Half Year Report - December 2003

Feb 24, 2004

JUMBO CORPORATION LIMITED

AND ITS CONTROLLED ENTITIES ABN 66 009 189 128

HALF YEAR REPORT

For the 6 months ending 31 December 2003 Given in accordance with ASX Listing Rule 4.2A  

ASX AND PRESS RELEASE
Tuesday 24 February 2004
  Half Year Results to Dec 2003 – Record Profit   Jumbo Corporation Ltd today announced a record profit resulting from continuing strong growth in the core e- commerce business. The company has now achieved 3 consecutive half year periods of increasing profits and 8 consecutive half year periods of increasing revenues since becoming a public company in 1999. The highlights of the results are as follows.  
Financial Performance:
Half Year Period: December 2003 December 2002 Growth
Revenue $3,298,000 $1,384,000

138%

EBITDA $149,891 $37,623

298%

PROFIT $115,408 $24,258

376%

  Financial Position:
  December 2003 December 2002 Growth
Cash at Bank $1,415,000 $1,031,000

37%

Net Assets $1,309,000 $50,000 2,518%
Net Tangible Assets $994,000 $38,000 2,515%
Quick Ratio

1.82

0.98

86%

  The  record  result  is  driven  by  the  strong  growth  in  the  global  e-commerce  industry  coupled  with  recent enhancements  to  the  Jumbo  e-commerce  software  (www.jumbostore.com).  The  software  enables  Jumbo  to operate with high levels of software automation keeping costs low and the company competitive in the rapidly growing online marketplace.
  “The increasing profit demonstrates that the company has passed the critical break-even point where operating costs are covered and additional revenues end up on the bottom line”, said Mr Mike Veverka, CEO of Jumbo Corporation. “Our focus is on new and innovative marketing techniques that will help drive up revenues and deliver corresponding increases in profit.”  
Financial Position
The company has progressed into a more stable position with Net Assets in excess of $1.3 million and Net Tangible Assets of $994,000. The company has little long term debt and a quick ratio of 1.82 (Current Assets minus Inventories over Current Liabilities).   The improved financial position and overall stability has enabled the company to seek expansion opportunities such as the recent strategic investment in Global Approach Limited (ASX:GLO). This investment is valued at over 1.38 million (based on yesterdays GLO share price of 13.5c) and compares to a cost of $690,494 currently recorded in the balance sheet at December 2003.  
Projects Update
A new software package is in development that will allow customers to participate in email marketing programs that fully comply with the current anti-spam legislation in Australia. In April 2004, the “Spam Act of 2003” will come into force requiring all Australian companies to comply when conducting customer marketing via email. The new software package is due for release before April 2004 and will provide all the required tools including double opt- in, opt-out, customer database management, increased security and authentication safeguards.   The companies’ computer hardware retailing operation has been sold for $24,000 to allow for greater focus on the profitable core retailing business and the strategic investment in Global Approach Limited. This activity accounted for only  1.4% of total online sales and operated through 2  websites at www.dealerdan.com.au and www.bozzo.com.au. “The online computer hardware business required a large amount of effort with little reward because of the thin margins and limitations to domestic customers”, said Mr Mike Veverka.

 

Company Focus
The main focus for JUM is the sale of “Internet friendly” goods online to International markets such as the US and Europe where a competitive advantage exists. These include products such as computer software, lottery tickets and luxury items that have minimal shipping costs. The company locates reliable suppliers and negotiates competitive prices for shipment direct to the customer eliminating the need  to  hold  stock.  The  Jumbostore software is used to effectively market to customers and to control all aspects of the sale including secure order- taking, delivery tracking and customer support.   In addition to the online sale of goods and services, directors expect an increase in sales of e-commerce software tools and services to other companies looking to outsource their online retailing functions. “There is a definite growth trend in the e-commerce budget of many companies as the industry begins to enter maturity“, said Mr Veverka. “Companies that have avoided e-commerce in the past few years are now coming back  to  take advantage of the web”.  
Company History
In 1995, Benon Technologies Pty Ltd pioneered the HTML-based e-commerce technique for building secure web stores. This technique greatly reduced the cost and complexity of building secure web stores while also lifting the standard of security by ensuring no stores could be built without adequate security in place. This technology was marketed as the “Jumbostore” from the web site www.jumbostore.com and the accompanying web site www.jumbomall.com was later added.   In 1999, the company went public through an 80% purchase of Benon Technologies Pty Ltd and Jumbo Corporation Limited was formed. The company weathered the storm of the dot-com bubble and the following bust to emerge in 2003 with its maiden profit. In 2003 the remaining 20% was purchased  following  4  years  of consistent growth.  
Global Approach Limited
In January 2004, JUM competed its acquisition of a substantial shareholding in Global Approach Limited (ASX:GLO). The company is the holder of an online casino license and operates an online casino at www.musichallcasino.com. Since the opening of the online casino in April 2003, over 50,000 registered players from 115 countries have placed over AUD$43 million in bets. The majority of these customers come from the

 

USA, UK and other European countries. The Asian market is a rapidly expanding sector of the online gaming and entertainment market. The casino does not take bets from Australians due to Australian Online Gaming laws. JUM currently holds 19.9% of the fully paid ordinary shares plus 4.5 million tradeable options (ASX:GLOO) and 4.93 million 10c options. Various marketing and technological synergies exist between the online retailing operations of JUM and the online gaming and entertainment operations of GLO.   The following table indicates the value of JUM's investment at various GLO share price levels.
GLO Share price Value of JUM’s investment Increase in value of JUM’s investment

$0.12

$1,173,758 $468,700

$0.14

$1,443,334 $738,276

$0.16

$1,712,911 $1,007,852

$0.20

$2,252,063 $1,547,005
  For further enquiries, please contact: Mike Veverka, CEO Ph:   (07) 3831 3705              Fx:   (07) 3831 9720 Email: mike@jumbocorporation.com Web: www.jumbocorporation.com

Media Assets

 24022004.pdf