December 2002 Half Year Results - Profitability Reached

Mar 14, 2003

ASX Release – 14 March 2003

Jumbo Corporation Ltd today announced that profitability has been reached in the 6 months ending December 2002. This was primarily a result of a 123% increase in revenue coupled with an 18% decrease in net operating costs.

The following table demonstrates the trend.  
6 month period to:Revenue Dec 2000$246,000 Dec 2001$621,000 Dec 2002$1,384,000
Cost of Sales 1 $11,000 $221,000 $807,000
Net Operating Costs 2 $674,000 $667,000 $547,000
Total Profit (Loss) ($439,000) ($267,000) $30,000
Consolidated Profit (Loss) 3 ($378,000) ($223,000) $24,000
  “Our goal of reaching profitability has been achieved”, said Mr Mike Veverka, CEO of Jumbo Corp. “The Company has succeeded in using its ecommerce technology to double revenues while keeping net operating costs under control.”   Expenses in earlier years were a result of development of the Jumbo proprietary technology which improves online security and handles customer demands. This encourages new customers to buy online and old customers to make repeat purchases. The company uses this to promote a variety of products primarily to the US consumer market.   “Looking ahead, our goal is to continue using our systems to drive our revenues higher and keep our costs under control with the aim of increasing our profitability”, said Mr Veverka. “The large US consumer market provides us with a good opportunity to continue our growth.”   Forrester Research estimated that online sales grew 52% to US$78 billion over the full 2002 year (2002 US Ecommerce: The Year in Review. January 28, 2003). This was fuelled by a growth in new product categories, an improvement in digital marketing techniques and web analytics. The report stated that more than 50% of online retailers reached profitability in 2001, with more expected to cross the threshold in 2002. With fears of dot-com instability behind them, retailers seized the chance to optimize sales.

  Scalability of the Jumbo business model   A high level of scalability and automation is a key principle in the Jumbo business model. The Jumbo technology is used to manage increasing levels of online sales 24 hours a day with minimal manual intervention. Over the last 3 years, revenue has increased from $246,000 to $1.38 million per half year while net operating costs have dropped from $674,000 to $547,000 per year.   For further enquiries, please contact: Mike Veverka, CEO Ph:   (07) 3831 3705 Fx:   (07) 3831 9720 Email: Web:       Definitions of terms used are as follows: 1. Cost of Sales; include costs that are proportional to sales levels and include cost of  goods sold and payment processing fees. 2. Net Operating Costs; include costs associated with operating the business and the ecommerce systems, such as staff, rent and computer expenses. 3. Consolidated Profit (Loss); Profit or loss attributable to members after minority interests    

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