Pollard Banknote has reported ‘significant’ year-on-year growth in its ilottery operations for the second quarter of 2022.
Revealing its financial results for the period ended June 30, 2022, Pollard Banknote’s combined ilottery sales increased 11.4% YoY to $18.6m (Q2 2021: $16.7m).
Pollard provides ilottery services to the North American lottery market and has a contract with NeoGames to provide its technology services, in return for a 50% financial interest in the operation.
The duo established NeoPollard interactive (NPi), with all ilottery related customer contracts awarded to the company, excluding the Michigan Lottery ilottery contract.
Earlier this year, the firm lauded its ‘remarkable’ Michigan Lottery instant ticket sales in FY2021.
According to Pollard Banknote, NPi ‘continued to demonstrate strong organic growth’ when compared to the same period last year, and both NPi and the Michigan ilottery operation have grown ‘sequentially’ over the past year, achieving the group’s second highest quarterly margin of $7.5m.
“Our ilottery business is showing strong organic growth, both sequentially and in comparison to historic quarters, and we anticipate this will continue going forward,” Pollard Banknote stated in its Q2 release.
“[The] Michigan ilottery has demonstrated resilient incremental growth over the last four quarters, despite the competitive environment with private igaming operations. All of our contracts within NPi have also shown strong organic growth and we expect this to carry on.”
Pollard Banknote sales totalled $115.9m in Q2, up 2.2% from the same period last year.
However, its operational income decreased by 28% from $12.1m in Q2 of 2021 to $8.7m in 2022. This decline has been heavily attributed to the receipt of $3.2m in Canada Emergency Wage Subsidy (CEWS) in 2021.
Furthermore, the firm’s adjusted EBITDA also declined to $18.9m in Q2 – down from $22.6m in 2021.
Pollard also noted a negative impact on its instant ticket production and sales volumes due to factors such as staffing and production challenges, though retail sales of its instant tickets products remained at ‘strong’ levels.
“Our second quarter results are comparable with our first quarter of 2022, reflecting the strong demand in our main product categories,” said John Pollard, Co-Chief Executive Officer. “In particular, our charitable gaming businesses, including egaming systems, and our ilottery operations generated very strong results again, combining strong revenue with effective cost management to produce very positive margins.
“Our largest business remains instant tickets, and we continue to see challenges in this area, notwithstanding the ongoing significant demand from our lottery customers.”
Fellow Co-Chief Executive Officer Doug Pollard added: “Demand for all of our main products remains very strong. Instant ticket sales at retail remain at the high levels experienced in the first quarter of 2022 and as a result, our lottery orders also remain very strong.
“Charitable gaming, including our egaming systems solutions, are also seeing very strong consumer demand. Our ilottery financial results achieved its second highest quarterly results ever.
“Lotteries are increasingly looking at new and innovative methods to provide exciting gaming opportunities to their customers, such as in-lane purchasing solutions and new game content, and Pollard is well-positioned to take advantage of these new opportunities.”
Doug Pollard continued: “Our ilottery operations achieved significant growth when compared to the second quarter of 2021 and sequentially over the last few quarters. The $7.5m margin earned from all of our ilottery contracts is second only to the first quarter of 2021, which experienced a very large double jackpot run.”
Meanwhile, the company has also confirmed that former Director Dr. Jerry Gray has been reappointed in the position until the Annual General Meeting in May 2023.