Pollard Banknote has published its financial report for Q1 of FY2022, revealing an increase in revenue aided by higher sales of ancillary lottery products and services.
The lottery provider reported $113.9m in sales for the period ended March 31, up 1.5% from the same time last year (FY2021:$112.9m), assisted by an increase in sales of digital and loyalty products.
However, a lower instant ticket average selling price decreased sales by $3.9m compared to 2021, partially offset by an increase in instant ticket sales volumes in 2022 which increased sales by $2m.
Lower sales from Michigan ilottery also decreased revenue by $2.5m compared to 2021 when sales were higher as a result of a double jackpot run early in the quarter.
Adjusted EBITDA was also down year-on-year, decreasing to $19m from $23.3m in 2021.
“Given the challenging business conditions we are pleased with our financial results achieved in the first quarter of 2022 and the foundation laid for continuing improvement going forward in 2022,” declared John Pollard, Co-Chief Executive Officer.
“There is significant demand for all of our major products and these trends are expected to continue.
“We set a quarterly record for production of instant tickets in the first quarter, reflecting the continued strong demand from our lottery customers combined with our success in expanding our production capacity through increased staffing.
“Our production volume increased as we proceeded through the first quarter, with noticeably higher volumes produced in March. However, our sales volumes for the first quarter were approximately 7% lower than actual production volumes, due to certain shipments falling into the first part of the second quarter.”
“Lotteries continue to place strong order volumes, well above pre-pandemic levels,” added Doug Pollard, Co-Chief Executive Officer.
“Our ilottery operations recorded their second quarter in a row of solid organic growth, with particularly strong results from our two newest operations in Virginia and Alberta. After the significant impact of the pandemic and large jackpot runs in draw-based games a year ago, we are very pleased to see steady improvement in our existing operations.”
Pollard explained that inflationary price increases on key instant ticket inputs, such as ink and paper, have caused issues for the company.
“While we have been able to pass on these cost increases to our customers in the charitable gaming market, the nature of our long-term lottery contracts, with fundamentally fixed selling prices, makes it difficult to adjust our instant ticket pricing in the short term,” Pollard said.