. Our balance sheet
remains strong. At 30 June 2023, we maintained a healthy cash
position with approximately $53 million in available liquidity to
support growth. Together with our existing debt facility of up to
$47 million, this provides capacity for further strategic growth.
Lottery Retailing
The jackpot environment for FY23 has been volatile to say
the least. The subdued frequency of large jackpots during
Q1 and Q3 has caused some of the weakest quarterly
sales seen for over three years. Conversely, across Q2
and Q4, there were four jackpots greater than or equal
to $100 million – a jackpot size that has only happened
twice previously in Powerball’s 27-year history.
The $160 million Powerball in October 2022 is now our
best draw to date, with sales exceeding the $120 million
Powerball in February 2022. We signed up almost ~59,000
new players and the platform performed exceptionally
well with 100% uptime. We broke records for signups,
checkouts and tickets sold per second. This performance
is testament to our work and focus on building a best-in-
class lottery platform, and the importance of continuing
to get even better and faster going forward.
Over the last two decades, lotteries, particularly draw-based
games, are an asset class that has proven to be resilient
to economic downturns, delivering solid and consistent
growth. Digital penetration has trended higher over the last
decade, with strong annual increases since FY2018. Australia
currently sits at 38.4% digital penetration for lotteries. This
compares to 45% in the UK and well over 50% in some
European countries. Our view is that the trend towards
purchasing lottery tickets online will continue, bringing
digital lotteries to a broader and younger audience.
Software-as-a-Service (SaaS)
Our SaaS segment provides a software-only solution to
sizeable clients, such as government and large charity
lotteries. It continues to grow strongly. We were delighted to
extend our relationship with Mater Foundation, one of our first
Powered by Jumbo clients. Under new agreements, Mater
will continue to use our platform until 2028. Both programs
have experienced significant growth since transitioning
onto our platform and have raised much needed funds for
community benefit. We are working closely with Lotterywest
to enhance the digital offering in Western Australia.
We still devote most of our engineering effort to Lottery
Retailing and our existing Australian SaaS clients. The
Powered by Jumbo platform is powerful, flexible, scalable,
and optimised for digital channel performance. We are
confident that our platform and expertise are relevant and
transferable to government and charity lottery operators
internationally, although this is likely to be a medium-term
prospect. Over time, we expect more Stride and StarVale
lottery clients will utilise Powered by Jumbo to unlock further
growth, particularly as they increase their scale and become
more sophisticated in player acquisition and retention.
Managed Services
Our Managed Services segment provides software
and additional services such as marketing, customer
services, and draw management to smaller clients. Since
acquiring Stride and StarVale in 2022, we have focused on
integrating them into our operating structure and ensuring
clear roles and accountabilities for performance.
Stride continues to perform well in its home provinces of
Alberta and Saskatchewan and recently secured a gaming
license in British Columbia. Stride has also applied for a
gaming license in Ontario, the most populous province
in Canada. With more than three times the population of
Alberta and Saskatchewan, British Columbia and Ontario are
compelling opportunities to expand Stride’s client base.
Our focus for StarVale is enhancing business
development capabilities and identifying synergies
across Jumbo’s broader UK footprint. The business
continues to perform well, winning several new clients
and maintaining an enviable level of client retention.
Gatherwell had a weak year due to the more normalised
operating conditions after COVID restrictions and delays
inducting new clients. Following changes to their operating
model to improve accountabilities and accelerate conversion
of the pipeline, I’m pleased to see the business has traction with
active weekly tickets returning to growth in the fourth quarter.
In Australia, we have refined the Jumbo Fundraising operating
model to focus on the services valued most by our clients:
our best-in-class lottery software, our sector and regulatory
knowledge, and our player support. This approach has
helped Jumbo win new clients including an extension of the
Paralympics sponsorship and lottery management agreement.
Across our Managed Services clients in the UK,
Canada and Australia, we are now supporting over
14,000 charities and good causes, and helping them
raise important funds to support their mission.
Leadership changes
In mid-July 2023, the company Chief Financial Officer
(CFO) David Todd advised the Board of his intention to
resign due to unforeseen personal health reasons. David
has been with Jumbo for 16 years and will continue in the
CFO role until a suitable replacement is appointed and a
smooth transition completed. A comprehensive recruitment
process is underway, considering both internal and
external candidates: we expect to announce the new CFO
in the second quarter of FY2024. The Board, management
team, and all our staff across Australia, Canada and the
UK wish him and his family the very best for the future.
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 payouts are lower than for commercial lotteries.
In FY23 we prioritised the following areas to make
good progress on our sustainability agenda:
B Community - we design software platforms and lottery
management services that minimise the effort required to
manage a lottery and maximise the funds raised for our
charity partner’s cause.
B Players - we ensure our player experience is fun and safe,
by focusing on player protection measures, including
responsible play, data protection and cyber resilience.
B People - we nurture our vibrant workplace culture and
offer a unique employee value proposition to our talented
team and the potential employees. We are committed to
Diversity, Equity, Inclusion, and Belonging.
B Environment - we expect to achieve Climate Active
Australia accreditation and carbon neutrality using carbon
offsets, and have reviewed our longer-term environmental
targets. As a digital lottery specialist, we offer our players a
means to participate in lotteries in a fun and engaging way
while minimising our impact on the environment.
The initiative that I’m especially proud of this year was the
launch of Jumbo University (JU). The purpose of JU is to support
our employee’s professional growth by giving them access
to a market-leading learning platform and empowering
them to expand their skillset. This helps our staff to grow
and leads to improved performance, collaboration and
innovation for Jumbo as a whole. Over time as JU matures, it
will expand to include ‘Faculties’ specialising in department-
specific curriculums that are core to Jumbo’s success.
Advances in Artificial Intelligence
AI has held a particular fascination for me since I first
experimented with neural networks in 1995. The potential to
greatly enhance what software could do was truly exciting.
However the limited computing power pre-2000 made
it more science-fiction than a genuinely useful tool.
Fast forward to today and steady progress in software
design, networking technologies and computing power
have brought AI closer to reality. In 2017 a breakthrough in
Large Language Models paved the way for a new breed of
generative pre-trained transformer models and in 2020 I was
fortunate enough to be part of the private beta for OpenAI’s
GPT-3. To say I was excited would be an understatement.
In 3 short years GPT-3 continued to evolve and the latest
version - ChatGPT - has demonstrated the potential to
a much wider audience. However with power comes
responsibility. Just like a pilot needs years of training to
operate an aircraft safely, AI will need appropriately trained
operators and regulated safety guardrails to be used safely.
At Jumbo, our engineering team has applied numerous
technological breakthroughs over the years in a controlled
manner. The popularisation of the world wide web and
mobile devices as well as technical breakthroughs
in server capacity and stability have all played a
crucial role in our mission to make lotteries easier.
AI will be no different. Machine Learning (a subset of
AI) has already been in use for the past 3 years and is
evolving at a rapid rate. Our players are finding the games
easier to play and our partners are finding lotteries easier
to administer even as ticket sales continue to rise.
Thank you
In July 2023 we transitioned our teams from a remote-
first to a hybrid work model. It has been great to connect
with so many of our staff in person and already we have
observed an uplift in productivity and engagement.
I would like to take this opportunity to welcome all our
staff from Stride and StarVale to Jumbo and thank their
founders, Dean Faithfull and Phil Magleave, for their
leadership and counsel throughout the transition. I’d also
like to acknowledge the contribution of our hard-working
and dedicated Jumbo people to another successful year.
Finally, we appreciate the confidence of our shareholders
whose support allows us to invest in making Jumbo the
number one choice in digital lottery and services globally.
Mike Veverka
Chief Executive Officer
and Founder
Annual Report 2023 Annual Report 2023 10
11
Senior leadership group
Our history
Executive key management personnel
1995
B Mike Veverka founds Squirrel
Software Technologies with a
single PC
1999
B Jumbo listed on ASX as an
e-commerce business
2001
B Jumbo started selling charity
art union lottery tickets online
Mike Veverka
Xavier Bergade
Brad Board
Abby Perry
David Todd
Chief Executive Officer
Chief Technology Officer,
Chief Operating Officer,
Chief People Officer,
Chief Financial Officer,
and Founder
joined January 2000
joined May 2001
joined September 2016
joined October 2007
2011
B Jumbo signs 5 year
agreement with SA Lotteries
2008
B Jumbo signs 5 year
agreement with
NSW Lotteries
2005
B Jumbo acquires Ozlotteries.com
Senior leadership group
Angie Cheung
Michael Driver
Patrick Gordon
Rick Hansen
Colin Hili
Head of Finance
Head of Commercial
Head of Growth
Head of IT Infrastructure
Head of Product
Lauren Hook
Jatin Khosla
Ian McLean
Chris Perry
Tiffany Rose
Head of Risk,
Head of Investor
Head of Operations
Head of Engineering
Head of Legal
Sustainability, and
Relations
Internal Audit
Business leaders
2013 - 2017
B Rebuilt proprietary digital
lottery platform
2017
B Tatts Group Limited takes
an equity stake in Jumbo
2018
B Powerball major
game change
2021
B Announced first Canadian
ELM acquisition – Stride
B 1st UK SaaS client (St Helena
Hospice) goes live
2020
B Extended reseller
agreements with Tabcorp
for 10 years 1
B Implemented new
operating model (launch
of SaaS and Managed
Services segments)
B 1st AU government SaaS
client (Lotterywest) goes
live (December 2020)
2019
B Acquired first UK ELM –
Gatherwell Ltd
B 1st AU SaaS client (Mater)
goes live
B Commenced selling Set For Life
2022
B Announced second UK ELM
acquisition - StarVale
B Record $160m
Powerball jackpot
B Step up of investment in the
business to prepare for future
growth and acquisitions
2023
B Mater extends SaaS agreement
B Stride achieves final earnout milestone
B StarVale achieves final earnout milestone
2024
B Final step up in
service fee payable
to TLC2
Susan Fozard
Levi Putna
Shane Simmons
Phil Wright
General Manager -
General Manager -
President -
General Manager -
StarVale
OzLotteries
Stride
Gatherwell
1. Post extension of reseller agreements, Tabcorp sells equity stake in Jumbo
2. Pursuant to the Reseller Agreements with TLC dated 25 August 2020, a ‘stepped-up’ service fee is payable in the subscription cost of the tickets purchased at 1.5% FY2021, 2.5%
FY2022, 3.5% FY2023, and 4.65% FY2024 and thereafter. If the subscriptions exceed $400,000,000 in any applicable financial year, then a service of 4.65% applies to
the excess amount.
Annual Report 2023 Annual Report 2023 12
13
Our strategy
A clear strategy to deliver value for
all our key stakeholders
Jumbo is on a mission to create positive social impact through
making lotteries easier. Our vision is to be the number one
choice in digital lottery and services.
To deliver our strategy and move further towards our vision, we have three key strategic pillars:
B Maximise the potential of our existing businesses and proposition portfolio,
particularly the Australian Lottery Retailing segment.
B Replicate best-practice operations and learnings from Lottery Retailing into our
other operating segments and build for global scale.
B Diversify the portfolio to unlock incremental Total Addressable Market (TAM)
opportunities and create new revenue streams.
The lottery management expertise Jumbo has developed over the last 25 years and our
world-class approach to technology and software underpin the success of our strategy.
Mission
To create positive social impact through making lotteries easier
Vision
To be the number one choice in digital lottery and services
Strategic
pillars
Maximise
Potential of our existing
businesses and proposition
portfolio
Replicate
Best practice operations and
build for global scale
Diversify
Portfolio to unlock incremental
Total Addressable Market
(TAM) opportunities
Enablers
Lottery management
expertise
Lead on governance
and player protection
World-class approach
to technology and
software
Outcomes
Shareholders
Top quartile TSR1
Targeted dividend
payout ratio of 65% to
85% of statutory NPAT
Players
People
Community
Best player experience
and advocacy
Maximised community
benefit from funds raised
Top quartile employee
engagement
A Great Place to Work
A socially responsible
and sustainabl e
business, with positive
social impact
1. Total Shareholder Return vs S&P/ASX300 Accumulated.
Annual Report 2023 Annual Report 2023 14
15
Servicing the full lottery
management value chain
Growing active players provides the
foundation for growth
Jumbo has three operating segments.
B Lottery Retailing principally operates in Australia and includes the
sale of lottery tickets digitally through Oz Lotteries.
B The SaaS and Managed Services operating segments were
created in 2020 following the rebuild of our proprietary lottery
platform and decision to expand globally. Jumbo’s aspiration is
to grow these segments to rival that of Lottery Retailing over time.
Reseller1
Software only
Software plus services
Lottery Retailing
Jumbo is an authorised reseller
of Australian digital lottery
tickets through Oz Lotteries.
Software-as-a-
Service (SaaS)
We license our ‘Powered by
Jumbo’ (PBJ) digital lottery
platform as a solution to
government and charity lottery
operators in Australia and
globally.
Managed Services
We provide our lottery
platform and lottery
management services to
charities and worthwhile
causes that are looking to
establish a lottery program or
enhance an existing program.
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, and 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 and Canada via our Managed
Services segment. The growth in Managed
Services has been a result of the acquisitions
of Gatherwell in November 2019, Stride in June
2022, and StarVale in November 2022.
Active players who made a purchase in the 12-month period
2.3x Includes contribution from Lottery Retailing only
Includes contribution from SaaS and Managed Services
333k
376k
354k
438k
762k
1.0m
1.8m
2.9m
4.0m
LOTTERIES
StarVale
Australia
United Kingdom
Canada
1. Jumbo is an authorised reseller of lottery tickets via Reseller Agreements with The Lottery Corporation Limited (TLC). In August 2020, Jumbo extended its long
running Reseller Agreements with TLC for a further 10 years to August 2030. The Reseller Agreements do 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 applicable members of the Jumbo Group under the Reseller
Agreements with TLC.
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY221
FY231
1. Stride active players restated to align with Group methodology (551k in FY22 versus ~750k previously). StarVale active players estimated for FY23 (975k).
Annual Report 2023 Annual Report 2023 16
17
Our businesses
Large, growing and underpenetrated
serviceable available market
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.
We also continue to closely monitor the
government sector in the US where iLottery
remains an under-developed segment of the
broader lottery market. 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 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, enhancing
players and keeping them active – in turn
satisfying our lottery partners and minimising
our contract risks.
Total Addressable Market (TAM)1
Serviceable Available Market (SAM)2
AU 1%
US 20%
$685bn
UK 2%
CAN 2%
AU 2%
UK 5%
CAN 2%
CAN 20%
AU 22%
$10.3bn
US 8%
UK 35%
AU 15%
US 66%
Government
Charity
$10.3bn
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
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)
Lottery Retailing 20%
SaaS 30%
Managed Services 50%
Annual Report 2023 Annual Report 2023 18
19
Lottery Retailing
At the heart of Lottery Retailing is our best in class
lottery software and user experience.
Our best-in-class lottery software allows us to easily handle the peak ticket
sales volumes associated with very large draws: while our laser focus on the
player experience ensures we maximise player engagement and retention.
Jumbo’s advantage comes from our dual role as both developer and client of
our own software. Our experience using our own software platform in Lottery
Retailing enables us to solve problems for ourselves, as well as our SaaS clients.
Our platform is complemented by modern
technology and integrations.
We have invested significantly in data analytics tools, Artificial Intelligence (AI)
and machine learning to deliver a more personalised, engaging, and entertaining
player experience that drives retention, loyalty, and advocacy. We can analyse the
behavioural and transactional data of players through best-in-class third-party apps
that seamlessly integrate with our platform. Our agile and experiment-based approach
to innovation allows us to identify, test and measure new methods and iterate quickly.
Best in class lottery software and player experience
Best in class lottery software
B >$50m invested over the last 10 years
B Secure, stable and efficient – ability to handle tidal
demands of lottery jackpot cycles
B ISO 27001 certified with highest standard of security and
player protection
B >90% of engineering effort on product roadmap, R&D
We offer a best-in-class user experience
B Time and energy in researching player needs, enhancing
convenience
B A relentless focus on continuously improving the player
experience and minimising friction
B Significant investment in modern technology tools (AI,
machine learning etc) to drive personalisation
Experimentation
Hundreds of Integrations
Personalised product
Complex experiments (backed by
Customer data pipeline allows
data) with our player experience to
challenge bias/assumptions
hundreds of possible integrations –
top-of-class marketing, analytics,
CRM platforms etc.
recommendations
Machine learning to provide
real-time, personalised
recommendations
Minimises friction and
maximises up-sell
We have more ways to win
B Unique product portfolio with:
B Commercial lottery games
B 9 charity-based lottery
games supporting
great causes
Innovative features/ways
Player support and
to play
B Unique features such as
Lotto Party
B First digital retailer to offer
Autoplay
B Personalised number pages
B 0-touch subscription mechanism
protection
B ~90% customer satisfaction
B 87% of calls answered within 60
seconds
B Access to a real person
B Real-time monitoring of ticket
sales for problem gambling
Behavioral Analytics
Player-centric Innovations
Capture data on critical
Ability to iterate on new features
player journeys
faster and smarter than before
Create personalised
onboarding journeys
Annual Report 2023 Annual Report 2023
20
21
Our success to date is underpinned by our
unique, modern technology culture and an
unrelenting focus on the player experience.
Data led;
player focused
B Invest in best-in-class tools and
staff training
B Log data and have the tools to
monitor trends
and extract insights
B Common data architecture and
discipline around data quality
and integrity
Opinionated
but agnostic
B Discovery - we understand as
much as possible before making
large commitments
B Innovative Thinking - we build
in scope for failure and quick
learnings
B Test Everything - research is
great, but real-world
execution is what counts
Sustainable
growth loops
B Focus on scalability with a dedicated
growth team
B Disciplined focus on Return on
Advertising Spend (ROAS)
B Use of AI and programmatic marketing
Scalable
B Steady, incremental growth
and value creation
B Significant operating leverage
generated as TTV grows against a
stable cost base
B Efficiencies generated from software
and increased use of automation
Insight driven
development and
iteration
B Dedicated teams to identify the
right problems to solve
B Significant time and effort
invested in collecting insights
B Lotto Party is a great example
of this process
Hybrid work
B Asynchronous work practices
(3 continents, 6 time zones)
B Strong employee engagement as
well as access to a greater
talent pool
B Cloud tooling
Record-breaking $160 million Powerball
Key stats from $160m Powerball (Oct-22)
706,650 tickets sold
59k sign ups
1,283 tickets sold per
minute (peak)
100% uptime over the
draw event (full service
availability)
>13 signups per second
during peak (47k new
signups within 24 hours)
>10% sales uplift
compared to $120m
draw in Feb 2022
>58 checkouts per
second during peak
>69 tickets sold per
second during peak
>2,450 support
interactions on draw
day: 89% satisfaction
(only 10 calls had a wait
time > 2 mins)
>11k prize withdrawals
processed from the
platform
Record breaking ticket sales during
last day of Powerball $160m
Hourly sales for the second last day
(26 October 2022)
Hourly sales for the last day
(27 October 2022)
12am 1am 2am 3am 4am 5am 6am 7am 8am 9am 10am 11am 12pm 1pm 2pm 3pm 4pm 5pm 6pm 7pm 8pm 9pm 10pm 11pm
Annual Report 2023 Annual Report 2023
22
Annual Report 2023
Harnessing Artificial Intelligence
We are at the beginning of a significant transformation
led by Artificial Intelligence (AI).
The recent rapid adoption of AI is due to the
emergence of advanced Natural Language Models
(NLM) that are widely accessible and have prompted
widespread experimentation and pilot projects.
As a software company, Jumbo has always been
an early adopter of new technology and for several
years we have been conducting experiments with AI.
Our goal is to be well positioned to capitalise
on its potential to add value to Jumbo, and
well prepared for the ethical considerations
that this technology may raise.
However, as we have seen with previous waves of
revolutionary technology, it will take time, effort,
and a long-term investment to attain substantial
value from transformational technology like this.
Customer Support
The use of AI in customer service has seen
significant growth, and the potential is enormous.
AI-driven chatbots have risen to become the
first point of contact for customer queries and
support. These AI-enabled software tools are
designed to mimic human interactions and
promptly respond to customer questions.
With the incorporation of Natural Language Processing
(NLP) techniques, chatbots are adept at understanding
and interpreting customer questions. This enables them
to supply information, direct customers to appropriate
solutions, and perform tasks for the customer.
Chatbots provide a plethora of advantages as
first-line support agents. They can simultaneously
manage a large quantity of customer queries,
ensuring swift responses and reducing customer
waiting times, while forwarding more complex queries
to their human colleagues when necessary.
Chatbots are free from the resourcing constraints
of traditional customer support functions. They
can provide instant support to customers 24
hours a day, 7 days a week and can scale up
endlessly to service peak demand – such as those
experienced during significant jackpot events.
Marketing
Machine Learning (ML) is a subset of AI known for
its proficiency in pattern recognition, prediction,
data classification, and decision support.
At present, we are working to use ML to analyse player
behaviour and develop predictive models. These models
play a crucial role in guiding our marketing strategies by
helping us allocate our marketing budgets effectively.
ML also enables us to shift from conventional
campaigns and gain a deep-rooted understanding
of player attrition propensities based on their buying
patterns. For instance, we can deduce that a regularly
active player who abruptly halts engagement for a
period of 3-4 days is more likely to discontinue their
interaction, compared to someone who purchases
less regularly but takes a hiatus for a full week.
Over the past few years, we’ve been incorporating ML
into our marketing and data-handling procedures:
we’ve deployed ML for generating product
recommendations and have seen a significant
increase in uptake for products recommended.
In addition to using ML, we’ve been exploring the use
of generative AI tooling for copywriting and image
generation. This technology allows us to create
content that resonates with our target audience
whilst ensuring ethical practices in content creation,
at a speed that increases our productivity.
In building customer loyalty, we use intelligent
algorithms to automatically decide when and
where to send messages based on each customer’s
likelihood to engage. This targeted communication
strategy results in more personalised interactions,
fostering a stronger connection with our customers.
Furthermore, we’re using algorithms to increase
campaign confidence by optimising for the
campaign variant driving the highest overall
conversion rate. The tool can also personalise
optimisation based on each customer’s unique
attributes and behaviours. This ensures that a
campaign can be tailored to individual preferences,
maximising the impact and return on investment.
We have also begun to explore the use of large
language models for ideation in keywords for Search
Engine Optimisation (SEO) and Search Engine Marketing
(SEM) but not overusing AI generated content which
can negatively impact performance. These models
offer insightful keyword suggestions, identifying
opportunities to increase visibility in search engines and
thus drive more targeted traffic to our online platforms.
By leveraging these sophisticated technologies,
we are positioning ourselves at the forefront of
the industry, providing unique and engaging
experiences for our customers, whilst ensuring
responsible and ethical AI practices.
Development
Increasingly, software developers are using
NLP to enhance their work in code generation,
documentation, code analysis, test automation
and even debugging assistance.
NLP models are well-suited for code writing because
they possess the ability to comprehend and interpret
natural language, extract essential concepts, and
generate code that aligns with human intent.
We have conducted a pilot project employing GitHub
Copilot, an AI-powered software development
assistant that supports programmers with auto-
complete suggestions during coding sessions.
Copilot helped developers to code more quickly,
concentrate on solving significant higher-value
problems, maintain focus for longer periods, and
produce better documented and more maintainable
code. Importantly, our developers also experienced
a greater sense of fulfilment in their work.
Operations
As substantial customer data breaches
become more prevalent, AI performs a crucial
role managing transactional fraud.
By deeply scrutinising vast amounts of customer data,
AI systems have the capacity to identify trends and
anomalies that could indicate fraudulent actions.
Systems employing AI for fraud detection can monitor
transactions in real time, contrasting them with past
data and preset rules. They can swiftly flag suspicious
activities and trigger additional scrutiny or immediate
measures to avert fraud. And applying lessons learned
from previous fraud instances, AI can constantly refine
its algorithms to prepare for new fraud tactics.
Moreover, AI can enhance security protocols by
integrating behavioural analysis. AI can study elements
such as typing patterns and mouse movements to
detect abnormal behaviour that might imply the
use of automated scripts or fraudulent endeavours
to access customer accounts without permission.
Upon detecting such activities, the system can
introduce supplementary security screenings and
safeguards, like multi-factor authentication, to
maintain the security of customer accounts.
Governance
AI comes with important ethical considerations as well.
Given the opportunities for optimisation and enhanced
customer experience from AI, we are enthusiastic
and optimistic about its potential for Jumbo.
However, it’s a fast-moving field and we have
been following market developments and
expert discussions around AI closely.
Our players’ wellbeing is the primary consideration
in all decisions, and we are designing guardrails
for the responsible use of AI at Jumbo.
The balance is crucial to ensure decisions about
what tools are used and how they are used is aligned
to Jumbo’s integrity and governance framework.
24
25
Software-as-a-Service
Our proprietary lottery software Powered by Jumbo 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.
Powerful
Flexible
Specifically designed to meet peak
demand with continuous
capacity management.
Including interoperability with core
gaming environments, and integrations
with best-in-class marketing, CRM and
data-analytics tools.
Scalable
Optimised
Enabling growth and ease of
adaptation in line with evolving player,
game-type, regulatory and
systems enhancements.
Delivering an enhanced player
experience across the mobile
application, website and
customer support.
Best in class lottery software
Powered by Jumbo offers draw creation and automation,
real-time ticket management, end-of-draw scoring,
game types and compliant draw reporting.
Sales channels
Integrations
Through our software, we offer a superior player
experience across all digital interfaces, leveraging
AI and machine learning, leading website design,
responsiveness and point of sale facilities.
Integrated into our software are marketing automation
tools; dynamic segmentation; and business intelligence
and reporting tools that use APIs to enable real-time
data analysis to personalise the player experience.
Payment gateways
Cyber security governance
Powered by Jumbo seamlessly integrates with multiple
payment gateways while ensuring compliance with
regulatory requirements such as Payment Card Industry
Data Security Standard (PCI-DSS).
Player management
Powered by Jumbo offers account management,
purchase history and subscription management,
player preferences and limits, funds and e-wallet
management, prize payments and the ability to
seamlessly migrate player databases using Application
Programming Interfaces (APIs).
Cyber security governance is a crucial element of our
risk management program. It includes all the policies
and processes Jumbo uses to identify and block cyber
threats, based on security frameworks such as ISO 27001
and PCI DSS and SANS cyber incident response plan,
including active monitoring of our network and usage
pattern to detect, respond, mitigate and prevent cyber
threats.
“The adoption of the PBJ platform along
with Jumbo’s digital lottery expertise
and collaborative approach have helped
transform our lottery program.”
Andrew Thomas, CEO
Mater Foundation
“Our relationship with Jumbo has
proved to be a great way to meet the
needs of our customers, by combining
the respective strengths of Lotterywest
and Jumbo. The growth we’re seeing in
engagement and sales is testament to
the excellent teamwork and innovation
across our teams.”
Ralph Addis, CEO
Lotterywest
Growth in ticket sales
FY19 TTV
prior to
PBJ deal
FY23 TTV
post
PBJ deal
Annual TTV
FY21
prior to
PBJ deal
Annual TTV
FY23
post
PBJ deal
2.0x
1.3x
Annual Report 2023 Annual Report 2023 26
27
A secure platform built for performance
Managed Services
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 typically
deliver 20 small incremental releases a day to all
SaaS clients. Daily performance monitoring and
analysis helps to optimise system capacity.
To support innovation, we established Jumbo
Labs 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 Powered by Jumbo 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.
Lottery
Management
Ticket receipt
and results
Your
Customers
Ticket receipt
and results
Integrations
Draw and
Sales data
Sales
Channels
Customer
data
Customer
Management
Gaming
System
Powered by Jumbo Platform
Third-Party Integrations
Secure payment
options
Payment
Gateways
Customer
Support
We provide our lottery platform and lottery management
services to charities and worthwhile causes that are
looking to establish a lottery program or enhance an
existing program.
Software
Services
B Administration
(draw set up, ticket
management, End
of draw (EOD) etc)
B Sales channels (web,
app, operator, POS)
B Player account
management (CRM)
B Integrations (marketing
automation,
analytics, tools)
Program development
B Lottery brand /
campaign structure
(frequency)
B Product (raffle, lottery)
B Duration
B Prize selection and
procurement
B Ticket (number,
pricing, bundling)
B Marketing plan
Marketing
B Execution of marketing
plan across multiple
channels
B Digital first approach
B Combination of in-
house and outsourced
via external parties
Draw management
B Regulatory compliance (permits, EOD reporting)
B EOD management (draw scoring using RNG, winner
management, EOD financial and regulatory reporting)
B Payment processing (merchant management, fees)
B Partner management
B Player support (email, phone)
Annual Report 2023 Annual Report 2023 28
29
Gatherwell is a UK-based
External Lottery Manager
focused on digital lotteries
for small to medium good
causes, schools and local
government authorities.
LOTTERIES
StarVale
Our lotteries are a fun and engaging way to
appeal to our clients, supporters and help
raise funds.
Fundraise effectively with Gatherwell lotteries
At Gatherwell, our highly-awarded lottery management
has helped 14,000 organisations raise more than £20 million
for their causes, a number that continues to grow each year.
Build deeper connections with your community
Enjoyable and entertaining, Gatherwell’s digital lotteries
reward players with a fun experience, giving them the
chance to win a prize in return for their support.
This is the ideal way to engage your existing community,
and also provides new opportunities to connect with people
who don’t necessarily have an affinity with your cause.
“Gatherwell did everything they could to help
us turn our ideas into action. They did all the
marketing, set up the website, dealt with all
the payments and back-office administration.
It was amazing. We then knew this wasn’t
just a pipe dream – we could actually support
communities up here to thrive by helping
people to help each other. We literally
wouldn’t be here without Gatherwell.”
Janet Paterson, Founder
Western Isles Lifestyle Lottery
Products
14,000
charities and
good causes
4000+
weekly winners
£20m
funds raised
10 years
lottery experience
98%
customer satisfaction
62
net promoter score
>180k
active players
19
team members
Weekly lottery
Weekly lottery
Bespoke lottery solution
2,300+ PTAs and Schools out of ~30,000
320+ charities and good
causes including 77 under
The Giving Machine™ (TGM)
partnership model
Servicing 100+ local authorities out of ~400,
20+ community lotteries (multiple causes),
15+ clients (single brand)
Lottery plus
£500m
funds raised
25 years
experience
Innovative
approach to growth
Achieving
lottery success
Compliance
services
>970k
active players
70
team members
Payment processing
We offer cost-effective direct debit
payment processing via DDPay.
All direct debits within our lottery
management system are processed
via DDPay, a subsidiary of StarVale. This
ensures our clients have access to cost
effective automated payment systems
without any additional charges from
our client’s banks, as can often be the
case. DDPay is a Bacs Approved Supplier,
sponsored by the NatWest Group.
StarVale is a leading UK External
Lottery Manager and payment
processing company providing a
full range of Society Lottery
(weekly lottery and raffle) and
prize draw services.
We build and manage the UK’s some of the most
successful fundraising lotteries and raffles.
At StarVale, we have an elevated view of the charity and
non-profit sector, which gives us the unique power to
envision new possibilities and achieve fundraising goals.
We transcend the norm by bringing new ideas to the
table and enabling clients to leverage innovations
from other world-leading lottery programs.
Over the past decade, we have raised more than
£500 million in partnership with major charity and
non-profit organisations all over the UK.
The UK’s highest achieving lotteries
Our customers include some of the UK’s most successful
lotteries such as World Wildlife Fund, Macmillan Cancer Support,
Battersea Dogs and Cats Home, Age UK and the RSPCA.
StarVale is designed for:
B Major charities
B Major non-profits
B Major sports organisations
B Hospices.
Leading external lottery management
We provide everything you need to make your lottery a success.
Expert
consulting
Dedicated
lottery website
Marketing and
promotions
Customer
support
Prize and draw
management
Detailed
reporting and
insights
Complete
compliance
Direct debit
processing
Annual Report 2023 Annual Report 2023 30
31
“StarVale provide us with a brilliant
and transparent service, proactively
offering ideas and strategic guidance
for improvements and efficiencies which
greatly benefit our lottery program.”
Madeleine McManus
Senior Customer Segment Manager - Individual Giving
British Heart Foundation
“We’ve had a long and productive
relationship with Stride. We rely on their
knowledge and expertise to help us meet
our goals today, and for the
past 20 years.”
Andrea Robertson
President and CEO, STARS
Stride is a leading Canadian
External Lottery Manager
providing a full service offering to
organisations seeking to fundraise
via charitable lottery or a fully
managed raffle product.
At Stride, we provide world-class lottery and raffle management
services and technology to charities and not-for profits across
Canada. We believe our clients’ success is our success. At Stride,
our team of passionate experts take care of lottery and raffle
management for our clients, from marketing, to digital ticket sales,
to call center support and fulfillment. Our constantly-evolving
solutions are designed specifically to maximize net proceeds for
our clients’ causes.
Services
>570,000
active players
10,300
lucky winners
>$100m
annual ticket sales
>40 lotteries
across Canada
750,000
credit card transactions
Lottery strategy
Prize
acquisition
and distribution
Licensing and
compliance
Marketing
68
team members
1997
founded
5.3m
4.5m
1.2m
15.1m
Existing footprint
Growth opportunity
2022 Population size
Customer
service
Ticket
fulfilment
Draw
management
Reporting
“With over three times the population of
Alberta and Saskatchewan, Ontario and
British Columbia represent a compelling
growth opportunity for Stride to expand
its client base.”
Mike Veverka CEO and founder
Jumbo Interactive
As part of the strategic rationale for acquiring Stride, a key
priority for Jumbo is the expansion of the Stride business into the
Canadian provinces of British Columbia and Ontario.
As a first step to executing against this strategy, Stride was
registered as a Gaming Services Provider in British Columbia in
November 2022, and is awaiting registration approval in Ontario.
1. Population estimates Statistics Canada - https://www.statcan.gc.ca/en/start
Annual Report 2023 Annual Report 2023 32
33
“We use StarVale to successfully manage
our weekly lottery, which has grown
to become one of the largest charity
lotteries in the UK... They are great at
sharing learnings and generating new
campaign ideas to grow our lottery.”
Hannah Mason
Senior Marketing Manager (Prize-led)
Macmillan Cancer Support
“Alberta Cancer Foundation has
partnered with Stride for 20 years;
including licensing their “Powered
by SMCCheckout” lottery platform.
Stride continues to deliver on its
commitment to provide world-
class lottery management
services and industry-leading
ticket sales platform.”
Ryan Campbell
Director, Corporate Relations, Alberta Cancer Foundation
Sustainability highlights
$235 million
in FY23 for good causes1
252 Employees
134 in Australia
89 in UK
25 in Canada
4 in other
Climate
Active
FY2022 certification
undergoing assessment2
77%
Employee
Engagement
score
Certified as a
Great Place
to Work
Gender Diversity -
Female representation
50% Board
28% Senior Leadership Group
44% Group
Issued first
Modern
Slavery
Statement
December 2022
$250,000
each year in community
sponsorships and donations
Australian operations3
Carbon
neutral
Continued commitment to
Hesta's Vision
to increase the proportion of
women in senior leadership roles
89%
Customer
satisfaction4
Reflect
Reconciliation
Action Plan (RAP)
officially accredited by
Reconciliation Australia
1. Return-to-cause funds raised by charity partners, excluding state based lottery taxes
from Lotterywest and The Lottery Corporation.
2. Following an extensive internal process including independent verification, we expect
to meet the criteria in order to achieve Climate Active Certification. Our certification
feedback is still under review due to delays in processing as notified by Climate Active.
3. Offset Jumbo’s 2019 and 2022 carbon emissions through offset investment.
4. Lottery retailing for the 12-month period ended 30 June 2023.
Annual Report 2023 Annual Report 2023 AUSMAR 2023-MAR 2024 34
Annual Report 2023
Directors’ Report
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 2023.
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 2023:
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. Bringing a wealth of experience
having served as chair and non-executive director on multiple ASX listed companies, 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
People and Culture 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 Squirrel Software 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 General Manager of Corporate Advisory at Tyro Payments
Limited overseeing the Legal, Company Secretarial, Financial Advisory and Investor Relations divisions.
35
Annual Report 2023
2. Directors’ meetings
The table below sets out the number of meetings of the Board of Directors (including Board committees) held during the year
ended 30 June 2023 and the number of meetings attended by each Director.
Meetings Table
Director
Susan Forrester
Mike Veverka
Sharon Christensen
Giovanni Rizzo
Board1
Audit and Risk Management Committee
People and Culture Committee
Eligible to
attend
Attended
Eligible to
attend
Attended
Eligible to
attend
Attended
15
15
15
15
14
15
15
15
5
52
5
5
5
52
5
5
5
52
5
5
5
52
5
5
1 In addition to the Board meetings listed above, the Board made eight determinations by circulating resolution during the course of the year
2 While not a member of the Committee, Mr Veverka attended each meeting as an invitee
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
32,366
8,868,035
5,916
4,000
1 In addition Susan Forrester holds 2,732 rights, Mike Veverka holds 109,125 rights and Sharon Christensen holds 2,732 rights, over unissued
ordinary shares
4. Share options and rights
Unissued ordinary shares of the Company under the Equity Rights Plan at the date of this report are as follows:
Date rights granted
Expiry date
Exercise price of rights
Number under the Equity Rights
29 October 2020
17 December 2020
15 February 2021
28 October 2021
28 April 2022
28 April 2022
10 November 2022
1 July 2024
4 November 2023
4 November 2023
1 July 2025
1 July 2024
1 July 2025
28 August 2027
$nil
$nil
$nil
$nil
$nil
$nil
$nil
Plan
92,965
40,984
14,590
57,572
2,732
2,732
107,577
The holders of these rights do not have any rights under the rights to participate in any share issue of the Company or of an y
other entity.
During or since the financial year ended 30 June 2023, the following ordinary shares of Jumbo Interactive Limited were issued on
the exercise of options granted:
Date options granted
26 October 2017
Issue price of shares
Number of shares issued
$3.50
300,000
36
Annual Report 2023
During or since the financial year ended 30 June 2023, the following ordinary shares of Jumbo Interactive Limited were issued on
the exercise of rights granted:
Date rights granted
10 November 2022
28 April 2022
Issue price of shares
Number of shares issued
-
-
32,452
2,732
During or since the financial year ended 30 June 2023, the following rights were granted by Jumbo Interactive Limited to Directors
and Executive Key Management Personnel (KMP).
Name
Directors
Mike Veverka
Other key management personnel
Xavier Bergade
Brad Board
Abby Perry 1
David Todd
1 included in KMP from 26 August 2022
Number of rights granted during the year
40,246
17,608
17,608
8,042
17,608
101,112
The People and Culture Committee has awarded 5,736 FY23 STI rights to Mike Veverka subject to shareholder approval at the 2023
AGM and 9,112 FY23 STI rights to KMP subject to Director approval at a Board meeting on the 2023 AGM date.
5. Company Secretary
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 Institu te
of Australia and of the Chartered Governance Institute. He has been a Senior Company Secretary with Company Matters Pty
Limited for over five 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 52 to 70 and forms part of the Directors’ Report for the financial year ended
30 June 2023.
7. Principal Activities
During the financial year, the principal activities of the Group consisted of:
•
•
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.
37
Annual Report 2023
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.
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 44 to 51 of this Directors’ Report.
9. Dividends
A fully franked final dividend of 20.5 cents per fully paid ordinary share for the year ended 30 June 2022 was paid on 23 September
2022, and a fully franked interim dividend of 23.0 cents per fully paid ordinary share for the year ended 31 December 2022 was paid
on 17 March 2023.
On 25 August 2023, the Directors have determined to pay a fully franked final dividend for the financial year ended 30 June 2023 of
20.0 cents per fully paid ordinary share (2022: 20.5 cents per fully paid ordinary share), to be paid on 22 September 2023.
Further details of dividends provided for or paid are set out in Note 16: Dividends to the Consolidated Financial Statements on
page 104.
10. Capital management
On 26 August 2022, as part of the Company’s proactive approach to capital management, the Company announced an on-
market share buy-back of up to $25 million. The buy-back commenced in September 2022 and has been conducted on an
opportunistic basis with the timing and number of shares purchased dependent on the prevailing share price and alternative
capital deployment opportunities. As at 30 June 2023, 209,269 shares had been purchased at an average price of $12.58. The
Board has agreed to continue the on-market share buy-back program and will maintain a disciplined approach to execution.
The timing and number of shares to be purchased remains dependent 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.
38
Annual Report 2023
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 determination announced on 25 August 2023 and the Board’s decision to continue the on-market
share buy-back, 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 2023.
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 a nd
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 ‘create positive social impact through making lotteries easier’ which relies on:
•
A world-class lottery approach to technology and software;
• Our lottery management expertise developed over 20 years; and
•
Adopting a leadership position around governance and player protection.
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.
14.2 Lottery Retailing
Jumbo, through certain of its wholly owned subsidiaries, is an authorised reseller of lottery tickets under the flagship Oz Lotteries
brand. This Lottery Retailing segment is well-established and includes the sale of Australian lotteries (national and charities) in
eligible jurisdictions in both Australia and internationally.
The Lottery Retailing segment is underpinned via Reseller Agreements with The Lottery Corporation Limited (TLC), which were
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. Sales 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 and
Tasmania;
39
•
•
•
Annual Report 2023
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 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; and
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.
Pursuant to the Reseller Agreement with TLC, the service fee increased from 1.5% of the subscription price in FY21 to 2.5% in FY22 and
3.5% in FY23. It will increase to 4.65% in FY24 and thereafter. If the subscriptions exceed $400,000,000 in any applicable financial
year, then a service fee of 4.65% applies to the excess amount.
The domestic digital lottery market is currently estimated to be 38.4% of the total domestic lottery market (~$7.8bn). This compares
to more mature overseas markets such as the United Kingdom (UK) that has 45% digital penetration, and some of the
Scandinavian lotteries with penetration even higher.
The Group commenced selling charity lottery tickets in July 2015 and there are currently a total of 9 charities using Oz Lotteries to
sell lottery tickets including charities such as Mater, Endeavour Foundation, 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 sign ificantly
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 2023, 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 and Canadian charity lottery sectors and is closely monitoring iLottery
developments in the United States. 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 2023, 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.
The growth prospects for SaaS are compelling with a serviceable available market estimated at $3.1 billion1 across the UK, Canada,
Australia and United States.
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 licensed ELM, providing a full range of
services including lottery management, ticket fulfilment, and marketing services in Alberta and Saskatchewan. In November 2022,
the Company acquired the StarVale Group (StarVale), a leading UK ELM and digital payments company providing a full range of
weekly lottery, raffle and prize draw services.
1 Reflects the current portion of the market that can be acquired based on our existing business model, product set and capabilities. Source: La Fleur’s, North
American Gaming Almanac 2020-21.
40
Annual Report 2023
The growth prospects for Managed Services are compelling with a serviceable available market estimated at $5.2 billion1 across
the UK, Canada and Australia.
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 and the impact of Stride and StarVale, underlying expenses decreased 2.5%. This was primarily driven by disciplined cost
management and lower marketing costs as a result of the jackpot environment. In FY2024, the Company will continue to invest in
the business with the majority of the planned investment aligned to driving revenue growth, including a more normalised level of
marketing spend following a period of lower marketing activity in FY2023 due to lower than expected large jackpots.
14.6 Impact of COVID-19
The change in consumer behaviour arising from the COVID-19 pandemic had a positive effect on digital penetration in FY2021 and
FY2022. The change in consumer behaviour arising from the COVID-19 pandemic had a positive effect on digital penetration in
FY2021 and FY2022. In FY2023, digital lottery penetration increased 0.7% on the pcp to 38.4%, impacted by below average jackpot
volumes (FY2022: 37.7%, FY2021: 32.8%).
In July 2023, the Company transitioned from a remote-first work model to a hybrid work model, encouraging employees to attend
the office at least three days per week. A hybrid work model seeks to enhance collaboration and connectivity across teams and
foster a high-performing culture while supporting work-life balance.
15. Key risks
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:
Integration
Jumbo has expanded our international presence and addressable market through the
acquisition of Stride in June 2022 and StarVale in November 2022.
Both businesses have undergone a multi-level internal review to ensure alignment to the
goals of integration and appropriate accountability to deliver these goals.
Jumbo has also bolstered resourcing to ensure the right balance is struck between
cultural fit and achieving an efficient integration.
Expansion
We see a substantial opportunity for Jumbo to grow in our priority markets of Australia, the
UK and Canada. During the year Jumbo has been analysing the domestic and
international market to identify opportunities to acquire lottery-management companies.
We are working to ensure balance between opportunity and the necessary investment
required to ensure growth is not at the expense of the core business.
While we pursue the international expansion strategy, we are also monitoring the broader
macroeconomic conditions. The inflationary economy and cost-of-living pressures have
been more pronounced in certain markets; the potential reduction in discretionary
spending is being factored into target analysis.
1 Reflects the current portion of the market that can be acquired based on our existing business model, product set and capabilities. Source: Australian Charities
Report – 7th edition, Charity Commission for England and Wales, The Giving Report 2022 (Canada).
41
Annual Report 2023
Data Protection and Cyber
Data governance is a strong risk focus and one of our most important compliance
Resilience
processes. During the year, we have added resourcing to refresh our data-governance
strategy and reduce future risk by rationalising the data we collect and the period for
which it is retained. We are closely following both the developments around the Australian
Privacy Act and international legislation to ensure we are keeping pace with best practice
data protection globally.
From its inception Jumbo has been a fully digital business and cyber risk has been a
constant throughout the evolution of the business. We will continue to monitor and
prepare for the next wave of cyber threat.
In particular in the past 12 months, we have been building a common understanding of
good security posture and hygiene across the business from the customer-facing and
operational employees through to the Board.
Regulatory Compliance
We operate across an increasingly complex regulatory landscape in both our domestic
and international markets. We work to ensure compliance with our regulatory obligations
and proactively monitor legislative developments to help ensure we are safeguarding our
future operations.
Sustainability
Jumbo’s success depends on meeting the expectations of our stakeholders. Their
expectations are increasing and we are monitoring the legislative and reporting changes
which are expected in the near future.
This year is the second year for our Sustainability Council and we are better positioned to
prioritise the sustainability matters that are material to our stakeholders.
To read more about our Risk Management Framework, please see the Corporate Governance Statement
(https://www.jumbointeractive.com/corporate_governance_statement.pdf).
16. Impacts of legislation and other external
requirements
We operate in a complex and evolving compliance environment where we often face multi-layered state/territory, Australian and
international legislative requirements. Recent developments include:
•
Increased scrutiny on the gambling sector in Australia and abroad, specifically:
•
•
•
The introduction in Australia of a ban on use of credit cards for online gambling to be implemented in the 2024 financial
year, noting lotteries are exempt from any proposed restrictions;
An inquiry into online gambling and its impacts on those experiencing gambling harm by the Australian House of
Representatives Standing Committee on Social Policy and Legal Affairs recommending a ban on online gambling
advertising across all media within three years. The Committee’s final report acknowledged the lower gambling harm risk
associated with lotteries, resulting in lotteries having been excluded from its recommendations; and
The UK Gambling Commission’s white paper on gambling reform which sets out to ensure the UK’s regulatory framework
protects children and vulnerable people, prevents gambling related crime and keeps gambling fair and open in the
digital age.
•
Heightened focus on data protection, in the wake of recent high profile cyber incidents, with proposed changes to data
privacy frameworks including:
•
•
•
An extensive review of the Privacy Act in Australia by the Commonwealth Attorney General’s department which suggests
broader application of the Privacy Act, increased obligations on entities collecting and using personal information and
expanded individual rights to privacy;
Data protection legislation changes in the UK which impact the UK General Data Protection Regulations (GDPR)
framework. The proposed changes may relax some onerous requirements retained post-Brexit whilst maintaining data
protection adequacy with the EU; and
The potential harmonisation of privacy legislation in Canada to better align with international privacy laws, including
providing increased individual rights to privacy and the imposition of more severe financial sanctions for beaches.
42
Annual Report 2023
• Ongoing workplace reforms within Australia and internationally:
•
•
•
Significant changes in Australian laws regarding workplace equality and discrimination protections, including broadening
the responsibility of employers to promote a safe working environment, as well as an increase in the rights to flexible
working arrangements;
In the UK, legislation has been passed which provides ministerial power to restate, revoke, replace or make alternative
provisions for EU derived legislation in the UK post-Brexit; and
In Canada, criminal enforcement provisions will come into effect prohibiting wage fixing and no-poaching clauses in
certain circumstances.
•
Evolution of Sustainability reporting frameworks and disclosure standards:
•
•
•
In June, the International Sustainability Standards Board (ISSB) issued its inaugural standards – IFRS S1 and IFRS S2,
designed to help improve trust and confidence in company disclosures about sustainability to inform investment
decisions;
IFRS S1 provides a set of disclosure requirements designed to enable companies to communicate to investors about the
sustainability-related risks and opportunities they face over the short, medium and long term, while IFRS 2 sets out
specific climate-related disclosures and is designed to be used with IFRS S1.
Both fully incorporate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
17. Indemnifying officers or auditors
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.
18. Non-audit services
On 10 November 2022, Ernst & Young were appointed auditor of the Company following shareholder approval at the Annual
General Meeting. The appointment of Ernst & Young was made following a competitive tender process. BDO had been the
Company’s auditor for over 10 years prior.
During the financial year, there were no non-audit services provided by Ernst & Young.
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 stand ard 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.
43
Annual Report 2023
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 regard 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 responsibilit y 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 71.
Susan M Forrester
Chair of the Board
25 August 2023
Mike Veverka
Chief Executive Officer and Executive Director
44
Annual Report 2023
Operating and
Financial Review
23. Explanation of results
The Group reports revenue on a net revenue inflow basis when they are agent 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’). Revenue is
generated mainly as a percentage of TTV.
The Lottery Retailing segment continues to be the largest contributor to Group revenue and profits. Revenue for this segment
decreased due to a lower level of large jackpots and lower customer activity. Gross profit was impacted by the 1% step-up in the
service fee payable to TLC. The SaaS segment revenue and profit decreased mainly due to lower internal revenue received from
Lottery Retailing. The Managed Services segment includes Gatherwell and StarVale in the UK, Stride in Canada, and Jumbo
Fundraising in Australia. Stride completed on 1 June 2022 and contributed a full 12 months of performance in FY2023 while StarVale
completed on 1 November 2022 and therefore only contributed 8 months of performance in FY2023.
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 Reseller
Agreement, or operations as a result of the de-merger.
Over the last twelve months, the operating environment has undergone a significant and rapid change with slower economic
growth expected including the possibility of a recession. Inflation has emerged as a key global issue with central banks resp onding
by increasing interest rates quickly and considerably. Lotteries have delivered consistent growth over the long term and have
proven to be highly resilient to economic recessions.
The change in consumer behaviour arising from the COVID-19 pandemic had a positive effect on digital penetration in FY2021 and
FY2022. In FY2023, digital lottery penetration increased 0.7% on the pcp to 38.4%, impacted by below average jackpot volumes
(FY2022: 37.7%, FY2021: 32.8%).
Labour market conditions and wage pressure have eased following the initial disruption caused by the COVID-19 pandemic.
However, the demand for digital expertise is expected to remain high and the Group remains committed to being a sought after
employer for top digital talent.
The financial position of the Group is sound with strong liquidity. As at 30 June 2023, the Group had general cash reserves of
$53,190,000 underpinned by strong organic cash generation. The Group also has access to an additional $47,000,000 through its
senior debt facility for strategic growth opportunities.
As the technology industry is fast-moving with the rate of technological change high, the Group continues to invest in its software
platforms. 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. In addition, better data management leads to an improved customer
experience and increased sales. The Group has increased investment in technology for the benefit of both its own Lottery Retailing
operations as well its SaaS and Managed Services clients. The Group 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. Marketing costs
decreased on the pcp due to the unfavourable jackpot environment.
Investment in the three main pillars that support the ongoing growth of the Group are as follows:
•
•
•
$6,558,000 (FY2022: $5,706,000) invested in the proprietary software platform (intangible assets);
$6,572,000 (FY2022: $8,597,000) invested in marketing activities for the acquisition, engagement and retention of customers;
and
$22,161,000 (FY2022: $17,196,000) on employees who provide the software development and marketing skills, customer support
services, and management.
45
Annual Report 2023
24. Result highlights (statutory and underlying
operations)
The Group has included TTV; underlying EBIT, EBITDA, NPAT, and NPATA; statutory EBIT and EBITDA. These measures are not defined
under International Financial Reporting Standards (IFRS) and are, therefore, termed "non-IFRS" measures and are not subject to
audit procedures.
Statutory EBIT is defined as Group earnings before net interest and tax, while statutory EBITDA is Group earnings before net interest,
tax, and depreciation and amortisation.
Underlying EBIT, EBITDA, NPAT and NPATA are defined as statutory EBIT, EBITDA, NPAT, and NPATA adjusted for significant non-
recurring items, and are provided as useful indicators of the Group’s operating financial performance on a comparable basis.
Underlying earnings is the primary reporting measure used by management and the Group’s chief operating decision maker (the
Chief Executive Officer) for the purposes of managing and assessing the financial performance of the business.
TTV10
– Company
– Third party
Revenue
Revenue margin (%)
EBITDA – statutory10
EBIT – statutory10
NPAT – statutory10
NPATA1 – statutory10
Earnings per share - statutory (cps)
Earnings per share before amortisation of intangible
assets – statutory (cps) 10
Add/(deduct) significant items2
– Profit on disposal of subsidiary3
– Acquisition costs4
– Retention payments5
– Chargebacks in years prior to FY226
– Fair value movement on financial liabilities7
– Tax effect of TLC extension fee8
– Tax benefit
EBITDA – underlying10
EBIT – underlying10
NPAT – underlying10
NPATA1 - underlying10
Earnings per share – underlying10
Earnings per share before amortisation of intangible
assets – underlying (cps) 10
EBITDA margin – underlying (%)
EBIT margin – underlying (%)
Return on capital employed9
Cash at bank
Net assets
Net tangible assets
Share price at year end ($)
Dividend declared (cps)
Total shareholder return (%)
Shares on issue (million)
Market capitalisation ($ million)
FY2023
$’000
851,933
449,085
402,848
118,712
13.9%
58,146
46,851
31,569
33,743
50.2
53.6
-
115
244
-
410
861
(100)
58,915
47,620
33,099
35,273
52.6
56.1
49.6%
40.1%
31.6%
53,190
99,989
30,215
14.26
43.0
3.3%
62.9
896.9
FY2022
$’000
659,924
460,637
199,287
104,251
15.8%
54,045
45,303
31,176
31,481
49.9
50.3
(525)
973
-
604
-
-
(23)
55,097
46,355
32,205
32,510
51.5
52.0
52.9%
44.5%
33.5%
68,930
92,983
45,416
14.22
42.5
(17.7%)
62.8
892.7
Variance
%
29.1
(2.5)
>100
13.9
(1.9ppt)
7.6
3.4
1.3
7.2
0.6
6.5
6.9
2.7
2.8
8.5
2.1
7.8
(3.3ppt)
(4.4ppt)
(1.9ppt)
(22.8)
7.5
(33.5)
0.3
1.2
(119%)
0.2
0.5
46
Annual Report 2023
1 NPATA is net profit after tax and before tax-effect amortisation expenses in respect of intangible assets acquired through a Business Combination
which for the full year is $2,174,000 (FY2022: $305,000).
2 Statutory earnings are adjusted by significant non-recurring items to get to underlying earnings.
3 Profit on disposal of subsidiary relates to the sale of lightningpayroll.com.au business (Intellitron Pty Ltd) on 30 June 2022.
4 Acquisition costs include consulting and legal expenses relating to the acquisition of Stride and StarVale.
5 One-off retention payments for key Stride management following the completion of the acquisition on 1 June 2022.
6 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 been expensed appropriately. As a result, a one-off expense was recognised
in FY2022.
7 The fair value movement on financial liabilities relates to StarVale ($174,000) increasing the probability from 89% to 91% of paying the first and only
earnout following 30 June 2023 and Stride ($236,000) Increasing the probability from 95% to 100% of paying the second and final earnout following 30
June 2023.
8 Net Profit After Tax/Earnings Per Share before amortisation of acquired intangible assets and includes a one-off $861,000 tax charge in FY23 due to a
change in the accounting and tax treatment of the capitalised $15 million extension fee paid under the Reseller Agreements with The Lottery
Corporation in August 2020 – please refer to Note 11 for further detail.
9 NPAT/Closing equity.
10 These are non-IFRS measures and not audited.
24.1 Major items
•
•
Lottery Retailing – pursuant to the Reseller Agreements with TLC dated 25 August 2020, a ‘stepped-up’ service fee is payable in
the subscription cost of the tickets purchased at 1.5% FY2021, 2.5% FY2022, 3.5% FY2023, and 4.65% FY2024 and thereafter. If the
subscriptions exceed $400,000,000 in any applicable financial year, then a service of 4.65% applies to the excess amount.
Lottery Retailing - ongoing intersegment software management fee of 7.5% of relevant 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.
• Managed Services - includes a full 12 months contribution from Stride (acquired 1 June 2022) and eight months contribution
from StarVale (acquired 1 November 2022). The completion payment for StarVale of $40,217,000 was settled 63% from cash
reserves and 37% using existing debt facilities.
25. Consolidated results of operations
•
The acquisitions of Stride and StarVale (reported in the Managed Services segment) were completed on 1 June 2022 and 1
November 2022 respectively. As a result Stride contributed a full 12 months (1 month in pcp) and StarVale contributed eight
months to FY2023 performance (nil in the pcp).
•
•
In FY2023 Stride contributed $102,278,000, $8,072,000 and $2,893,000 in TTV, Revenue and EBITDA respectively (FY2022:
$9,068,000, $618,000 and $80,000 in TTV, Revenue and EBITDA).
In FY2023 StarVale contributed to $83,187,000, $6,917,000 and $2,844,000 in TTV, Revenue and EBITDA respectively.
•
Excluding the contribution from Stride and StarVale:
•
•
•
Revenue increased 0.1% reflecting slightly higher Lottery Retailing and SaaS external revenue offset by lower revenue in
Gatherwell.
Underlying EBITDA decreased 3.8% mainly due to the step up in the TLC service fee from 2.5% to 3.5% of the subscription
ticket costs and lower other income. On a segmental basis, higher earnings in Lottery Retailing were more than offset by
the EBITDA decline in SaaS and Gatherwell.
Underlying operating expenses decreased 1.8% with higher staff and technology costs, more than offset by a reduction in
marketing spend due to lower jackpot activity and lower short-term incentive payments.
The Group’s financial performance is summarised below.
TTV
Revenue
Cost of sales
Gross profit
Other income
Operating expenses
EBITDA
FY2023
$’000
851,933
118,712
(17,953)
100,759
323
(42,936)
58,146
FY2022
$’000
659,924
104,251
(14,473)
89,778
995
(36,728)
54,045
Variance
%
29.1
13.9
24.0
12.2
(67.5)
16.9
7.6
47
Annual Report 2023
FY2023
$’000
(8,612)
49,534
(2,683)
46,851
(212)
46,639
(15,070)
31,569
2,174
33,743
FY2022
$’000
(8,366)
45,679
(376)
45,303
(66)
45,237
(14,061)
31,176
305
31,481
Variance
%
2.9
8.4
>100
3.4
>100
3.1
7.2
1.3
>100
7.2
Depreciation and amortisation
EBITA
Amortisation of acquired intangible assets
EBIT
Net interest expense
NPBT
Income tax expense
NPAT
Amortisation of acquired intangible assets after tax
NPATA
26. Review of operations
26.1 Lottery Retailing
The Group’s Lottery Retailing segment operates the www.ozlotteries.com website and sells tickets in Australian national draw
lottery games to customers in all Australian states and territories (excluding Queensland and Western Australia) and in certain
overseas jurisdictions, under 10-year agreements with TLC which run until 26 August 2030. The segment 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
FY2023
$’000
449,085
91,287
41,496
(10,962)
30,534
20.3%
45.5%
12.0%
33.4%
FY2022
$’000
460,637
91,098
43,096
(12,984)
30,112
19.8%
47.3%
14.3%
33.1%
Variance
%
(2.5)
0.2
(3.7)
(15.6)
1.4
0.5ppt
(1.8ppt)
(2.3ppt)
0.3ppt
TTV decreased 2.5% mainly due to lower customer activity as a result of lower large jackpot activity compared to the pcp. Despite
only one large jackpot ≥$15 million below the pcp, the profile of these jackpots varied considerably. Notably FY2023 included only
five Powerball jackpots ≥$50 million, compared to 13 in the pcp. Revenue increased 0.2%, reflecting the lower TTV offset by a higher
revenue margin, due to product mix and pricing changes (effective May 2023). Gross profit was impacted by the ‘step up’ in the
TLC service fee from 2.5% to 3.5% of the subscription ticket costs. EBITDA increased 1.4% reflecting the above factors and lower
marketing spend which was impacted by the profile of jackpots. Marketing costs were equivalent to 1.3% of TTV in FY2023 (FY2022:
1.7%). After marketing costs, the single largest expense relates to employee costs of $3,003,000 (FY2022: $2,937,000) in respect of 22
staff (FY2022: 20) employed in the segment, of which the majority include operations and customer support staff.
Underlying TTV
Lotteries
Charities
Total TTV
$’000
441,606
7,479
449,085
FY2023
%
98.3
1.7
100.0
$’000
452,125
8,512
460,637
FY2022
%
98.1
1.9
100.0
Variance
%
(2.3)
(12.1)
(2.5)
TTV generated from charities reduced 12.1%, mainly due to the loss of the Surf Life Saving reseller agreement in October 2022.
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
Reported Revenue – Lottery Retailing
FY2023
FY2022
FY2021
$449,085,000
$460,637,000
$365,444,000
$91,287,000
$91,098,000
$75,083,000
48
Annual Report 2023
OzLotto / Powerball Division 1 of $15 million or more
Number of jackpots of $15 million or more
Average Division 1 jackpot of $15 million or more
Peak Division 1 jackpot during the full year period
FY2023
FY2022
FY2021
42
$36,905,000
$160,000,000
43
$40,698,000
$120,000,000
38
$31,842,000
$80,000,000
Aggregate Division 1 jackpots during the full year period
$1,550,000,000
$1,750,000,000
$1,210,000,000
The Group invests extensively in online marketing to grow and activate the customer database that transacts via its website
(www.ozlotteries.com) and associated mobile apps (iOS & Android). In FY2023 $5,360,000 was invested in marketing activities
during the period primarily to acquire new and engage existing customers (FY2022: $7,257,000). These costs were fully expensed
through the profit and loss.
The following key performance indicators (KPIs) are used to track the effectiveness of online marketing campaigns:
1. CPL: Cost per Lead (new online accounts) is defined as the total cost to acquire these new accounts divided by the number of
new accounts in a given period. New accounts may potentially become active customers after the account has been
established.
2. Number of Active Online Customers is defined as customers who have spent money on tickets in a given period.
3. Average spend per active online customer is defined as the total spent by active online customers divided by the number of
active online customers in a given period.
The following table summarises the Marketing KPIs:
Customer activity
Number of new online accounts
Cost per lead (CPL)
Number of active online customers / players
Average spend per active online customer / player
FY2023
300,194
$17.86
914,215
$467.12
FY2022
395,916
$18.33
918,832
$475.13
The underlying business continues to perform well as evidenced by the profile of sales over time. The sales resulting from jackpots
≤$15 million demonstrate the resilience of the business over time while the sales resulting from jackpots ≥$15 million show the boost
from large jackpots.
Moving Annual Total (MAT):
1 Excludes contribution from Western Australia customers transitioned to SaaS (effective 21 December 2020)
26.2 Software-as-a-Service (SaaS)
Jumbo’s SaaS segment licences the Jumbo lottery software platform, Powered by Jumbo (PBJ) to several customers, including to
ozlotteries.com, and develops, improves and maintains the Jumbo proprietary platform.
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 customer) as (i) PBJ has been developed
for this internal customer over many years at a significant investment compared to other customers who receive an adapted
49
Annual Report 2023
version of PBJ at a lower development cost and (ii) the internal customer has a significantly higher usage of other services such as
data analytics. The level of this fee falls within the arm’s length upper/lower interquartile range based on international
benchmarking undertaken by an independent third party in October 2021.
TTV - third party
Revenue
– external
– internal
Gross profit
Operating expenses
EBITDA
External revenue / TTV
Gross profit / Revenue
Opex / Revenue
EBITDA / Revenue
FY2023
$’000
196,035
42,393
8,710
33,683
41,962
(14,271)
27,691
4.4%
99.0%
33.7%
65.3%
FY20221
$’000
167,465
42,708
8,318
34,390
42,391
(13,447)
28,944
5.0%
99.3%
31.5%
67.8%
Variance
%
17.1
-0.7
4.7
-2.1
-1.0
6.1
-4.3
(0.6ppt)
(0.3ppt)
2.2ppt
(2.5ppt)
1 Includes Intellitron which was sold on 30 June 2022 and contributed $767,000 TTV, $767,000 Revenue and $538,000 EBITDA.
Excluding the impact of Intellitron Pty Ltd, external TTV through the PBJ platform increased 17.6%. Total revenue declined 0.7%
reflecting higher external revenue from clients more than offset by a lower internal service fee from Lottery Retailing (due to a
contraction in TTV).
Employee benefits is the single largest expense at $9,894,000 (FY2022: $9,427,000) with 83 staff (FY2022: 72) in this segment mainly
reflecting software engineers and an allocation of indirect staff expenses.
The contraction in EBITDA margin to 65.3% (FY2022: 67.8%) was impacted by the lower intersegment fee from Lottery Retailing and
higher operating expenses.
26.3 Managed Services
The Group’s Managed Services segment provides lottery management services including prize procurement, lottery game design,
campaign marketing, and customer relationship and draw management. These services are provided in addition to the
proprietary-owned lottery software platforms to licensed charities in Australia, Canada and the UK. The segment operates as
Gatherwell Ltd (Gatherwell) and StarVale Group of companies (StarVale) as External Lottery Managers (ELM) in the UK, Stride
Management Corp. (Stride) as an ELM for charity lotteries in Canada, and Jumbo Fundraising (JF) in Australia.
TTV
Revenue
Gross profit
Operating expenses
EBITDA3
Revenue / TTV
Gross profit / Revenue
Opex / Revenue
EBITDA / Revenue
FY20232
$’000
206,813
18,715
17,301
(11,109)
6,244
9.0%
92.4%
59.4%
33.4%
FY20221
$’000
31,822
4,835
4,291
(3,447)
844
15.2%
88.8%
71.3%
17.5%
Variance
%
>100
>100
>100
>100
>100
(6.2ppt)
3.6ppt
(11.9ppt)
15.9ppt
1 Includes a 1-month contribution for Stride which was acquired 1 June 2022.
2 Includes an 8-month contribution for StarVale which was acquired 1 November 2022.
3 FY23 EBITDA includes $52k of other income in Stride.
Gatherwell
The Gatherwell business in the UK operates as an External Lottery Manager (ELM) with 16 staff (FY2022: 19) and provides lottery
manager services to ~350 brands (charities) (FY2022: 190) supporting 14,000 good causes (FY2022: 11,947). It also provides some
support functions (mainly customer support) for the SaaS segment in the UK. Following a soft start to the year as a result of the
delayed onboarding of clients, we have refined the operating model to improve accountabilities and accelerate conversion of the
pipeline. These actions continue to gain traction with sales returning to growth in the fourth quarter of FY2023.
50
TTV
Revenue
EBITDA
Stride
Annual Report 2023
FY2023
$’000
20,591
3,626
561
FY2022
$’000s
22,044
4,069
1,156
Variance
%
(6.6)
(10.9)
(51.5)
Stride was acquired 1 June 2022 and accordingly there is only one month of financial results in the pcp. The Stride business in
Canada operates as an ELM with 25 full-time staff (with an additional ~50 to 75 rostered casual call centre staff as required) and
provides services, including lottery operations, ticket fulfilment and marketing, to charity lotteries in Alberta and Saskatchewan.
Stride expanded into British Columbia with its first customer, lakelifelottery.ca, in August 2022 and has plans to expand into Ontario,
the largest province/territory in Canada, subject to receiving the required regulatory approvals.
TTV
Revenue
EBITDA2
FY2023
$’000
102,278
8,072
2,893
FY20221
$’000s
9,068
618
80
Variance
%
>100
>100
>100
1 Includes a 1-month contribution for Stride which was acquired 1 June 2022.
2 FY23 EBITDA includes $52k of other income in Stride.
StarVale
StarVale was acquired 1 November 2022 yielding only eight months of financial results in FY2023 and none in the pcp. StarVale
operates in the UK as an ELM with 73 staff and provides lottery manager services and payments services to ~45 medium to
large charities.
TTV
Revenue
EBITDA
FY20231
$’000
83,187
6,917
2,844
FY2022
$’000s
-
-
-
Variance
%
-
-
-
1 Includes an 8-month contribution for StarVale which was acquired 1 November 2022.
Jumbo Fundraising
JF provides a comprehensive lottery management service that includes payment processing, draw management, permit
applications and player support. 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
segment to form a complete ’lottery-in-a-box’ service to charities of all sizes. Sales are further marketed through the
ozlotteries.com website in the Lottery Retailing segment.
JF contributed TTV of $757,000 (FY2022: $710,000), Revenue of $100,000 (FY2022: $148,000) and EBITDA of $(54,000) (FY2022:
$(392,000)). As part of our FY23 planning process and ongoing cost discipline, management decided to reduce its focus on JF in
the short term and prioritise the integration of its overseas acquisitions.
26.4 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
FY2023
$’000
(6,594)
FY2022
$’000
(6,850)
Variance
%
(3.7)
Operating expenses were modestly lower on the pcp mainly due to lower consulting and legal costs partially offset by an increase
in the fair value movement in liabilities for the Stride and StarVale earnouts.
51
Annual Report 2023
26.5 Reconciliation of statutory EBITDA
Lottery Retailing EBITDA
SaaS EBITDA
Managed Services EBITDA
Reconciling items
Other revenue - Group – see Note 1(b)
Group EBITDA
27. Financial position
FY2023
$’000
30,534
27,691
6,192
(6,594)
323
58,146
FY2022
$’000
30,112
28,944
844
(6,850)
995
54,045
The net assets of the Group have increased by $7,006,000 from 30 June 2022 to $99,989,000. The Group’s working capital, being
current assets less current liabilities, has decreased from $20,092,000 in 2023 to $26,131,000 in 2023 mainly as a result of the
repayment of the $15m debt drawn to fund the StarVale acquisition. Non-current assets increased by $29,954,000 to $86,146,000
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.
Significant changes in the state of affairs of the Group for the financial year were as follows:
Decrease in cash of $15,519,000 resulting from:
– Cash provided by operating activities
– Cash used in investing activities-mainly acquisition of StarVale and website development costs
(intangibles)
– Cash raised from the issue of shares
– Payment of lease liabilities in financing activities
– Payments for share buy-back
– Dividends paid
See Statement of Cash Flow for details
Increase in non-current assets of $29,954,000 resulting largely from:
– Investment in website development costs net of amortisation
– Goodwill
– Customer contracts and relationships net of amortisation
− Software net of amortisation
– Changes in other non-current assets – see Statement of Financial Position
Increase in non-current liabilities of $2,856,000 resulting from:
– Deferred tax liabilities
– Changes in other non-current liabilities – see Statement of Financial Position
30 June 2023
$’000
54,631
(40,093)
1,050
(1,074)
(2,633)
(27,400)
(15,519)
$’000
822
15,749
14,031
512
(1,160)
29,954
$’000
4,156
(1,300)
2,856
52
Annual Report 2023
Remuneration Report
Contents
28.
29.
30.
31.
32.
33.
Remuneration governance
Remuneration Framework
FY2023 Executive remuneration outcomes
Total Executive remuneration and benefits
Non-Executive Director Remuneration
Executive KMP shareholdings
55
56
62
67
68
70
Remuneration Report for FY2023
The Directors present the Jumbo Interactive Limited Remuneration Report for Key Management Personnel (KMP) for the year
ended 30 June 2023. This report outlines key aspects of our remuneration policy and framework adopted in FY2023, 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 2023 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.
Who is covered by this report
This report outlines the remuneration arrangements in place for KMP of the Group in FY2023, 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
Sharon Christensen
Giovanni Rizzo
Executive KMP
Mike Veverka
Xavier Bergade
Brad Board
Abby Perry
David Todd
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 Technology Officer
Chief Operating Officer
Chief People Officer
Chief Financial Officer
Full year
Full year
Full year
Full year
Full year
Full year
Effective 26 August 2022
Full year
53
Annual Report 2023
Message from the Chair of the People and
Culture Committee
Dear Shareholders,
On behalf of the People and Culture Committee (PCC), I am pleased to present the Group’s Remuneration Report for the 2023
financial year. This report provides a comprehensive overview of our Remuneration Framework and its alignment with our business
strategy.
Welcome to StarVale and Stride
We are delighted to welcome our StarVale and Stride employees to the Group. Over the past 12 months we have worked closely
with our international teams to synchronise business cultures and strategic objectives, and to align our systems and pro cesses. In
March 2023, our Corporate Strategy including Mission, Vision and Values were rolled out through a series of department and
business-led Strategy Days. Our new global onboarding program aims to create a greater sense of belonging and inclusion and
reinforces the key role each individual plays in the delivery of our Corporate Strategy. Regular Group-wide events such as
Employee Appreciation Day, International Women’s Day and other cultural celebrations have helped build connections across time
zones and bring our people along the broader Group journey. Work continues on integrating our core communication platforms,
policies and procedures across the Group, which is expected to be completed by Q2 FY24.
Culture
We have long been proud of our vibrant workplace culture. Our unique, modern technology culture is underpinned by our Core
Values and is a cornerstone to achieving our Corporate Strategy. Building on our unique and strong culture, the Group was
recognised globally as a Great Place to Work with 90% employee consensus. This certification not only signals our strong
workplace culture and the positive regard our people have towards us as an employer, but it also enables us to continue to at tract
top talent and strengthen our overall employer brand. We obtained this certificate while at the same time transitioning from a
remote-first company to a hybrid work model with our teams attending core office days each week. Through increased office
presence our ability to communicate, collaborate and operate cross-functionally is greatly enhanced, leading to improved
productivity and engagement, while continuing to foster a work environment where our employees can thrive and perform at thei r
best. As part of our ongoing efforts to foster a positive work culture and motivate our workforce, our annual Jumbo Awards were
launched in 2022. The Awards are linked to our Core Values, by recognising employees who live and display desired behaviours
aligned with our values. This recognition program has become an integral part of our Employee Value Proposition, contributing to a
positive work environment and driving organisational success.
Talent attraction and development
With the demand for digital skills exceeding supply, we have focused heavily on two areas: shaping a compelling Employee Value
Proposition and investing in our employees’ development. Our Group Employee Value Proposition was informed by a global
research project. Core to our strategy was ensuring communication touch points across all platforms whether internal or ext ernal,
were consistent, complimentary, and integrated. Our goal is to attract quality talent by appealing to their ambition and desire to
work for a rapidly growing organisation who offers career opportunities that are more than just a job. Investing in ou r employees’
development not only benefits them individually, but also leads to improved performance and greater innovation for Jumbo. To
provide our talent with interesting opportunities to learn and grow, we have established a Jumbo University. Jumbo University is
intended to support our employees’ professional growth by empowering them to expand their skill sets and is supported by a best
in market learning experience platform. The program supports a scalable approach to learning and development, focusin g on
core transferable business skills such as project management, leadership, data, customer service, coaching and more.
Diversity, Equity, Inclusion and Belonging
Since the release of our Diversity, Equity & Inclusion Commitment in September 2021, we have undertaken an extensive review of
best practice and market research as well as consulted with our team and members of our Senior Leadership Group. Jumbo has
taken steps to enhance our Diversity, Equity, Inclusion and Belonging (DEIB) Commitment through a targeted action plan. Our DEIB
pillars focus on accountability, equitable access, education and community. Our company policies and programs are designed to
promote fairness, equality and inclusion in the workplace and voluntary data collection points enable us to gather DEIB data on
recruitment and workforce, which is used to inform decisions and track progress against goals. Pleasingly, representation of
women in leadership roles rose by 8% to 28% in FY23, and we have maintained our FY22 levels of 50% representation at Board level
and 44% at Group level.
54
Annual Report 2023
FY23 Performance Outcomes
The financial component (50%) of the FY23 short-term incentive scorecard requires achievement of underlying net profit after tax
growth, subject to a sliding scale. An unfavourable run of jackpots in FY23 contributed to lower than anticipated revenue resulting
in the minimum NPAT threshold (6% increase) not being met and 0% of the financial component of the short-term incentive
scorecard being achieved.
The operational component (50%) of the FY23 short-term incentive scorecard reflects a number of metrics focused on
sustainability, players, employees and an individual performance rating. Additionally, the operational component included a
Return on Invested Capital (ROIC) hurdle, expansion of the Lotterywest agreement and an underlying NPAT measure based on the
Group business plan. The latter is designed as a ‘gate’ to the other operational metrics and reflects the minimum threshold
management needs to achieve before the other operational metrics can be unlocked. This ‘gate’ enables the Board to apply its
discretion and adjust the percentage awarded for these components. Based on FY23 performance, 81% of the operational
component was achieved.
Remuneration Framework
As part of a broader review of the Remuneration Framework at the end of FY22, the PCC also undertook a detailed Executive
benchmarking exercise. Having regard to market data provided in the independent review, the benchmarking showed that the
level of TFR for direct reports of the CEO was below market median, having not increased for the past two consecutive years at that
time. In response, the PCC recommended an increase of TFR for the CEO’s direct reports, which was deferred for 12 months due to
ongoing cost discipline in a lower economic growth environment. The recommended increase of TFR will take effect from FY24,
resulting in a modest increase in the Total Remuneration Opportunity (TRO) for the CFO, CTO and COO.
In August 2022, we welcomed Abby Perry to the KMP as Chief People Officer. A similar percentage increase in TFR for the CPO was
recommended by the PCC with a staged increase of TFR over the remaining period of the current Remuneration Framework,
aligned with benchmarking of similar positions at comparative companies. The TRO mix for the direct reports of the CEO will also
change in FY24, with a higher weighting towards TFR, now 60% of TRO (previously 50%) with the remaining 40% split equally
between the STI (20%) and LTI (20%) components. This compares to 25% for the STI and LTI components respectively in FY23.
Conclusion
FY23 has been a period of significant growth in the Jumbo Group with further expansion of the business into Canda and the UK. I
would like to acknowledge the hard work and dedication of the staff and senior leaders who have enabled a successful integration
of StarVale and Stride, establishing a diverse, high performing culture supporting our employees to thrive and setting them up to
successfully execute Jumbo’s Corporate Strategy into FY24. Finally, I would like to acknowledge the immense contribution of David
Todd, Chief Financial Officer (CFO), who advised the Board of his intention to resign due to unforeseen personal health reasons. A
comprehensive recruitment process is currently underway, considering both internal and external candidates. We expect to
announce the new CFO in the second quarter of FY2024. David will remain employed by Jumbo in an advisory capacity for as long
as required to ensure a smooth transition to the new CFO. Together with other members of the Board, management team and all
our staff across Australia, Canada and the UK, I wish him and his family the very best for the future.
Sharon A Christensen
Chair of People and Culture Committee
55
Annual Report 2023
28. Remuneration governance
The Remuneration Framework is managed by the People and Culture Committee (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.
28.1 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 res ponsible
company-wide remuneration policy that promotes the creation of value in a sustainable manner.
28.2 People and Culture Committee
The PCC 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, CPO, the Company Secretary and Corporate Affairs Counsel to the CEO,
on an invitation only basis.
The objectives of the Committee are to assist the Board in discharging its corporate governance responsibilities to exercise due
care and diligence in relation to:
• Making recommendations to the Board on the setting and evaluation of key performance areas for Directors and Senior
Executives;
• Making recommendations to the Board on the setting of succession plans for Directors and Senior Executives;
• Making recommendations to the Board on the appointment of Directors and Senior Executives;
• Making recommendations to the Board on Director, Senior Executive and Senior Leadership Group remuneration, in line with
Jumbo’s Remuneration Framework;
•
Ensuring Jumbo’s Remuneration Framework drives appropriate behaviours, reflective of tJumbo’s Core Values; and
• Oversight of the People & Culture policies and strategies, including succession planning, workplace culture and employee
engagement.
For further details of the composition and responsibilities of the PCC (including a copy of the Committee’s Charter), please refer to
the Corporate Governance section on our website (https://www.jumbointeractive.com/wp-content/uploads/2023/03/People-
Culture-Committee-Charter.pdf).
28.3 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.
28.4 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 was $18,993.
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 FY2023.
56
Annual Report 2023
28.5 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
Abby Perry 2
Notice period1
12 months
6 months
6 months
6 months
6 months
Restraint of trade
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 included in KMP from 26 August 2022
28.6 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
Consolidated Group
2023
$
11,467
1,165
2022
$
12,706
1,165
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
92,954
86,900
29. Remuneration Framework
The current Remuneration Framework operates over a three-year cycle, commencing from 1 July 2022 and concluding 30 June
2025. 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.
The PCC’s objective in remuneration is to support the delivery of business outcomes that grow shareholder value while continu ing
to explore value accretive business opportunities both domestically and internationally that will successfully diversify our revenue
stream, and to ensure that we can attract and retain Executives who can execute on this strategy.
Jumbo has adopted a strategic approach to our remuneration framework to drive alignment with Group strategic objectives and
aspirations, and to promote a high-performance culture.
57
Annual Report 2023
Strategic imperatives
Remuneration principles
58
Annual Report 2023
Framework overview
The Remuneration Framework is designed to support the Group’s strategic priorities by aligning Jumbo’s short- and long-term
objectives with shareholder and business objectives. This is achieved through a combination of fixed remuneration and short a nd
long-term incentives aligned to Group strategy and based on key performance areas affecting the Group’s financial results and
company values. This framework overview details how the Remuneration Framework is applied to Executive KMP.
Component
Alignment to Performance
Alignment to Strategy
Total Remuneration Opportunity (TRO)
Comprising Total Fixed Remuneration,
– Positioned between the 50th and 75th
percentile of the relevant benchmark
Set to reward fairly, attract, motivate
and retain the best people to achieve
Short-Term Incentive and Long-Term
comparisons
the delivery of strategic objectives.
Incentive.
Total Fixed Remuneration (TFR)
Comprising base salary, and statutory
– Considered in the context of the total
remuneration package payable to an
Set with reference to the Executive’s
knowledge, experience and skills, the
superannuation.
Executive to ensure that the entire
remuneration package is fair and
competitive.
magnitude of the responsibilities and
complexities associated with the role.
Aims to ensure that remuneration is
– Reviewed annually with remuneration
competitive and aligned with relevant
changes effective from 1 July.
benchmark comparisons.
Short-Term Incentive (STI) Plan
– Performance targets comprising of:
Performance incentive is directed to
At risk component set as a percentage
of TRO granted in a mix of cash and
– Financial objectives (50%)
– Operational objectives (50%)
achieving Board approved targets,
reflective of market circumstances.
performance rights.
– Awarded as 50% Cash and 50% Equity
deferred in performance rights for
two years.
Long-Term Incentive (LTI) Plan
– Performance targets are set annually
Executive rewards linked to
At risk component set as a percentage
of TRO granted in the form of
performance rights annually.
and comprise of:
– Total Shareholder Returns (60%)
– Earnings Per Share (40%)
shareholder value accretion by
providing appropriate equity
incentives.
– Awarded as 100% Equity. Equity is held
for three years from grant date.
Minimum Shareholding Requirement
– Shareholding requirement to the value
To bolster sustainable long-term
(MSR)
of 100% of TRO.
growth, performance and executive
– MSR to be achieved within a five-year
retention.
period from the later of 1 July 2021 or the
commencement of appointment.
59
Annual Report 2023
Executive remuneration
Reviewed annually and operating over a three-year cycle, the current Remuneration Framework commenced on 1 July 2022 and
will conclude on 30 June 2025. Our approach has been informed by factors including an independent review by an external
remuneration consultant, proxy advisor and shareholder feedback, and our desire to pursue sustainable long-term growth for the
Group and our shareholders.
The PCC completed a review of the Remuneration Framework in FY22 through independent remuneration advisor, Crichton +
Associates. 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 TRO for each Executive is intended to be positioned at the 3rd quartile, that is between the median
and 75th percentile of Executive remuneration of the comparator benchmark group. TRO above the 75th percentile may be
accessed if Jumbo outperforms.
The comparator companies used for the purposes of the benchmark assessment of Executive 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.
Jumbo (MCAP) was positioned at about the median of this group at the time of benchmarking.
In FY23, enhancements to the Remuneration Framework were implemented. A notable change resulting from the review involved
the Long-Term Incentive (LTI) component of remuneration. 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 three 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 was also 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 between
the 3rd quartile of the relevant benchmark comparisons.
Total Fixed Remuneration (TFR) for Executive KMP will generally be positioned between the median and 62.5th percentile of rel evant
comparable ASX listed companies assessed from time to time, as well as subject matter expertise and performan ce in the role.
The review showed that the level of TFR for direct reports of the CEO were below market median, having not increased for the past
two consecutive years at the time of the review. In response, the PCC recommended an increase of TFR for the CFO, CTO and COO,
but due to market conditions the increase was deferred for 12 months to FY24. The PCC recommended that the CEO’s TFR and TRO
remain unchanged for FY24. This recommendation was approved by the Board.
In August 2022, Abby Perry joined the Executive KMP as Chief People Officer. The PCC recommended, and the Board approved, a
similar percentage increase in TFR for the CPO for FY24. A staged increase of TFR for the CPO was recommended over the
remaining period of the current Remuneration Framework, to position the TFR between the median and 62.5 th percentile of the
comparator benchmark group.
The TRO for the CFO, CTO and COO has increased modestly in FY24 but remains below the PCC’s targeted range. The TRO for the
CPO is also below the targeted range and a stepped process to align the CPO within the target range has been agreed by the PCC
and Board, to be implemented over a two-year period. The TRO mix for these Executives has also changed, with a higher weighting
towards TFR, now 60% of TRO (previously 50%) with the remaining 40% split equally between the STI (20%) and LTI (20%)
components. The new TRO mix for direct reports of the CEO seeks to balance the need for ongoing cost discipline in a low
economic growth environment while ensuring Executives remain competitively remunerated for the role they perform. The PCC will
continue to annually review the TRO, including the proportion of the at-risk components (STI and LTI), to ensure they align with the
targeted range. A further benchmarking review is likely at the end of FY25.
60
Annual Report 2023
FY24 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.
Short-term incentive (STI)
Metric
Target
Financial
(50%)
Underlying
NPATA
Incremental scale of a minimum 6% increase in NPATA (representing 10% of STI
financial award) to 20% and above increase in NPATA (representing 100% of STI
financial award)
(Gate for Non-Financial KPIs)
Non-
Growth
SaaS Contract Renewal
Financial
(50%)
Domestic Agreement (Reseller or SaaS)
Integration of Acquisitions
Earnings Accretive Acquisition of ELM or Similar Business
Sustainability
Gender Diversity
Women in Leadership
Net Zero
Sustainability Benchmarking
Increase of Active Players
Employee Engagement Index
Voluntary Employee Attrition
Performance Evaluation
Customer
Employee
Individual
Long-Term Incentive (LTI)
Metric
Target
JIN Shares/
Relative TSR
earnings
(Comparator Group – ASX 300 Accumulated Index)
Underlying EPS Growth
Weighting
100%
40%
20%
20%
10%
10%
Weighting
60%
40%
Further details on key components
Short-term incentive (STI)
– 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 service period, with sale of shares restricted for the lock-up
period.
– Executives will have entitlement to dividends and voting rights during their 12-month lock-up period.
61
Annual Report 2023
Setting the annual
The PCC set an organisational total financial STI pool before the start of the financial year based on
STI pool
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 underlying 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.
Long-term incentive (LTI)
Rights are exercisable into shares three years after grant and achievement of the performance hurdles.
Equity grants will be awarded annually. 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.
Vesting conditions
Total Shareholder Return (60%)
– relative to the component companies within the Comparator Group share price measure based on
the 20-trading day VWAP after release of the Financial Year end financial results (excluding the
release date).
– The Comparator Group is the ASX 300 Accumulated Index (ASX: AXKOA) with no companies/sectors
excluded.
– Vesting as follows:
<50th percentile Target - 0% vesting;
50th percentile Target - 50% vesting;
>50th <75th percentiles between Target and Stretch - straight line vesting; and
>=75th percentile Stretch - 100% vesting.
Underlying Earnings per Share Growth (40%)
– Underlying Earnings Per Share Growth – 3-year compound annual growth rate over a 3-year
performance period.
– Vesting as follows:
<6% Hurdle – 0% vesting;
>6% <8% between Hurdle and Target – straight line vesting;
8% Target – 50% vesting;
>8% <12% between Target and Stretch – straight line vesting; and
>=12% Stretch – 100% vesting;
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.
If an Executive KMP had ceased employment on or after 1 April 2023 up to 30 June 2023 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.
Rights will lapse if the vesting conditions are 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 STI and 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 Jumbo’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.
62
Annual Report 2023
30. FY2023 Executive remuneration outcomes
30.1 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 value. 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.
63
Annual Report 2023
30.2 Fixed Remuneration
The fixed remuneration of Executive KMP consists of cash salary and statutory superannuation contributions.
2023
Mike Veverka
David Todd
Xavier Bergade
Brad Board
Abby Perry 2
Duration of service agreement
Fixed remuneration as at end of FY20231
No fixed duration
No fixed duration
No fixed duration
No fixed duration
No fixed duration
$800,000
$350,000
$350,000
$350,000
$221,000
1 Fixed remuneration includes base salary plus superannuation at 10.5%
2 included in KMP from 26 August 2022
For FY2024, the PCC determined an increase is to be made to the fixed remuneration for the Executive KMP. This increase is
inclusive of statutory superannuation contributions that will increase to 11% from 1 July 2023.
30.3 Short-term incentive outcomes
The Group's performance in FY2023 was impacted by an unfavourable run of jackpots, resulting in a 2.8% increase in underlying
NPAT growth. Underlying NPAT was also impacted by the amortisation of acquired intangible assets for Stride and StarVale.
Excluding this impact, underlying Net Profit After Tax before the amortisation of acquired intangible assets increased 8.5%. A
number of operational targets were achieved, supporting future growth and sustainability. Employee engagement was down 13%
to 77% (90% in FY22), attributable to the transition to hybrid work and inclusion of acquired businesses undergoing integration. As a
result of the performance, the Board awarded Executives 40.5% 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 with all related expenses accounted
for in FY2023. The FY2023 performance against key measures and the impact on variable remuneration are outlined below.
Metric
STI
Target
Weighting
Performance
Achievement
of Target
Financial
Underlying NPAT
6% to 20% and above increase
100%
2.8% increase
(50%)
Non-
Financial
(50%)
Group Financials
Underlying NPAT
(Gate for Non-Financial KPIs)1
ROIC
Lotterywest expanded agreement
40%
Sustainability
Gender diversity
10%
Climate Active certification
Carbon neutral
Sustainability benchmarking
Increase of active players
Employee engagement index
Voluntary employee attrition
Customer
Employee
Individual
Performance evaluation
30%
10%
10%
$33.1m
31.6%
$37.5m
56:44
Certified
Neutral
> 50%
4,036,608
77%
18.3%
90%
0%
53%
100%
59%
100%
100%2
100%
100%
99.4%
35%
78%
100%
1 Gate for non-financial KPIs based on the Group business plan. Failure to meet the minimum threshold enables the Board to apply its discretion and
adjust the remaining achievement % awarded for the non-financial KPI components. 2 see section 30.3.1 - Board discretion
STI Outcomes
STI (% of Target)
FY 2023
40.5
FY 2022
80
FY 2021
62.5
FY 2020
50
FY 2019
86
30.3.1 Board discretion
Following an extensive internal process including independent verification, the Board has confidence that the Group has met the
criteria in order to achieve Climate Active Certification. Our certification feedback is still under review due to delays in processing
as notified by Climate Active.
64
Annual Report 2023
30.3.2 Awards granted and forfeited in FY2023
The table below shows for each Executive KMP, how much of their STI was awarded and how much was forfeited.
2023
Mike Veverka
David Todd
Xavier Bergade
Brad Board
Abby Perry 1
1 included in KMP from 26 August 2022
Total Opportunity $
Awarded %
Forfeited %
400,000
175,000
175,000
175,000
110,500
40.5
40.5
40.5
40.5
40.5
59.5
59.5
59.5
59.5
59.5
30.3.3 Deferred short-term incentive component
50% of any STI for Executive 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 5,736 FY23 STI rights to Mike Veverka subject to shareholder approval at the 2023 AGM and
9,112 FY23 STI rights to KMP subject to Director approval at a Board meeting on the 2023 AGM date.
30.4 Long-term incentive outcomes
The table below shows for each Executive KMP, the value of rights that were granted in FY2023 as part of their TRO.
2023
Mike Veverka
David Todd
Xavier Bergade
Brad Board
Abby Perry 1
1 included in KMP from 26 August 2022
Total granted $
400,000
175,000
175,000
175,000
110,500
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 2023 are as follows:
Grant date
10 November 2022
10 November 2022
Vesting date
14 September 20251
14 September 20251
Grant date fair value
$5.592
$12.535
120 trading days after the release of the 2025 Financial Year end financial results.
Details of the terms and conditions of STI and LTI rights granted to Executive KMP as compensation during the reporting period are
as follows:
FY2023
No. rights
granted
No.
rights
vested
Fair value
per right at
grant date $
Exercise
price $
Amount
paid or
payable $
Vesting date
Date exercisable
Directors
Mike Veverka
LTI rights FY2023 – TSR hurdle
17,467
LTI rights FY2023 – EPS hurdle
11,645
-
-
5.592
12.535
STI rights FY2022
11,134
11,134
13.669
-
-
-
-
-
-
14 September
20251
14 September
20251
30 Jun 2023
14 September
2026
14 September
2026
30 Jun 2023
65
FY2023
Annual Report 2023
No. rights
granted
No.
rights
vested
Fair value
per right at
grant date $
Exercise
price $
Amount
paid or
payable $
Vesting date
Date exercisable
Other key management personnel
Xavier Bergade
LTI rights FY2023 – TSR hurdle
7,642
LTI rights FY2023 – EPS hurdle
5,092
-
-
5.592
12.535
STI rights FY2022
Brad Board
4,871
4,871
13.669
LTI rights FY2023 – TSR hurdle
7,642
LTI rights FY2023 – EPS hurdle
5,092
-
-
5.592
12.535
STI rights FY2022
David Todd
4,871
4,871
13.669
LTI rights FY2023 – TSR hurdle
7,642
LTI rights FY2023 – EPS hurdle
5,092
-
-
5.592
12.535
STI rights FY2022
Abby Perry 2
LTI rights FY2023 – TSR hurdle
4,825
4,871
4,871
13.669
-
-
5.592
12.535
LTI rights FY2023 – EPS hurdle
3,217
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14 September
20251
14 September
20251
30 Jun 2023
14 September
20251
14 September
20251
30 Jun 2023
14 September
20251
14 September
20251
30 Jun 2023
14 September
2026
14 September
2026
30 Jun 2023
14 September
2026
14 September
2026
30 Jun 2023
14 September
2026
14 September
2026
30 Jun 2023
14 September
20251
14 September
20251
14 September
2026
14 September
2026
1 20 trading days after the release of the 2025 Financial Year end financial results.
2 included in KMP from 26 August 2022
The LTI rights FY2023 are granted for no consideration, have a three-year term, and are exercisable when the vesting conditions
have been met. Please see Further Details on Key Components on page 61 for more information.
The STI rights FY2022 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 FY2023 was $9.55.
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 2023 are as follows:
No. rights
granted
No.
rights
vested
Fair value
per right at
grant date
Exercise
price
Amount
paid or
payable
Vesting date
Date
exercisable
Other key management personnel
FY2023
Directors
Mike Veverka
LTI rights FY2021
LTI rights FY2022
LTI rights TLC
David Todd
LTI rights FY2021
LTI rights FY2022
LTI rights TLC
Xavier Bergade
LTI rights FY2021
LTI rights FY2022
LTI rights TLC
Brad Board
LTI rights FY2021
LTI rights FY2022
LTI rights TLC
40,201
23,419
16,393
80,013
17,588
10,246
8,197
17,588
10,246
8,197
17,588
10,246
8,197
108,093
$6.254
$9.466
$7.565
$6.254
$9.466
$7.565
$6.254
$9.466
$7.565
$6.254
$9.466
$7.565
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Jul 2023
1 Jul 2024
4 Nov 2023
1 Jul 2024
1 Jul 2025
4 Nov 2023
-
-
-
-
-
-
1 Jul 2023
1 Jul 2024
1 Jul 2024
1 Jul 2025
4 Nov 2023
4 Nov 2023
1 Jul 2023
1 Jul 2024
1 Jul 2024
1 Jul 2025
4 Nov 2023
4 Nov 2023
1 Jul 2023
1 Jul 2024
1 Jul 2024
1 Jul 2025
4 Nov 2023
4 Nov 2023
66
Annual Report 2023
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.
30.4.1 Options
There were no options granted to Executive KMP during the reporting period.
30.4.2 Equity instruments issued on exercise of remuneration rights and options
The following equity instruments were issued during the reporting period to Executive KMP as a result of rights and options
exercised that had previously been granted as compensation.
FY2023
Directors
Susan Forrester – rights
Sharon Christensen - rights
Mike Veverka - rights
Other key management personnel
David Todd – rights
Xavier Bergade - rights
Xavier Bergade - options
Brad Board - rights
Number of shares issued on
Number of rights and
Amount paid
Amount unpaid
exercise of rights and options
options exercised
per share
per share
1,366
1,366
11,134
4,871
4,871
300,000
4,871
1,366
1,366
11,134
4,871
4,871
300,000
4,871
-
-
-
-
-
$3.50
-
-
-
-
-
-
-
-
30.4.3 Value of rights to Executive KMP
Details of options and rights that were granted and that are exercised during the year to Executive KMP as part of their
remuneration are as follows:
FY2023
Directors
Susan Forrester
Sharon Christensen
Mike Veverka – rights
Other key management personnel
David Todd – rights
Xavier Bergade – rights
Xavier Bergade – options
Brad Board - rights
Value of options or rights at grant date1
$
Value of options or rights exercised
at exercise date2
$
152,191
66,582
66,582
166,932
66,582
162,111
69,460
69,460
4,176,000
69,460
1 The value of options and rights granted during the period differs to the expense recognised as part of each Executive KMP's 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.
Executive KMP 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 Executive KMP are
as follows:
67
Annual Report 2023
Options to deferred shares
FY2023
Balance at
Granted as
Exercised
Forfeited
Balance at
Vested at
Total vested
Total vested
1 July 2022
remuneration
during the
30 June 2023
30 June 2023
and
and un-
during the
year
year
exercisable at
exercisable at
30 June 2023
30 June 2023
300,000
-
(300,000)
-
-
-
-
-
Xavier
Bergade
Rights to deferred shares
FY2023
Balance at
Granted as
Exercised
Forfeited
Balance at
Vested at
Total vested
Total vested
1 July 2022
remuneration
during the
30 June 2023
30 June 2023
and
and un-
Mike
Veverka
Xavier
Bergade
Brad Board
David Todd
Abby Perry 1
during the
year
100,215
year
40,246
(11,134)
(20,202)
109,125
44,869
17,608
(4,871)
(8,838)
48,768
44,869
44,869
1,393
236,215
17,608
17,608
8,042
101,112
(4,871)
(4,871)
-
(8,838)
(8,838)
-
48,768
48,768
9,435
(25,747)
(46,716)
264,864
1 included in KMP from 26 August 2022
exercisable at
exercisable at
30 June 2023
30 June 2023
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31. Total Executive remuneration and benefits
2023
Short term employee benefits
Post-
Long term benefits
Equity-settled
Cash salary,
Cash
Non-
employment
benefits
Super-
Long
Termination
fees and
annual
leave
$
769,811
322,500
316,742
316,742
165,385
1,891,180
bonus
monetary
annuation
$
benefits
$
$
-
-
-
-
-
-
30,189
27,500
33,258
33,258
17,365
141,570
81,048
35,458
35,458
35,458
22,389
209,811
service
leave
$
9,513
5,012
4,041
4,782
-
23,348
Mike Veverka
David Todd
Xavier
Bergade
Brad Board
Abby Perry2
Total Executive
remuneration
benefits
$
share-based
payments
Options and
Rights1
$
Total
Proportion of
$
remuneration
that is
performance
-
-
-
-
-
-
457,880
1,348,441
185,452
185,452
575,922
574,951
185,452
575,692
33,950
1,048,186
239,089
3,314,095
based
%
40.3
38.4
38.4
38.4
23.6
38.0
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 26 August 2022
68
Annual Report 2023
2022
Short term employee benefits
Post-
Long term benefits
Equity-settled
Cash salary,
Cash
Non-
employment
benefits
Super-
share-based
payments
Long
Termination
Options and
Total
Proportion of
bonus
monetary
annuation
$
benefits
$
fees and
annual
leave
$
service
leave
$
12,115
5,300
4,077
33,566
27,500
31,818
31,818
5,300
-
-
124,702
26,792
$
-
-
-
-
-
-
benefits
$
Rights1
$
$
remuneration
that is
performance
-
-
-
-
-
-
491,817
1,518,984
212,136
212,136
661,505
660,356
212,136
661,794
102,330
636,080
1,230,555
4,138,719
based
%
42.9
42.7
42.7
42.6
27.1
40.4
Mike Veverka
821,486
160,000
David Todd
Xavier
Bergade
Brad Board
Richard
Bateson2
Total Executive
remuneration
346,569
342,325
70,000
70,000
342,540
463,750
70,000
70,000
2,316,670
440,000
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 to 30 June 2022
32. Non-Executive Director Remuneration
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 strateg ic
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 Jumbo’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 as an invitee.
32.1 Non-Executive Director fees
Non-Executive Directors receive a board fee and fees for chairing or participating on board committees per the table below. The
fees are inclusive of superannuation. 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 Non-Executive Director Rights Plan was established in March 2022. Jumbo may, at the discretion of the Board, offer and issue
Awards to Non-Executive Directors in the form of Performance Rights. Rights are offered for a nil cost and are exercisable at nil cost.
Rights will vest pro-rata if the services of the Director cease for any reason between 1 July and 30 June for each tranche of rights.
Rights are restricted until they are exercised or expire. Rights will expire, if not exercised, three (3) years after the relevant vesting
date for each tranche of Rights. Participants of the Rights Plan include Susan Forrester and Sharon Christensen.
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)
FY2023
$213,000
$125,000
$15,000
$15,000
$10,000
$10,000
FY2022
$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 Jumbo. 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.
69
Annual Report 2023
32.2 Value of rights to Non-Executive Directors
Details of rights over ordinary shares of Jumbo Interactive Limited, held indirectly or beneficially by non-executive Directors are
as follows:
Rights to deferred shares
FY2023
Balance at
Granted as
Exercised
Other
Balance at
Vested at
Total vested
Total vested
1 July 2022
remuneration
during the
changes
30 June
30 June
and
and un-
during the year
year
during the
2023
2023
exercisable at
exercisable at
Susan
Forrester
Sharon
Christensen
4,098
4,098
8,196
-
-
-
(1,366)
(1,366)
(2,132)
year
-
-
-
2,732
2,732
5,464
30 June 2023
30 June 2023
-
-
-
-
-
-
-
-
-
The NED service rights are granted for a consideration of $nil per right and have a time-bound vesting period only.
32.3 Total Non-Executive remuneration and benefits
2023
Short term employee benefits
Post-
employment
benefits
Long term benefits
Cash salary,
fees and
annual leave
$
Cash
bonus
$
Non-monetary
benefits
$
Super-
annuation
$
Long
service
leave
$
Termination
benefits
$
Equity-
settled
share-
based
payments
Options and
Rights
$
Total
$
Susan Forrester
185,068
Sharon
Christensen
114,583
Giovanni Rizzo
146,437
Total Non-
Executive
remuneration
446,088
1 salary sacrifice for NED rights
-
-
-
-
-
-
-
-
19,432
-
3,563
22,995
-
-
-
-
-
-
-
-
28,5001
233,000
35,4171
150,000
-
150,000
63,917
533,000
Proportion of
remuneration
that is
performance
based
%
-
-
-
-
2022
Short term employee benefits
Post-
employment
benefits
Long term benefits
Equity-
settled
share-
based
payments
Options and
Rights
$
Total
$
Proportion of
remuneration
that is
performance
based
%
Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Long
service
leave
$
Termination
benefits
$
-
-
-
-
-
-
-
-
19,417
3,409
13,636
36,462
-
-
-
-
-
-
-
-
19,4161
233,000
25,0001
150,000
-
150,000
44,416
533,000
-
-
-
-
Cash
salary,
fees and
annual
leave
$
194,167
121,591
Susan
Forrester
Sharon
Christensen
Giovanni Rizzo
136,364
Total Non-
Executive
remuneration
452,122
1 salary sacrifice for NED rights
70
Annual Report 2023
33. Executive KMP shareholdings
FY2023
Balance at 1 July 2022
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 2023
Directors
Mike Veverka
Susan Forrester
Sharon
Christensen
8,856,901
30,000
3,550
Giovanni Rizzo
Other key management personnel
David Todd
Xavier Bergade
57,599
457,599
2,000
Brad Board
Abby Perry 1
33,227
-
9,440,876
1 included in KMP from 26 August 2022
End of Remuneration Report - audited
-
-
-
-
-
-
-
-
-
11,134
1,366
1,366
-
4,871
304,871
4,871
-
328,479
-
1,000
1,000
2,000
-
(450,000)
2,190
8,868,035
32,366
5,916
4,000
62,470
312,470
40,288
(443,810)
9,325,545
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Auditor’s independence declaration to the directors of Jumbo Interactive
Limited
As lead auditor for the audit of the financial report of Jumbo Interactive Limited for the financial year
ended 30 June 2023, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Jumbo Interactive Limited and the entities it controlled during the
financial year.
Ernst & Young
Susie Kuo
Partner
25 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
71
72
Annual Report 2023
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: Other non-current assets
Note 12: Trade and other payables
Note 13: Employee benefit obligations
Note 14: Lease liabilities
CAPITAL AND FINANCIAL RISK MANAGEMENT
Note 15: Capital risk management
Note 16: Dividends
Note 17: Equity and reserves
Note 18: Borrowings
Note 19: Financial risk management
GROUP STRUCTURE
Note 20: Business combination
Note 21: Controlled subsidiaries
Note 22: Parent disclosures
OTHER INFORMATION
Note 23: Investments accounted for using the Equity Method
Note 24: Related party transactions
Note 25: Key Management Personnel compensation
Note 26: Share-based payments
Note 27: Remuneration of auditor
74
75
76
77
78
80
80
83
85
86
88
90
90
91
91
93
99
100
100
101
102
103
103
104
105
106
107
112
112
115
116
118
118
119
120
120
123
73
Annual Report 2023
Note 28: Summary of other significant accounting policies
UNRECOGNISED ITEMS
Note 29: Contingencies
Note 30: Events after the reporting date
DIRECTORS' DECLARATION
124
127
127
127
128
74
Annual Report 2023
Jumbo Interactive Limited and its Controlled Subsidiaries
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
For the year ended 30 June 2023
Revenue from operations
Cost of sales
Gross profit
Other revenue/income
Distribution expenses
Marketing costs
Occupancy expenses
Administrative expenses
Finance costs
Impairment of receivables
Other
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
Total comprehensive income for the year attributable to the owners of Jumbo
Interactive Limited
Earnings Per Share (cents per share)
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Notes
2
3
2
3
3
3
4
5
5
2023
$’000
118,712
(17,953)
100,759
839
(19)
(6,572)
(291)
(46,801)
(775)
-
(501)
46,639
(15,070)
31,569
3,322
3,322
34,891
cents
50.2
49.9
2022
$’000
104,251
(14,473)
89,778
1,058
(20)
(8,597)
(146)
(36,457)
(303)
(76)
-
45,237
(14,061)
31,176
(775)
(775)
30,401
cents
49.9
49.3
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
75
Annual Report 2023
Jumbo Interactive Limited and its Controlled Subsidiaries
Consolidated Statement of Financial Position
As at 30 June 2023
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
Other non-current 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
12
14
4
20 (b)
13
14
13
20 (b)
4
16
2023
$’000
53,190
8,046
29
8,411
69,676
506
69,774
3,342
1,899
10,625
86,146
155,822
30,122
1,355
2,599
8,391
1,078
2022
$’000
68,930
6,065
31
-
75,026
695
38,680
2,864
1,828
12,125
56,192
131,218
24,530
1,022
613
1,820
818
43,545
28,803
2,491
575
-
-
9,222
12,288
55,833
99,989
79,807
13,779
6,403
99,989
2,181
525
22
1,638
5,066
9,432
38,235
92,983
81,390
9,610
1,983
92,983
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
76
Annual Report 2023
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
Consolidated group
Contributed
Profits
Share-based
Foreign
Financial assets
Total equity
equity
$’000
appropriation
payments
currency
at fair value
$’000
reserve
$’000
reserve
$’000
translation
through other
reserve
comprehensive
$’000
income reserve
80,177
3,730
4,227
(506)
$’000
(2,302)
Issue of shares (Note
1,213
-
-
-
-
31,176
-
31,176
-
-
(25,296)
-
1,213
(25,296)
-
-
-
-
-
1,339
1,339
-
(775)
(775)
-
-
-
-
-
-
-
-
-
-
-
85,326
31,176
(775)
30,401
1,213
(25,296)
1,339
(22,744)
81,390
9,610
5,566
(1,281)
(2,302)
92,983
81,390
9,610
5,566
(1,281)
(2,302)
92,983
-
-
-
31,569
-
31,569
-
-
-
(38)
-
-
1,136
-
3,322
3,322
-
-
-
-
-
-
-
-
-
-
-
-
-
31,569
3,322
34,891
1,012
(27,400)
(2,633)
1,136
(27,885)
Issue of shares (Note
1,050
-
17(a))
Dividends paid (Note 16)
Share buy-back
Share-based payments
(Note 26)
-
(27,400)
(2,633)
-
-
-
Total transactions with
(1,583)
(27,400)
1,098
owners in their capacity
as owners
Balance at
30 June 2023
79,807
13,779
6,664
2,041
(2,302)
99,989
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
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
17(a))
Dividends paid (Note 16)
Share-based payments
(Note 26)
Total transactions with
owners in their capacity
as owners
Balance at
30 June 2022
Balance at 1 July 2022
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
77
Annual Report 2023
Jumbo Interactive Limited and its Controlled Subsidiaries.
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
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
Payments for other intangibles
Payment for purchase of business net of cash acquired
Payment for deposit for contingent consideration
Payment of contingent consideration
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
Payments for share buy-backs
Principle 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
2023
$’000
2022
$’000
131,645
113,644
(64,746)
(56,026)
516
(728)
(47)
(12,009)
54,631
(200)
(8,216)
(20,041)
(8,519)
(3,117)
-
-
63
(174)
(129)
(13,185)
44,193
(326)
(5,715)
(7,955)
-
-
691
4
(40,093)
(13,301)
1,050
(2,633)
(1,074)
(27,400)
(30,057)
(15,519)
(221)
68,930
53,190
1,213
-
(1,017)
(25,296)
(25,100)
5,792
(1)
63,139
68,930
6 (b)
8
9 (a)
20
8
16
15
6 (a)
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
78
Annual Report 2023
Jumbo Interactive Limited and its Subsidiaries
Notes to the Consolidated Financial
Statements
For the year ended 30 June 2023
About this report
Jumbo Interactive Limited is a company limited by shares, incorporated and domiciled in Australia, whose shares are publicly
traded on the Australian Securities Exchange (ASX: JIN), and is a for-profit entity for the purposes of preparing the financial
statements. The consolidated financial statements are for the consolidated entity consisting of Jumbo Interactive Limited (th e
Company) and its subsidiaries and together are referred to as the Group or Jumbo.
The consolidated financial statements were approved for issue in accordance with a resolution by the Directors on 25 August 2023.
The Directors have the power to amend and reissue the consolidated financial statements.
The consolidated financial statements are general purpose financial statements which:
•
•
•
have been prepared in accordance with the Corporations Act 2001, Australian Accountings Standards and Interpretations
issued by the Australian Accounting Standards Board (AASB) and International Financial reporting Standards (IFRS) issued by
the International Financial Standards Board;
have been prepared under the historical cost convention;
are presented in Australian dollars (A$), 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 2022.
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.
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.
79
Annual Report 2023
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:
Principal versus agent considerations
Estimated useful life of website development costs
Goodwill and other intangible assets
Contingent consideration at fair value
Note
2
9
9
20 (b)
Page
83
93
93
110
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. Lower levels of customer activity and large jackpot activity which in turn impacted Lottery Retailing TTV and revenue.
2. The ‘step up’ in the TLC service fee from 2.5% to 3.5% of the subscription cost of the lottery tickets sold, resulting in a significantly
higher cost of sales in Lottery Retailing.
3. The acquisition of Stride Management Corp. in Canada for cash on 1 June 2022 (see Note 20: Business Combination for details).
As a result FY2022 only includes a one-month contribution from Stride, while FY2023 includes a full 12-month contribution.
4. The acquisition of the StarVale Group of Companies in the UK using a combination of cash and debt on 1 November 2022 (see
Note 20: Business Combination for details). As a result, FY2023 includes an eight-month contribution from StarVale (FY2022: nil).
5. Payment of dividends (see Note 16: Dividends for details).
80
Annual Report 2023
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)
80
80
83
85
86
88
Note 1: Segment reporting
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 in Australia.
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. These services are provided in addition to the proprietary-owned lottery software platforms to licensed
charities in Australia, Canada and the UK. The segment operates as Jumbo Fundraising (JF) in Australia, Gatherwell Ltd
(Gatherwell) and StarVale Group of companies (StarVale) as External Lottery Managers (ELM) in the UK, and Stride Management
Corp. (Stride) as an ELM for charity lotteries 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 relevant lottery
ticket sales.
81
Expenses
Annual Report 2023
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.
(b) Segment information
The segment information provided to the CEO is as follows:
2023
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
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
91,287
-
91,287
(49,791)
41,496
-
(3,003)
(7)
(39)
(5,957)
(4)
(189)
(133)
(1,630)
(10,962)
30,534
SaaS
$’000
8,710
33,683
42,393
(431)
41,962
-
(9,894)
-
(81)
(180)
(1)
(1,796)
(267)
(2,052)
(14,271)
27,691
Managed
Services
$'000
18,715
Intersegment
eliminations
$'000
-
-
18,715
(1,414)
17,301
-
(6,879)
-
(42)
(381)
(156)
(738)
(361)
(2,552)
(11,109)
6,192
(33,683)
(33,683)
33,683
-
-
-
-
-
-
-
-
-
-
-
-
Total
$'000
118,712
-
118,712
(17,953)
100,759
-
(19,776)
(7)
(162)
(6,518)
(161)
(2,723)
(761)
(6,234)
(36,342)
64,417
118,712
118,712
64,417
(47)
(1,250)
(1,136)
(483)
(9)
(53)
(808)
(59)
(2,749)
(6,594)
57,823
323
58,146
(11,295)
46,851
(212)
46,639
(15,070)
31,569
82
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
Other expenses
Fair value movement on financial
liabilities
Total other reconciling items
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)
Annual Report 2023
Lottery
Retailing
$’000
91,098
-
91,098
(48,002)
43,096
-
(2,937)
(7)
(20)
(7,850)
(1)
(163)
(128)
(1,878)
(12,984)
30,112
SaaS
$’000
8,318
34,390
42,708
(317)
42,391
-
(9,427)
-
(112)
(463)
(1)
(1,369)
(210)
(1,865)
(13,447)
28,944
Managed
Services
$'000
4,835
Intersegment
eliminations
$'000
-
-
4,835
(544)
4,291
(10)
(2,230)
-
(16)
(252)
(151)
(148)
(131)
(509)
(3,447)
844
(34,390)
(34,390)
34,390
-
-
-
-
-
-
-
-
-
-
-
-
Total
$'000
104,251
-
104,251
(14,473)
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)
45,303
(66)
45,237
(14,061)
31,176
83
Annual Report 2023
(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
2023
$’000
96,288
11,108
8,127
1,030
2,998
119,551
2022
$’000
95,650
4,159
618
940
3,942
105,309
Non-current assets in Australia are $52,990,000 (2022: $33,455,000). Non-current assets in other countries are (i) United Kingdom
$7,301,000 (2022: $7,156,000), (ii) Canada $13,329,000 (2022: $13,749,000) and (iii) Fiji $3,000 (2022: $4,000). 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.
The Lottery Corporation generates more than 10% of total revenue.
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
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.
Consolidated Group
2023
$’000
811
117,901
118,712
516
258
-
65
839
119,551
2022
$’000
1,514
102,737
104,251
63
457
525
13
1,058
105,309
84
Annual Report 2023
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.
2023
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
2022
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
Lottery
Retailing
$’000
87,259
-
-
1,030
2,998
91,287
91,287
-
-
91,287
86,590
2,549
777
-
-
1,371
91,287
Lottery
Retailing
$’000
86,217
-
-
940
3,941
91,098
91,098
-
-
91,098
85,513
2,979
701
-
-
1,905
91,098
SaaS
$’000
41,990
403
-
-
-
42,393
-
38,829
3,564
42,393
-
-
-
42,393
-
-
42,393
SaaS
$’000
42,618
90
-
-
-
42,708
-
39,415
3,293
42,708
-
-
-
42,708
-
-
42,708
Managed
Services
$’000
Intersegment
Eliminations
$’000
100
10,543
8,072
-
-
18,715
-
18,715
-
18,715
-
-
-
-
18,715
-
18,715
(33,683)
-
-
-
-
(33,683)
-
(33,683)
-
(33,683)
-
-
-
(33,683)
-
-
(33,683)
Managed
Services
$'000
Intersegment
Eliminations
$'000
148
4,069
618
-
-
4,835
-
4,835
-
4,835
-
-
-
-
4,835
-
4,835
(34,390)
-
-
-
-
(34,390)
-
(34,390)
-
(34,390)
-
-
-
(34,390)
-
-
(34,390)
Total
$’000
95,666
10,946
8,072
1,030
2,998
118,712
91,287
23,861
3,564
118,712
86,590
2,549
777
8,710
18,715
1,371
118,712
839
119,551
Total
$'000
94,593
4,159
618
940
3,941
104,251
91,098
9,860
3,293
104,251
85,513
2,979
701
8,318
4,835
1,905
104,251
1,058
105,309
85
Annual Report 2023
Recognition and measurement
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 using their proprietary lottery software platform to provide ‘lottery-in-a-
box' lottery management services to society lotteries in the UK, StarVale providing a full range of weekly lottery, raffle and prize
draw services in the UK, and Stride 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 effecti ve
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 the 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
Consolidated Group
2023
$’000
2022
$’000
677
17,276
17,953
789
13,684
14,473
269
178
86
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
Other costs of finance
Finance costs expensed
Occupancy expenses
– Short-term lease rentals minimum lease payments
Fair value movement on financial liabilities
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
– Deferred tax relating to overseas operations
Total income tax expense in profit or loss
Reconciliation
Annual Report 2023
Consolidated Group
2023
$’000
37
9,749
1,240
11,295
18,870
1,136
2,155
13,345
46,801
728
47
775
291
-
2022
$’000
37
7,474
1,053
8,742
14,277
1,339
1,580
10,519
36,457
129
174
303
146
-
2023
$’000
2,599
Consolidated
2022
$’000
613
Consolidated
2023
$’000
13,578
1,367
4
567
(446)
15,070
2022
$’000
12,805
971
55
230
-
14,061
Note
4(b)
4(b)
Profit before income tax expense
– Tax at the Australian tax rate 30% (2022:30%)
– Income tax effect of overseas tax rates
– Share options expensed during year
– Other
14,061
Total income tax expense in profit or loss
1 Includes a one-off tax charge of $861,000 in FY23 due to a change in the accounting and tax treatment of the capitalised $15 million extension fee paid under the Reseller
Agreements with The Lottery Corporation in August 2020 – please refer to Note 11 for further detail.
46,639
45,237
13,992
15,070
13,571
1,454
(717)
(116)
402
204
341
87
Annual Report 2023
(b) Deferred tax
Deferred tax liabilities (DTL)
Deferred tax liabilities
comprise temporary
differences recognised in the
profit or loss as follows:
Intangible assets
– Amortisation
Accruals
Other
Balance as at 30 June 2022
Intangible assets
– Amortisation
Accruals
Other
Balance as at 30 June 2023
Opening
balance
$’000
Charged to
Profit or Loss
$’000
Charged
directly to
equity
$’000
Adjustment on
acquisition
$’000
Foreign
exchange
differences
$’000
Closing
balance
$’000
1,404
48
-
1,452
2,655
49
2,362
5,066
1,251
1
-
1,252
1,103
(4)
(444)
655
-
-
2
2
-
-
-
-
-
-
2,348
2,348
-
-
3,316
3,316
-
-
12
12
-
-
185
185
2,655
49
2,362
5,066
3,758
45
5,419
9,222
Deferred tax assets (DTA)
Opening balance
Charged to Profit or
Charged directly to
Closing balance
$’000
Loss
$’000
equity
$’000
$’000
Deferred tax assets comprise
temporary differences recognised in
the profit or loss as follows:
Property, plant and equipment
– Depreciation
Accruals
Provisions
Other
Balance as at 30 June 2022
Property, plant and equipment
– Depreciation
Accruals
Provision
Other
Balance as at 30 June 2023
183
368
828
168
1,547
144
724
861
99
1,828
(39)
356
33
(69)
281
9
(420)
162
(18)
(267)
-
-
-
-
-
-
-
-
338
338
144
724
861
99
1,828
153
304
1,023
419
1,899
88
Annual Report 2023
Recognition and measurement
Current taxes
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, o ther 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.
Note 5: Earnings per share (EPS)
(a) Basic earnings per share
Basic EPS is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary
shares outstanding.
(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.
89
Annual Report 2023
(c) Profit after tax attributable to owners of the
Company used as numerator
Profit attributable to the owners of the Company
Consolidated
2023
$’000
31,569
2022
$’000
31,176
(d) Weighted average number of shares used as
denominator
Weighted average number of ordinary shares used as the denominator in calculating
62,925,396
62,537,615
basic EPS
Adjustments for calculation of diluted EPS:
– Options and rights
Weighted average number of ordinary shares used as the denominator in calculating
diluted EPS
320,844
659,619
63,246,240
63,197,234
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’.
Consolidated
2023
Number
2022
Number
90
Annual Report 2023
OPERATING ASSETS AND LIABILITIES
In this section
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.
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: Other non-current assets
Note 12: Trade and other payables
Note 13: Employee benefit obligations
Note 14: Lease liabilities
90
90
91
91
93
99
100
100
101
102
Note 6: Cash and cash equivalents
(a) Cash and cash equivalents
Total cash and cash equivalents
Included in the above balance:
General account balances
Online lottery customer account balances
Note
15
12
Consolidated
2023
$’000
2022
$’000
53,190
68,930
41,226
11,964
53,190
60,015
8,915
68,930
Online lottery customer account balances are deposits and prize winnings earmarked for payment to customers on demand.
At the end of 30 June 2023, $1,317,000 (2022: $1,153,000) 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
Non-cash flows
Amortisation
Depreciation
Fair value movement on contingent consideration
Share option expense
Consolidated
2023
$’000
2022
$’000
31,569
31,176
11,026
269
499
1,098
8,564
178
-
1,339
91
Annual Report 2023
Gain on sale of subsidiary
Net foreign exchange effects - (gain)/loss
Changes in operating assets and liabilities, net of the effects of purchase and disposal
of subsidiaries
Increase in trade receivables
Decrease in other receivables
Decrease/(increase) in inventories
Increase in DTA
Increase in trade payables
Increase 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
Consolidated
2023
$’000
-
(494)
(589)
1,015
2
(72)
592
2,724
538
1,146
1,986
3,322
54,631
2022
$’000
(525)
278
(204)
(1,739)
(15)
(281)
66
4,831
142
1,254
(96)
(775)
44,193
Consolidated
2023
$’000
4,846
-
4,846
290
2,910
8,046
2022
$’000
1,331
-
1,331
793
3,941
6,065
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 19(b): Financial risk management for details.
Note 8: Property, plant and equipment
Plant and equipment – at cost
Accumulated depreciation
Leasehold improvements – at cost
Accumulated amortisation
Total property, plant and equipment
Consolidated
2023
$’000
3,461
2022
$’000
3,102
(3,049)
(2,530)
412
786
(692)
94
506
572
777
(654)
123
695
92
Annual Report 2023
Movements in carrying amounts
Consolidated Group
Plant and
Leasehold
equipment
Improvements
$’000
$’000
2022
Balance at the beginning
of year
Additions
Additions through
acquisition
Disposals
Effects of movements in
foreign exchange
Depreciation/amortisation
expense
236
326
186
(4)
6
(178)
Carrying amount at the
572
end of year
2023
Balance at the beginning
of year
Additions
Additions through
acquisition
Disposals
Effects of movements in
foreign exchange
572
167
382
(364)
(76)
Depreciation/amortisation
(269)
expense
Carrying amount at the
412
end of year
160
-
-
-
-
(37)
123
123
8
-
-
-
(37)
94
Total
$’000
396
326
186
(4)
6
(215)
695
695
175
382
(364)
(76)
(306)
506
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 th e 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 generat ed
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.
93
Annual Report 2023
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
Two to five years
Leasehold improvements
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 costs1
Accumulated amortisation
Net carrying value
Software costs
Accumulated amortisation
Net carrying value
Domain names – cost
Accumulated impairment losses
Net carrying value
Other
Accumulated amortisation
Net carrying value
Consolidated
2023
$’000
30,409
(855)
29,554
23
(23)
-
55,690
(40,588)
15,102
25,391
(2,896)
22,495
2,735
(1,046)
1,689
915
(62)
853
260
(179)
81
Total intangibles
1 The increase in customer contracts and relationship costs reflects the acquisition of StarVale ($14 million).
69,774
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
915
(62)
853
226
(126)
100
38,680
94
Annual Report 2023
Significant judgements and estimates
Impairment assessment of goodwill and domain names
A key judgement by management with regards to the (i) Lottery Retailing Cash Generating Unit (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.
Estimated useful life of customer contracts and relationships
Management estimates the useful life of intangible assets-customer contracts and relationships 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 any changes in customer contract terms and conditions,
customer net attrition, and changes in legal and economic conditions.
The amortisation period relating to customer contracts and relationships is ten 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
the period of control over the asset and legal or similar limits on the use of the asset.
95
Annual Report 2023
(a) Movements in carrying values
Consolidated Group
2022
Goodwill
Intellec-
Website
Customer
Software
Domain
$’000
tual
develop-
contracts
$’000
property
ment costs
and
$’000
$’000
relation-
names
$’000
Other
$’000
Total
$’000
Balance at the beginning
9,278
30
14,240
564
844
15
25,855
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
2023
-
4,785
-
-
-
(258)
13,805
Balance at the beginning
13,805
of the year
Additions
Additions through
acquisitions
Additions internally
developed
Disposal through sale of
entity
Amortisation charge
-
14,445
-
-
-
Effects of movements in
1,304
foreign exchange
Closing value at
30 June 2023
29,554
ships
$'000
884
-
7,892
-
-
-
806
-
-
-
-
-
-
-
5,706
(30)
(196)
(5,469)
(323)
-
11
(178)
(15)
9
-
-
-
-
-
-
88
-
-
(4)
1
9
13,571
5,706
(226)
(5,974)
(261)
14,281
8,464
1,177
853
100
38,680
14,281
8,464
1,177
853
100
38,680
-
-
-
16,043
6,558
-
-
-
-
931
-
-
(5,736)
(2,053)
-
41
(438)
19
-
-
-
-
-
-
-
34
-
-
-
31,453
6,558
-
(50)
(4)
(8,277)
1,360
15,103
22,495
1,689
853
80
69,774
-
-
-
-
-
-
-
-
-
-
-
(b) Impairment testing of Cash-Generating Units (CGU)
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 car rying
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.
96
Annual Report 2023
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 capitalis ed
only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for us e;
ability to use the intangible asset; how the intangible asset will generate probable future economic benefits; the availabili ty 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. This is included as part of the carrying amount of SaaS CGU.
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.
The Reseller Agreements with The Lottery Corporation Limited (TLC), which were extended for a further 10 years in August 2020
(Agreement) for $15,000,000 (2022: $15,000,000) has been represented as other non-current assets to conform with current year
disclosure. This is included as part of the carrying amount of the relevant CGU.
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. This is included as part of the carrying amount of the relevant CGU.
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.
Goodwill and Indefinite Life Intangibles allocated to CGUs
Lottery Retailing
SaaS
Gatherwell
Stride
StarVale
Total
Goodwill
2023
$’000
2022
$’000
2,831
2,831
Domain names
-
-
2023
$’000
-
853
2022
$’000
2023
$’000
2022
2023
2022
2023
2022
$’000
$’000
$’000
$’000
$’000
2023
$’000
2022
$’000
-
6,670
6,165
5,375
4,809
14,678
853
-
-
-
-
-
-
-
29,554
13,805
853
853
The CGUs include Lottery Retailing, Software-as-a-Service, Managed Services United Kingom Gatherwell, Managed Services United
Kingdom StarVale and Managed Services Canada.
Lottery Retailing
Goodwill has been allocated to the Lottery Retailing CGU which is an operating segment.
The value in use calculations performed for all cash generating units use cash flow projections based on actual operating results,
the Board approved budget for FY24, and forecasts drawn from FY25 to FY28 which are based on management’s estimates of
underlying economic conditions, past financial results, and other factors anticipated to impact the cash generating units’
97
Annual Report 2023
performance. The terminal value of all CGU’s has been forecasted using a nominal growth rate of 2% (2022: 3%) The growth rate
used in these projections does not exceed the historical growth rate of the relevant CGU.
Key assumptions used for value-in-use calculation of the CGU are as follows:
Discount rate
Terminal value growth rate
TLC reseller agreements continue beyond current agreement periods
2023
17.5%
2.0%
2022
15.75%
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 by approximately $243,845,000 (2022: $214,232,000).
Sensitivity analyses performed indicate a reasonably possible change in any of the key assumptions for the Lottery Retailing CGUs
would not result in impairment.
Should the TLC reseller agreements be cancelled or not be extended for further periods when they expire on 25 August 2030, an
impairment loss would be recognised up to the maximum carrying value of $13,802,000 (2022: $15,529,000).
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 relevant CGU.
Key assumptions used for value-in-use calculation of the CGU are as follows:
Discount rate
Terminal value growth rate
2023
17.5%
2%
2022
15.75%
3%
Software licence agreements continue beyond current agreement periods
Annual capital expenditure
$6,679,000
$5,654,000
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 by approximately $107,949,000 (2022: $138,545,000).
Sensitivity analyses performed indicate a reasonably possible change in any of the key assumptions for the Software -as-a-
Service CGUs would not result in impairment.
Should the customer contracts (which are included as part of the carrying amount) 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 $17,528,000 (2022:
$17,425,000).
Managed Services
The Managed Services is comprised of three CGUs – Managed Services UK (Gatherwell and StarVale) and Managed Services
Canada (Stride).
Managed Services United Kingdom Gatherwell
Goodwill has been allocated to the Managed Services United Kingdom Gatherwell 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 relevant CGU.
98
Annual Report 2023
Key assumptions used for value-in-use calculation of the CGU are as follows:
Discount rate
Terminal value growth rate
Lottery management agreements continue beyond current agreement periods
2023
17.9%
2%
2022
15.75%
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 by approximately $2,020,312 (2022: $4,995,000).
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
TTV Growth
Managed Services United Kingdom StarVale
Change required for carrying amount to
equal recoverable amount
2023
1.00ppt
-
(2.00%)
2022
2.25ppt
(16.9%)
NA
Goodwill has been allocated to the Managed Services United Kingdom StarVale 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 relevant CGU.
Key assumptions used for value-in-use calculation of the CGU are as follows:
Discount rate
Terminal value growth rate
Lottery management agreements continue beyond current agreement periods
2023
17.9%
2%
2022
NA
NA
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 value of the Starvale CGU remains in line with its carrying value as expected given the recent purchase
of this business in an arm’s length transaction. 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
TTV
Managed Services Canada
Change required for carrying amount to
equal recoverable amount
2023
1.00ppt
(1.00%)
2022
NA
NA
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 relevant CGU.
Key assumptions used for value-in-use calculation of the CGU are as follows:
2023
2022
99
Annual Report 2023
Discount rate
Terminal value growth rate
Lottery management agreements continue beyond current agreement periods
16.1%
2%
15.75%
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 by approximately $5,989,000 (2022: $8,091,000)
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
TTV
Budgeted cash flow growth rate
Change required for carrying amount to
equal recoverable amount
2023
3.00ppt
(3.00%)
-
2022
2.25ppt
NA
(11.6%)
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 fl ows
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.
Note 10: Right-of-use assets
Land and buildings - right-of-use
Less: Accumulated amortisation
Plant and equipment - right-of-use
Less: Accumulated amortisation
Consolidated Group
2023
$’000
7,430
(4,129)
3,301
60
(19)
40
3,342
2022
$’000
5,796
(2,932)
2,864
166
(166)
-
2,864
The Group leases land and buildings for its offices under agreements of between two to nine 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.
100
Annual Report 2023
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 11: Other non-current assets
The Lottery Corporation extension fee
Less: Accumulated amortisation
Consolidated Group
2023
$’000
15,000
(4,375)
10,625
2022
$’000
15,000
(2,875)
12,125
The Lottery Corporation extension fee
An extension fee was payable when the 10-year TLC Reseller Agreements were executed on 25 August 2020. The extension fee is
capitalised as the Reseller Agreements 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 Reseller Agreements of 10 years, and is also tested for impairment indicators.
There was a change In the presentation of The Lottery Corporation extension fee from operating asset under AASB 138 Intangible
assets to capital asset under AASB 15 Revenue from contracts with Customers.
Note 12: Trade and other payables
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
2023
$’000
30,122
2,483
2,181
11,712
1,782
18,158
11,964
30,122
2022
$’000
24,530
1,891
694
11,498
1,532
15,615
8,915
24,530
101
Annual Report 2023
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’ serv ices
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 liabi lity 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.
Note 13: Employee benefit obligations
CURRENT
Long service leave
NON-CURRENT
Long service leave
Consolidated
2023
$’000
1,078
575
1,653
2022
$’000
818
525
1,343
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 peri od. 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 f uture
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.
102
Annual Report 2023
Note 14: Lease liabilities
CURRENT
Lease Liabilities
NON-CURRENT
Lease Liabilities
Consolidated
2023
$’000
2022
$’000
1,355
1,022
2,491
3,846
2,181
3,203
Recognition and measurement
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the prese nt 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 t he
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 t o 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.
103
Annual Report 2023
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.
CAPITAL AND FINANCIAL RISK MANAGEMENT
Note 15: Capital risk management
Note 16: Dividends
Note 17: Equity and reserves
Note 18: Borrowings
Note 19: Financial risk management
103
103
104
105
106
107
Note 15: Capital risk management
Total borrowings1
Less: cash and cash equivalents – general account balances
Net debt
Total equity
Total capital
Gearing ratio
Note
18
6(a)
Consolidated
2023
$’000
-
2022
$’000
-
(41,226)
(60,015)
-
99,989
99,989
0%
-
92,983
92,983
0%
1Excludes bank guarantees and commercial credit cards
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 as total borrowings less cash and
cash equivalents (up to a minimum of zero). Total capital is net debt plus total equity. Aside from the on-market share buy-back
announced on 26 August 2022, there were no changes in the Group’s approach to capital management during the year. The
Group’s Dividend policy remains to pay out a range of 65% to 85% of statutory NPAT.
104
Annual Report 2023
Note 16: Dividends
(a) Ordinary shares
Final fully franked ordinary dividend of 20.5 (2022: 18.5) cents per share franked at the tax
rate of 30% (2022: 30%)
Consolidated
2023
$’000
12,930
2022
$’000
11,555
Interim fully franked ordinary dividend of 23.0 (2022: 22.0.0) cents per share franked at the
14,470
13,741
tax rate of 30% (2022: 30%)
Total dividends paid or provided for
Dividends paid in cash during the years ended 30 June 2023 and 30 June 2022 were as
follows:
Paid in cash
27,400
25,296
27,400
25,296
(b) Dividends not recognised at the end of the
reporting period
Since year end, the Directors have recommended the payment of a final 2023 fully franked
ordinary dividend of 20.0 (2022: 20.5) cents per share franked at the rate of 30% (2022: 30%).
The aggregate amount of the proposed dividend expected to be paid on 22 September 2023
(2022: 23 September 2022), but not recognised as a liability at year end, is:
(c) Franked dividends
The franked portions of dividends paid and recommended after 30 June 2023 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 2023.
Franking credits available for subsequent financial years based on a tax rate of 30% (2022:
30%)
Consolidated
2023
$’000
12,580
2022
$’000
12,804
Consolidated
2023
$’000
2022
$’000
16,942
16,890
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 $5,391,000
(2022: $5,487,000).
105
Annual Report 2023
Note 17: Equity and reserves
(a) Contributed equity
Issued shares
Ordinary shares – fully paid
Movements in ordinary share capital
Details
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
Balance 1 July 2022
21 July 2022 – Exercise of options
1 July 2022 – 31 December 2022 – Share buyback
1 January 2023 – 30 June 2023 – Share buyback
30 June 2023-Share issue
Balance 30 June 2023
Consolidated
Consolidated
2023
Shares
62,898,394
2023
$’000
79,807
2022
Shares
62,775,211
2022
$’000
81,390
Consolidated
Shares
62,448,757
9,529
300,000
16,925
62,775,211
62,775,211
300,000
154,618
54,651
32,452
62,898,394
$’000
80,177
163
1,050
-
81,390
81,390
1,050
1,917
718
-
79,807
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. On various dates during the period, the share buyback was completed on-market.
(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) Equity rights
Details of the employee Equity Rights 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 the Remuneration Report and 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.
(d) Reserves
Nature and purpose of reserves
106
Annual Report 2023
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.
Foreign currency translation reserve
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.
Note 18: Borrowings
(a) Facilities with Banks
Credit facility
Bank guarantees
Commercial credit cards
Bank loan
Facilities utilised
Bank guarantees
Commercial credit cards
Bank loan
Amount available
Note
29
Consolidated
2023
$’000
3,250
300
47,000
50,550
(3,093)
(76)
-
47,381
2022
$’000
3,250
300
50,000
53,550
(3,100)
(112)
-
50,338
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 2023 (2022: 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.
(c) Defaults and breaches
There have been no defaults or breaches during the financial year ended 30 June 2023.
107
Annual Report 2023
Note 19: Financial risk management
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.
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 e xchange
risk relates largely to Great British Pound (GBP), Canadian Dollar (CAD) and Fiji Dollar (FJD).
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
%
1.04
Consolidated
2023
$’000
53,190
Rate 1
%
0.45
2022
$’000
68,930
108
Annual Report 2023
Risk management
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 (2022: 57 days). Term deposits currently in place cover
approximately 15% (2022: 11%) of the total cash and cash equivalent balances.
Sensitivity on market risks
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 2023:
200 bps movement in interest rates
200 bps increase in interest rates
200 bps decrease in interest rates
(b) Credit Risk
Consolidated
Effect on profit
(before tax)
2023
1,064
(1,064)
2022
1,379
(1,379)
Effect on equity
(before tax)
2023
2022
1,064
(1,064)
1,379
(1,379)
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 th e
statement of financial position and notes to the financial statements. Assets are pledged as security as detailed in Note 18(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 2023 and 30 June 2022
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.
30 June 2023
$’000s
Expected credit loss rate
Gross carrying amount $
Lifetime expected credit
loss $
Current
1-30 days
31-60 days
61-90 days
> 90 days
Total
Trade receivables days past due
0.0%
2,897
-
0.0%
1,335
-
0.0%
224
-
0.0%
126
-
0.0%
264
-
0.0%
4,846
-
109
Annual Report 2023
Current
1-30 days
31-60 days
61-90 days
> 90 days
Trade receivables days past due
0.0%
260
-
0.0%
664
-
0.0%
133
-
0.0%
127
-
0.0%
147
-
Total
0.0%
1,331
-
30 June 2022
$’000s
Expected credit loss rate
Gross carrying amount $
Lifetime expected credit
loss $
(c) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulties in meeting the obligations associated with its financia l 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:
2023
Less than 1
Between
Between
Over 5 years
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Other Assets
Financial liabilities
Trade and other
payables
Lease liabilities1
Contingent
consideration
year
$’000
53,190
8,046
8,411
69,647
30,122
1,487
8,391
40,000
1 and 2 years
3 and 5 years
$’000
$’000
$’000
-
-
-
-
-
1,437
-
1,437
-
-
-
-
-
749
-
749
-
-
-
-
-
566
-
566
1Weighted average interest rate 3.5%
2022
Less than 1
Between
Between
Over 5 years
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Other Asset
Financial liabilities
Trade and other
payables
Lease liabilities1
Contingent
consideration
1Weighted average interest rate 3.5%
year
$’000
68,930
6,065
-
74,995
24,530
1,118
1,820
27,468
1 and 2 years
3 and 5 years
$’000
$’000
$’000
-
-
-
-
-
1,157
1,638
2,795
-
-
-
-
-
1,102
-
1,102
-
-
-
-
-
-
-
-
Total
$’000
53,190
8,046
8,411
69,647
30,122
4,239
8,391
42,752
Total
$’000
68,930
6,065
-
74,995
24,530
3,377
3,458
31,365
110
Annual Report 2023
(d) Fair value hierarchy
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 – 2023
Assets
Liabilities
Contingent
consideration
Total liabilities
Consolidated – 2022
Assets
Liabilities
Contingent
consideration
Total liabilities
Level 1
$’000
-
-
-
Level 1
$’000
-
-
-
Level 2
$’000
-
-
-
Level 2
$’000
-
-
-
Level 3
$’000
-
8,391
8,391
Level 3
$’000
-
3,458
3,458
Total
$’000
-
8,391
8,391
Total
$’000
-
3,458
3,458
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 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
Contingent consideration
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 20)
Balance at 30 June 2022
$’000
1,807
(1,782)
(8)
3,441
3,458
Total
$’000
1,807
(1,782)
(8)
3,441
3,458
111
Annual Report 2023
Consolidated
Contingent consideration
Balance at 1 July 2022
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 20)
Balance at 30 June 2023
$’000
3,458
(2,792)
677
7,048
8,391
Total
$’000
3,458
(1,782)
(333)
7,048
8,391
Significant judgements and estimates
A key judgement by management is a 91% probability of the first and only tranche of contingent consideration being paid for
StarVale following the 30 June 2023 financial year end.
The level 3 assets and liabilities unobservable inputs and sensitivity are as follows:
Description
Unobservable Inputs
Sensitivity
Starvale Contingent
Probability rate
91%
5ppt change would change the fair value by
consideration
$422,000
112
Annual Report 2023
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 20: Business combination
Note 21: Controlled subsidiaries
Note 22: Parent disclosures
112
112
115
116
Note 20: Business combination
On 1 June 2022, the Group acquired 100% of the issued share capital and voting rights of 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.
No material adjustments have been made to the acquired amounts reported in the 31 December 2022 financial statements. Details
of the business combination are as follows:
Stride 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
ROU asset
Software
Customer contracts and relationships
Trade and other payables
Lease liability
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
20 (b)
20 (a)
Note
20 (d)
Note
Note
20 (a)
$000s
8,452
3,441
543
12,436
$000s
1,040
782
187
88
1,421
806
7,892
(1,135)
(1,594)
(2,348)
7,139
5,297
12,436
$000s
8,995
(1,040)
7,955
$000s
665
113
Annual Report 2023
On 1 November 2022, the Group acquired 100% of the issued share capital and voting rights of StarVale, a leading UK ELM and digital
payments company providing a full range of weekly lottery, raffle and prize draw services. The primary objective of the acquisition
is to help build scale in the region.
All acquired amounts were recorded on a provisional basis as at 30 June 2023. Details of the business combination are as follows:
StarVale 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
Software
Customer contracts and relationships
Trade and other payables
Deferred tax liability
Net assets
Goodwill on consolidation
StarVale acquisition at fair value
Cash consideration paid
Cash acquired on acquisition
Cash outflow
Acquisition costs charged to expenses
Note
20 (b)
20 (a)
Note
20 (d)
Note
Note
20 (a)
$000s
32,610
7,048
559
40,217
$000s
12,569
2,313
4
877
15,125
(1,468)
(3,041)
26,379
13,838
40,217
$000s
40,217
(12,569)
27,648
$000s
844
Significant judgements and estimates
A key judgement by management is a 91% probability of the contingent consideration being paid following the 30 June 2023
financial year end.
(a) Consideration transferred
Acquisition-related costs of $844,000 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
FY2023.
The actual net working capital and cash was in excess of the target working capital and cash resulting in a settlement adjustment
$559,000 being paid to the vendor of StarVale.
(b) Contingent consideration
The contingent consideration arrangement requires the Group to pay up to an additional undiscounted amount of GBP4,500,000
(~$7,940,000) in cash to the StarVale vendors if certain Profit targets are met, to be paid in a single instalment following the 30 June
2023 financial year end.
The fair value of the contingent consideration arrangement of $8,411,000 was estimated by calculating the face value of the
estimated earnout payable based on the assumed probability-adjusted profit in StarVale of GBP2,390,000 (~$4,467,000) for the 12-
month period to 30 June 2023.
The probability-adjusted profit in StarVale is recalculated at each reporting date with any gains/losses on the fair value of the
contingent consideration recognised in profit or loss.
114
Annual Report 2023
At 30 June 2023, 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
8,391
-
8,391
Developed software and customer contracts and relationships have been identified as separately identifiable assets. These ass ets
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 and StarVale’s position, competitive advantage and growth
prospects in the charities’ lottery market. No amount of goodwill is expected to be deductible for tax purposes.
(e) Revenue and profit contribution
StarVale contributed TTV of $83,187,000, revenue of $6,917,000 and net profit of $2,765,000 to the Group from the date of acquisition
to 30 June 2023. If the acquisition had occurred on 1 July 2022, the contribution to the Group's pro-forma TTV, revenue and net profit
after tax for the financial year ended 30 June 2023 would have been ~$128,776,000, $11,491,000 and $4,277,000 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.
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 informati on
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.
115
Annual Report 2023
Note 21: Controlled subsidiaries
The Group’s subsidiaries that were controlled during the year and prior years are set out below:
County of Incorporation
Percentage Ownership
2023
%
2022
%
Direct subsidiaries of the ultimate
parent entity Jumbo Interactive
Limited:
Benon Technologies Pty Ltd
TMS Global Services Pty Ltd
Intellitron Pty Ltd1
Jumbo Lotteries Pty Ltd
Jumbo Interactive Asia Pty Ltd
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) Pte Limited
TMS (Fiji) On-Line Pte Limited
TMS Global Services (PNG) Limited
Cook Islands Tattslotto Pty Ltd2
Jumbo Lotteries North America,
Inc.
Subsidiaries of Jumbo Interactive
UK Limited
Starvale Technical Systems Ltd5
Starvale Management &
Technologies Ltd5
DDPay Ltd5
Australia
Australia
Australia
Australia
Australia
Mexico
United Kingdom
United Kingdom
Canada
Australia
Australia
Fiji
Fiji
Papua New Guinea
Cook Islands
United States of America
United Kingdom
United Kingdom
United Kingdom
1 Sold on 30 June 2022
2 De-registered 31 March 2022
3 Registered 11 January 2022
5 Acquired 1 November 2022
4Acquired 1 June 2022
Principles of consolidation
100
100
-
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
-
100
-
-
-
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 a re
deconsolidated from the date on which control ceases.
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.
116
Annual Report 2023
Changes in ownership interests
When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasu red 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, is 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, on ly a
proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss, where
appropriate.
Note 22: 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
(b) Guarantees
2023
$’000
4,201
56,205
60,406
4,472
45
4,517
55,889
79,806
(26,037)
(2,242)
6,662
(2,302)
55,887
18,951
18,951
2022
$’000
11,533
57,382
68,915
2,409
1,684
4,093
64,822
81,390
(26,037)
6,205
5,566
(2,302)
64,822
31,094
31,094
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 18: 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 TLC Reseller Agreements, between its subsidiary and the favouree.
(c) Contractual commitments
There were no contractual commitments for the acquisition of property, plant and equipment entered into by the parent entity at
30 June 2023 (2022: $Nil).
117
Annual Report 2023
(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.
118
Annual Report 2023
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 23: Investments accounted for using the Equity Method
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
118
118
119
120
120
123
124
Note 23: Investments accounted for using the
Equity Method
Interest in Associate – Lotto
Place of business /
Points Plus Inc., USA
Country of Incorporation
Unlisted shares
Lotto Points Plus Inc
New York, USA
Net investment in associate company
2023
%
30.9
2022
%
30.9
2023
$’000
-
-
2022
$’000
-
-
Lotto Points Plus Inc is an investment company, with its only investment being a 16.9% (2022: 16.9%) shareholding (non-voting) in
Lottery Rewards Inc., USA which was dissolved on 30 November 2020.
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 accoun ting.
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 associ ates
and the parent are identical and both use consistent accounting policies.
119
Annual Report 2023
Note 24: Related party transactions
Parent entity
Jumbo Interactive Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 21: Controlled subsidiaries.
Key management personnel
Disclosures relating to Executive KMP 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.
– salary and superannuation
Receivables from related parties
Consolidated
2023
$
2022
$
11,647
12,706
Consolidated
2023
$
2022
$
92,954
86,900
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
2023
$
1,165
2022
$
1,165
120
Annual Report 2023
Note 25: Key Management Personnel
compensation
Short term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
Consolidated
2023
$
2,100,991
141,570
23,348
-
1,048,186
3,314,095
2022
$
3,208,792
161,164
26,792
-
1,274,971
4,671,719
Further information regarding the identity of Executive KMP 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
Rights issued under employee incentives schemes
Employee option plan
Consolidated
2023
$
1,136,186
1,136,186
2022
$
1,338,730
1,338,730
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 2023 financial year.
Third parties
There were no options granted during the 2023 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 2023 were as follows:
121
Annual Report 2023
Grant date
Share price at
Exercise price
KMP STI rights
30 June 2022
10 November
2022
grant date
$13.910
$nil
Expected
volatility
42.811%
Expected
Risk free rate
dividend yield
2.74%
3.16%
The fair value of LTI rights at grant date was determined by an independent valuer using the Black-Scholes and the Monte Carlo
Simulation option pricing models 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 2023 were as follows:
Grant date
Share price at
Exercise price
KMP LTI rights
1 July 2022-TSR1,3
KMP LTI rights
1 July 2022-EPS2,4
10 November
2022
grant date
$13.910
10 November
$13.910
2022
$nil
$nil
Expected
volatility
42.811%
42.811%
Expected
Risk free rate
dividend yield
2.74%
2.74%
3.25%
3.25%
1 LTI rights are granted for no consideration, have a three-year term, and are exercisable when the vesting terms and conditions have been met.
2 LTI rights are granted for no consideration, have a term until 4 November 2023, and are exercisable when the vesting terms and conditions have
been met.
3 Monte Carlo Simulation pricing model.
4 Black-Scholes pricing model.
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.
Details of options and rights outstanding during the financial year are as follows:
2023
Grant date
Exercise
Expiry date
Balance
Granted
Lapsed/
Exercised
Expired
Balance
Vested and
Price
at
during
Forfeited
during the
during
at end of
exercisable
beginning
the year
during the
year
the year
year
at end of
year
-
-
-
-
$3.50
$3.50
of year
year
KMP and staff options
26 Oct 2017
$3.50
15 Nov
300,000
Total
Weighted average
exercise price
KMP and staff rights
1 July 20191
29 October 20202
17 December 2020
15 February 2021
28 October 20213
28 April 2022
28 April 2022
28 April 2022
10 November 2022
10 November 20224
2022
300,000
$3.50
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
1 Jul 2023
1 Jul 2024
4 Nov 2023
4 Nov 2023
1 Jul 2025
1 Jul 2023
1 Jul 2024
1 Jul 2025
30 June
2023
28 August
2027
46,716
92,965
40,984
15,983
64,403
2,732
2,732
2,732
-
-
-
-
-
-
-
-
-
-
-
-
-
32,452
-
(300,000)
-
-
(300,000)
$3.50
(46,716)
-
-
(1,393)
(6,831)
-
-
-
-
-
-
-
-
-
(2,732)
-
-
(32,452)
112,338
(4,761)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
92,965
40,984
14,590
57,572`
-
2,732
2,732
-
107,577
Total
569,247
144,790
(59,701)
(335,184)
-
319,152
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 2021 AGM
4 Relating to the service period 1 July 2022 to 30 June 2023 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.
122
Annual Report 2023
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.
The 30 June 2023 STI rights FY23 are granted for no consideration, have a one-year term, and are exercisable after a further one-
year lock-up period.
The 10 November 2022 LTI rights FY2023 are granted for no consideration, have a three-year term, and are exercisable when the
vesting conditions are met. Please see Further Details on Key Components on page 61 for more information.
2022
Grant date
Exercise
Expiry date
Balance
Granted
Lapsed/
Exercised
Expired
Balance
Vested and
Price
at
during
Forfeited
during the
during
at end of
exercisable
beginning
of year
the
year
during the
year
the year
year
at end of
year
year
KMP and staff options
26 Oct 2017
$3.50
15 Nov
600,000
2022
600,000
$3.50
-
(300,000)
-
300,000
300,000
(300,000)
- 300,000
300,000
$3.50
-
$3.50
$3.50
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,393)
-
-
-
-
-
-
(23,241)
-
-
-
(16,925)
-
-
-
-
46,716
23,241
92,965
40,984
17,376
16,925
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
1 Jul 2023
30 Jun
2021
1 Jul 2024
4 Nov
2023
4 Nov
2023
30 Jun
2022
1 Jul 2025
1 Jul 2023
1 Jul 2024
1 Jul 2025
-
-
-
-
64,403
2,732
2,732
2,732
Total
Weighted average
exercise price
KMP and staff rights
1 July 20191
30 June 20201
29 October 20202
17 December 2020
15 February 2021
30 June 20212
28 October 20213
28 April 2022
28 April 2022
28 April 2022
Total
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
238,207
72,599
(1,393)
(40,166)
-
-
-
-
-
-
-
-
-
-
-
46,716
-
92,965
40,984
15,983
-
64,403
2,732
2,732
2,732
269,247
-
-
-
-
-
-
-
-
-
-
-
123
Annual Report 2023
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 us ing
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.
Note 27: Remuneration of auditor
On 10 November 2022, EY (previously Ernst & Young) were appointed auditor of the Company following shareholder approval at the
Annual General Meeting. The appointment of EY was made following a competitive tender process. BDO had been the Company’s
auditor for over 10 years prior.
During the year the following fees were paid or payable for services provided by the auditor of the parent entity and its related
practices:
Fees to Ernst & Young Australia
Audit services
Amounts paid/payable to EY for audit or review of the financial statements for the
entity or any entity in the Group
Fees to overseas member firms of Ernst & Young
Amounts paid/payable to EY for audit of the financial statements for the entity or any
entity in the Group
Fees to BDO (Australia)
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
Network firms of BDO Audit ty 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
Consolidated
2023
$
2022
$
285,000
285,000
160,000
445,000
-
-
-
-
-
-
-
-
-
-
-
144,108
151,048
295,156
48,100
23,300
15,580
86,980
124
Annual Report 2023
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
Other accounting advice
Consolidated
2023
$
2022
$
-
-
-
-
-
11,327
6,500
-
17,827
399,963
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 re levant
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 2023 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 2023. 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.
(b) Foreign currency transactions
(i) Functional and presentation currency
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.
125
Annual Report 2023
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 exp ired
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 valu e 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 23 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 princip al
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 Notes 6 and 7 for further details.
(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 12 for further details.
126
Annual Report 2023
(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.
127
Annual Report 2023
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: Events after the reporting date
127
127
127
Note 29: Contingencies
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
2023
$’000
3,093
2022
$’000
3,100
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: Events after the reporting date
Apart from the final dividend, 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 2023.
128
Annual Report 2023
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 2023 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 52 to 71 of the Directors’ report (as part of the audited Remuneration Report),
for the year ended 30 June 2023, 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, 25 August 2023
Mike Veverka
Chief Executive Officer and Executive Director
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Independent auditor’s report to the members of Jumbo Interactive Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Jumbo Interactive Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30
June 2023, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, notes to the financial statements, including a summary of significant accounting policies,
and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as 30 June 2023
and of its consolidated financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
129
Impairment Assessment of Goodwill and Non-current Assets
Why significant
How our audit addressed the key audit matter
As at 30 June 2023 Goodwill totals
$29,554,000. Note 9 discloses goodwill and
other intangible assets allocated to each of
the Group’s cash generating units (CGUs), the
method applied in testing impairment, and the
key assumptions used.
The annual impairment assessment of
intangible assets performed by the Group is a
key audit matter due to the value of the
intangible assets relative to the total assets,
and the degree of estimation and judgement
involved in the assessment including: terminal
growth rate and discount rate, specifically
concerning future discounted cash flows.
Our audit considered the relevant requirements of
the Australian Accounting Standard AASB 136
Impairment of Assets.
Our audit procedures included:
► Assessing the Group’s definition and
identification of CGUs for consistency with
relevant Australian Accounting Standards, and
assessing any changes in CGUs including for
acquisitions in the period. We also assessed
any impairment for each of the Group’s
individually significant CGUs.
► Evaluating the Group’s indicators of
impairment, including the Group’s market
capitalisation compared to its net assets.
► Assessing the reasonability of the Group’s
cashflow forecast models used to estimate the
recoverable amount by:
► Assessing the mathematical accuracy and
historical forecasting accuracy of the
cash flow model.
► Agreeing the cash flows to board
approved forecasts.
► Assessing the application of key
assumptions used in the cashflow models.
► Performing sensitivities of the
impairment model to assess the
reasonably possible change in key
assumptions relating to the cash flow
forecasts, terminal growth rate or
discount rate applied.
►
Involving our valuation specialists to evaluate
the reasonability of the discount rate and
terminal growth rate assumptions used by the
Group.
► Assessed the adequacy of the disclosures in
Note 9 to the financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
130
Revenue Recognition
Why significant
How our audit addressed the key audit matter
As at 30 June 2023 the Group recognised
$118,712,000 of revenue. Lottery
Retailing revenue is significant and includes
agent commission received from The
Lottery Corporation and administration fees
received from the customers at the time an
entry is purchased by the customer as
disclosed in
Note 2.
Significant audit effort is required in the
assessment and measurement of Revenue
recognition and is considered a key audit
matter.
Our audit considered the relevant requirements of
the Australian Accounting Standard AASB 15
Revenue from Contracts with Customers. Our audit
procedures included:
► Obtaining an understanding of the services
rendered by the business segment of the Group
and the related revenue recognition policy for
the services rendered by the Group.
► Assessing revenue recognition processes and
practices including the evaluation of key
internal controls over revenue recognition and
principal versus agent consideration.
► On a sample basis we assessed the
completeness, accuracy and timing of revenue
recognition on a net basis. In addition we tested
the timeliness of revenue recognition by
agreeing individual sales transactions to
customer ticket purchase, obtaining evidence of
payments from customers and the associated
cost of sales related to the transaction.
► Assessing the customer liability account at year
end to confirm revenue was recorded in the
appropriate period for tickets purchased.
► Assessing the validity of the manual revenue
journals by testing to supporting
documentation.
► Assessed the adequacy of the disclosures in
Note 2 to the financial report.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2023 annual report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
131
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
132
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 52 to 70 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of Jumbo Interactive Limited for the year ended 30 June
2023, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Susie Kuo
Partner
Brisbane
25 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
133
134
Annual Report 2023
SHAREHOLDER INFORMATION
The Company has 62,898,394 ordinary shares on issue, each fully paid. There are 10,387 holders of these ordinary shares as at 31
July 2023. Shares are quoted on the Australian Securities Exchange under the code JIN and on the German Stock Exchange.
In addition, there are 319,152 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
31 July 2023
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000 – and over
Rounding
Total
Holders Units
% of issued capital
Total
7,517
2,331
301
209
29
2,475,545
5,400,640
2,234,307
4,914,098
47,873,804
10,387
62,898,394
3.94
8.59
3.55
7.81
76.11
0
100.00
Units
3,359
(b) Unmarketable parcels
Minimum $500.00 parcel at $15.36
per unit
Minimum parcel size
33
Holders
288
The number of shareholders holding less than the marketable parcel of shares is 311 (shares 4,118)
(c) Substantial holders of 5% or more fully paid ordinary
shares as at 31 July 2023
Name
Vesteon Pty Ltd and associates
Selector Funds Management Ltd
Notice date
4 April 2022
22 September 2020
Ordinary Shares
Percentage Held
8,849,582
3,298,130
14.10%
5.24%
(d) Voting rights
The voting rights attached to each class of equity security are as follows:
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.
135
Annual Report 2023
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 31 July 2023
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
Name
1. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2. CITICORP NOMINEES PTY LIMITED
3. VESTEON PTY LTD
4.
5. NATIONAL NOMINEES LIMITED
6. BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
7. BNP PARIBAS NOMS PTY LTD
8. MR BARNABY COLMAN CADDICK
9. BNP PARIBAS NOMINEES PTY LTD
10. MR MIKE VEVERKA
11. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
12. BNP PARIBAS NOMINEES PTY LTD
13. BERGADE INVESTMENTS PTY LTD
14. SEYMOUR GROUP PTY LTD
15. MASFEN SECURITIES LIMITED
16. BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
17. BNP PARIBAS NOMS PTY LTD
18. MR JOHN ROSAIA
19. NETWEALTH INVESTMENTS LIMITED
20. BNP PARIBAS NOMS (NZ) LTD
Total Top 20 shareholders of ordinary fully paid shares
Total remaining holders balance
Units
11,158,182
8,426,258
8,116,307
7,293,278
2,838,040
1,647,020
1,645,850
1,125,000
924,346
666,791
500,244
377,922
307,599
260,000
245,000
232,601
226,672
214,438
202,832
198,672
46,607,052
16,291,342
% of Units
17.74
13.40
12.90
11.60
4.51
2.62
2.62
1.79
1.47
1.06
0.80
0.60
0.49
0.41
0.39
0.37
0.36
0.34
0.32
0.32
74.10
25.90
(f) Unquoted securities as at 31 July 2023
Rights over Unissued Shares. A total of 319,152 rights are on issue to employees for services rendered.
Exercise Price
$nil
$nil
$nil
$nil
$nil
$nil
$nil
Expiry date
1 July 2024
4 November 2023
4 November 2023
1 July 2025
1 July 2024
1 July 2025
28 August 2027
Number on issue
Number of holders
92,965
40,984
14,590
57,572
2,732
2,732
107,577
4
3
11
5
2
2
16
(g) On-market buy-back
The Group announced an on-market share buy-back of up to $25 million on 26 August 2022 and commenced buying back shares
in September 2022. As at 31 July 2023, 209,269 shares (0.33% of issued capital) had been purchased, representing $2.6 million at an
average buy-back price of $12.58. The Board has agreed to continue the on-market share buy-back program and will maintain a
disciplined approach to execution. The timing and number of shares to be purchased remains dependent 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.
136
Annual Report 2023
(h) Restricted securities
There are no restricted securities or securities subject to voluntary escrow (outside of an employee incentive scheme) that are
on issue.
137
Annual Report 2023
COMPANY INFORMATION
Jumbo Interactive Limited
ABN 66 009 189 128
www.jumbointeractive.com
Directors
Susan M Forrester AM (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
Ernst & Young
Level 51, 111 Eagle 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