Profit Guidance - 8 June 2007

Jun 8, 2007

ASX RELEASE – Friday 8 June 2007

Jumbo Corporation Limited today announced the following profit guidance for the full year ending June 2007. This forecast is based on unaudited management accounts and is subject to review and adjustment for abnormal items.

    FY 2006   FY 2007 Guidance  

+ / -

  Revenue   $16.6 million   $17.6 to $18.6 million   $1,000,000 to $2,000,000 up
  Gross Profit   $4,643,137   $4.8 to $5.1 million   $160,000 to $460,000 up
  EBITDA   $869,970   $500,000 to $700,000   $170,000 to $370,000 down
  Net Profit   $786,973   $200,000 to $400,000   $387,000 to $587,000 down

  The key observations are as follows:

  • Revenue and Gross Profit have grown primarily due to the growth in
  • Gross Profit Margin has been steady at around 27%.
  • Earnings from operating activities have declined between $170,000 and $370,000 due to investment in Lottery infrastructure and carrying out business improvements.
  • Net profit affected by an increases in Depreciation and Amortisation.

  “After 4 years of increasing profits, it was necessary to spend money on lottery infrastructure and key business improvements to build a solid platform for future growth” commented Mr Mike Veverka, CEO of Jumbo Corporation Limited.   Lottery Infrastructure and Business Improvements Throughout the year, improvements were made to both Internet ( and non-Internet (Pacific Island Network) sales channels to build a platform for future growth. These improvements were required to upgrade existing systems to a standard capable of sustaining higher sales levels in the future. The main improvements are as follows.   Internet Sales Improvements –

  • Development of the new web site including back-end systems.
  • Development of the affiliate network and other online marketing activities.

  Non-Internet Improvements – Pacific Island Lottery Network

  • Appointment of a Lottery operations manager to grow the network.
  • Improvements to lottery terminals and communications equipment.

  New Projects

  • Investment in new online projects due for release in July 2007.

  Depreciation and Amortisation Depreciation and Amortisation is expected to increase from $83,000 in FY06 to approximately $300,000 in FY07 due to accelerated amortisation of intanglible assets.   Acquisition Update As announced on 28 February 2007, Jumbo has expanded its scope for future growth by reviewing acquisition opportunities in the E-Commerce and Information Technology Industries. Following 6 months of intensive target identification and selection, effort has now been focused on a shortlist of opportunities. “Completing an acquisition is a top priority for Jumbo to build a new division with additional revenue streams to the lottery division”, said Mr Veverka. The company has significant experience in the E-Commerce industry dating back to 1995 with the development of some of the first software applications in the world to handle secure online sales.   For further Information: Mike Veverka CEO, Jumbo Corporation (07) 3831 3705

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