Pollard Banknote maintains efficiency to break FY24 targets
https://www.pollardbanknote.com/2025/03/11/q4-2024/
POLLARD BANKNOTE REPORTS 4TH QUARTER AND ANNUAL FINANCIAL RESULTS
WINNIPEG, Manitoba, March 10, 2025 /CNW/ - Pollard Banknote Limited (TSX: PBL) (“Pollard”) today released its financial results for the three months and year ended December 31, 2024. Full Year 2024 Results and Highlights
• Established a new record for revenue at $557.1 million, up 7.1% from last year.
• Combined sales(1) in the year, including our share of NPi’s joint venture sales, attained $665.9 million, up 10.9% from $600.6 million in 2023.
• Net income was $35.2 million, an increase of $3.8 million or 12.1% over $31.4 million earned in 2023.
• Adjusted EBITDA(1) achieved a record annual amount of $114.5 million, $23.2 million or 25.4% higher than the previous year.
• Income from operations reached $69.8 million, up $23.8 million or 51.7% from the previous year.
• Instant ticket margins increased throughout 2024 due to the ongoing impact of increased selling prices due to the success in repricing our contracts as they came up for rebid. The effect of repriced contracts had increasing impact during 2024 and the full effect will be reflected in 2025.
• During 2024 we were awarded our first U.S. contract for our CatalystTM iLottery solution with the Kansas Lottery and subsequent to year end, on February 13, 2025 the solution successfully went live.
• Our joint venture iLottery operations generated very strong results in comparison to last year, contributing $59.3 million in combined income before income taxes in 2024, 20.8% higher than the $49.1 million earned in 2023.
• Expanded our product offerings with the acquisition of Clarence J. Venne, LLC during the year, a leading manufacturer of bingo daubers primarily used in the charitable gaming market. (1) See Non-GAAP measures for explanation Fourth Quarter Results and Highlights
• Revenue reached $140.3 million, up 3.5% from the fourth quarter of last year.
• Combined sales(1) in the quarter, including our share of our NeoPollard Interactive LLC (“NPi”) joint venture sales, reached $168.2 million, up 6.9% from $157.3 million in 2023. - 2 -
• Adjusted EBITDA(1) attained $25.2 million, similar to the $25.7 million earned in the fourth quarter of 2023.
• Adjusted EBITDA was negatively impacted during the quarter due to manufacturing issues related to our instant ticket production causing higher spoilage on certain large games.
• Production volume of instant tickets during the fourth quarter was lower than the previous quarters in 2024 based on a lower order pattern typically experienced in the fourth quarter.
“2024 was a very successful year for Pollard Banknote, not only through reaching a number of record financial results, but also with the achievement of a number of critical business milestones,” remarked John Pollard, Co-Chief Executive Officer. “Our core instant ticket business increased its margin significantly compared to 2023 as the success of our instant ticket repricing strategy continued to be reflected in our financial results. Strong demand in our charitable gaming operations led to increased profit contributions in 2024.”
“Our Combined Sales (which includes our 50% share of our iLottery joint venture revenue) was $665.9 million, a reflection of the strong growth experienced in our business lines. Both the lottery and charitable gaming sectors continue to perform well in North America and internationally.”
“Adjusted EBITDA grew over 25% compared to last year, a substantial new record not only reflecting our improving instant ticket margins but also the results of investments we have made over the years in all areas including digital, and iLottery products and solutions.”
“Our margins also benefited from a cost structure reflective of slightly lower cost inputs during 2024 relative to the previous year and we are hopeful of continued improvements in the costs of important inputs like paper and ink in the future.”
“Significant investment in our CatalystTM iLottery Gaming Platform and eInstant game content continued throughout 2024, culminating in August with the official awarding of a contract to provide the iLottery solution for the Kansas Lottery. The Kansas Lottery has been a very important, long-time customer of Pollard Banknote and we have worked together providing technology services including our loyalty solution and other products successfully during that time.”
“After a thorough and ambitious implementation period, the iLottery platform successfully went live on February 13, 2025, becoming the fastest implementation of a full iLottery program in U.S. history. This successful launch is recognition not only of the large investment made over several years in developing our offering, but also a confirmation of the unique and powerful features associated with our cloud-native, modular, omni channel and API-first iLottery solution. CatalystTM is a state-of-the-art solution that in addition to running an iLottery system, is also a fully capable central gaming system, able to process all lottery sales including physical sales of products at retail in addition to sales - 3 - over the internet. This allows lotteries to consolidate sales information in one central source, a much more efficient method to assist in effectively understanding their customers.”
“In addition to the success of our gaming platform, our eInstant game studio has developed some very unique and successful eInstant game content that we have delivered to a number of lotteries in both North America and Europe, including third-party platform operators, and have a number of other implementations in progress. The success of great eInstant games is not only important in conjunction with the operation of our own gaming platform but is a great calling card to highlight our expertise through direct sales to other iLottery operators.”
“We continue to see very active discussions throughout the lottery industry in both North America and internationally regarding iLottery opportunities and the success of our Kansas implementation has provided a focused talking point for these discussions. The iLottery development and sales process is long, however we remain fully engaged in expanding our presence in this important and growing business area.”
“Our joint venture iLottery operations produced record results throughout 2024,” stated Doug Pollard, Co-Chief Executive Officer, “generating organic growth despite a lower number of large jackpot runs in draw-based games including Powerball® and Mega Millions® during the year compared to 2023. In October of 2024 the West Virginia Lottery went live as the sixth contract serviced through the joint operation. In addition, we were pleased to execute a contract extension with the Virginia Lottery for two more years taking it through to October 2028. The combined results of our joint venture operations contributed $59.3 million to our income before income taxes in 2024, up significantly from $49.1 million in 2023.” “Our charitable gaming markets continued to show strong demand, in both printed products and eTabs play. We see eTabs in particular as an exciting area for charities to expand operations and generate more funds for the good causes they serve.”
“Cashflow remained strong in 2024, with $73.9 million in operating cashflow generated during the year. This strong cashflow allowed us to finance significant investments in capital assets, including intangibles, primarily with internally generated funds, maintaining a very conservative balance sheet.”
“Strategic and financially accretive acquisitions have been an important part of our success, and in 2024 we purchased Clarence J. Venne, LLC, a long-time leader in the manufacture of bingo daubers used primarily in the charitable gaming market. This business has seamlessly joined our charitable gaming group and filled an important opening in our product portfolio. Being able to offer the complete spectrum of products and services to distributors and the ultimate charities is a critical factor in ensuring success in this market and this acquisition is evidence of our commitment.”
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“Our fourth quarter results reflected lower volumes in our instant ticket business due to the timing of customer orders, certain manufacturing issues generated additional spoilage and the impact of implementation start-up costs for the Kansas iLottery which reduced margins during the period. These combined factors represent an unusual confluence of business events that reduced earnings from our fourth quarter expectations. We believe going forward for 2025 our instant tickets sales volume will be similar to 2024 levels, and our spoilage will return to lower historic levels.”
“Recently there has been uncertainty regarding the nature, extent and duration of various protectionist trade measures including tariffs and possible counter tariffs that have been and may be enacted within North America and the consequential impact on our cost structure. The structure of our business, with significant manufacturing facilities and other businesses long established in both the U.S. and Canada, will help mitigate both cross border activity and material impacts on our financial results. We have the ability to produce almost all of the products we sell to our U.S. customers in our U.S. manufacturing facilities.
We will continue to assess both the short-term and long-term impacts and necessary countermeasures that can be undertaken to reduce the potential negative impacts.” “2024 was a very successful record setting year for Pollard Banknote,” concluded John Pollard. “Our vision of being the partner of choice for lotteries and charitable organizations drives our strategic focus and is the core of our success. We are very excited for the many opportunities that await us going forward to help our customers generate more funds for good causes.”
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