Tatts (TTS)

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http://www.tattsgroup.com/

http://www.tattsgroup.com/our-brands

http://www.tattsgroup.com/our-brands/lotteries

Controls Australia lotteries nationwide excluding WA only

Share price $3.10, DPS $0.135, Net Yield 4.35%, Gross Yield (Fully Franked) 6.22%, *Normalised (excluding one-offs) DPS $0.16 Net 5.16%, Gross (7.37%)

* http://tattsgroup.s3.amazonaws.com/01-07...t_levy.pdf

Tatts only compete with Tabcorp in wagering where Tabcorp is the leader.

http://www.tattsgroup.com/investors/shar...fact-sheet

http://tattsgroup.s3.amazonaws.com/fy14_...lease3.pdf

http://tattsgroup.s3.amazonaws.com/26-06...ctoria.pdf

http://tattsgroup.s3.amazonaws.com/08-07...cision.pdf

http://tattsgroup.s3.amazonaws.com/28-07...appeal.pdf

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Never mind the outlook, feel the dividends
David Potts - Twitter: @moneypotts
548 words
31 Aug 2014
Sunday Age
SAGE
English
© 2014 Copyright John Fairfax Holdings Limited. Factiva.Gateway.Messages.Archive.V1_0.ELink
Even as the dividends flowed something was missing from this year's profit reports, and perhaps more remarkably, nobody noticed.
The profits were there all right. Mostly they were better than analysts had been expecting or, as is often the way, been led to expect, although the economy's purple patch earlier this year was a surprise.
That'll be cancelled out by GDP growth in the June quarter, to be released on Wednesday, which will probably be only half that of the March quarter.
The downsizing and sluggish sales were there too but missing in action, or perhaps inaction, and what the market normally hangs out for is some tidbit about the outlook.
After all, reported results are history and not necessarily the whole picture. Wait, what am I saying? We've heard that bit about how challenging it is out there often enough.
And count your blessings that so many execs passed up the opportunity to be "cautiously optimistic", though maybe they're waiting for the annual meetings in November with the safety of five months of the financial year under their belts.
Mind you, retribution would be swift were they to say the next 12 months will be bad.
Or take the freakishly upbeat Tatts Group, of OzLotto, Powerball and pokies fame, marked down because no amount of hyperbole could hide its fall in revenues.
Analysts don't expect much this financial year, not that they did last year either and profits turned out to be better, but this time they could be right.
It should be said they still expect earnings to rise but just by a smaller amount.
We know the economy fell into a funk after the budget and will struggle to pull out of it quickly while the dollar is so high.
As it happens the banks are a good bellwether for profits and not for the obvious reason; it's their lending that makes the economy go round.
CBA was the only bank reporting but is by far the biggest, also ANZ and NAB were kind enough to oblige with a quarterly update.
It was revealing that CBA's revenue growth slowed in the first six months this year and it wasn't alone.
It was also "cautiously positive about the outlook" and according to its chief executive, Ian Narev, "improvements in the economy are likely to be gradual".
He can say that again. Hang on, he did. That's what he said last year.
ANZ reported that in the June quarter "revenue trends [were] a little softer" though there are "some signs of improvement".
At NAB "revenue growth remains" - oh dear - "challenging".
That leaves the profit outlook this year as nothing to write home about.
Maybe it won't matter to share prices. With interest rates so low - and property prices so high - it's not as if there are any decent alternatives to the sharemarket around.
Especially while boards can dispense dividends because the outlook makes them loath to invest.
And at least low rates are a safety net for the market even if missing or less than fulsome outlook statements show they can't do any more to lift profits.

Fairfax Media Management Pty Limited

Document SAGE000020140831ea8v0002q

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Investors doubt Tatts' talk
Taking stock Jessica Gardner
355 words
28 Aug 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Analysts have sharpened their pencils on Tatts Group after falling revenue in its lotteries and wagering businesses contributed to a weaker-than-anticipated result announcement last week.
Chief executive Robbie Cooke said the group had plans to be a more aggressive competitor in wagering. He also said a recent resurgence in jackpots was stimulating the lottery unit.
But the narrative is yet to convince investors. The stock had rallied strongly in the lead-up to the result and hit a 12-month high of $3.62 on the day before last Thursday's announcement.
The share price has fallen 7.5 per cent since then. It closed at $3.35 on Wednesday, just above the average 12-month price target among analysts of $3.32. The group's result sparked downgrades from UBS and Credit Suisse. Bloomberg tracking of ratings shows BBY analyst Russell Wright got in before the damage had been done, downgrading his recommendation to "underperform" in early August.
In a note to clients, UBS analyst Sam Theodore proposed the 2015 fiscal year may be when shareholders pay the price for Tatts's attempts to catch up.
He said guidance for increased operating expenditure for the wagering business "is a function of years of underinvestment".
But on Mr Theodore's estimates of lower than 3 per cent growth in earnings before interest, tax, depreciation and amortisation in wagering he said a return on the increased expenditure may not be achieved.
Morgan Stanley analyst King Goh said a slowdown in lotteries was concerning.
With Tatts operating lotteries in all states except Western Australia, take¬over opportunities are scant.
Mr Goh has considered opportunities for Tatts to expand into Asia in a similar vein to which a pan-European game, EuroMillions, has boosted the pastime in the United Kingdom.
"We think Tatts could possibly replicate this in conjunction with Singapore and Hong Kong to drive larger and more frequent jackpot pools and . . . participation rates," he told clients.
Mr Goh said without lotteries growth Tatts may face "a lower growth trajectory and a likely de-rating."

Fairfax Media Management Pty Limited

Document AFNR000020140827ea8s0002o

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http://sharecafe.com.au/sharecafe.asp?a=...symbol=TTS

TTS - UBS rates the stock as Upgrade to Buy
BY BROKER NEWS - 30/09/2014

Get More Commentary, Dicussion & Market Information On -
• TTS - TATTS GROUP LIMITED

UBS rates the stock as Upgrade to Buy from Neutral

The broker has decided a discounted cash flow model is more appropriate than an earnings multiple model in valuing Tatts' lotteries business given the long-dated nature of licences. The switch results in an increased net valuation and hence a lift in target to $3.45 from $3.25.

Taking this into account and noting TTS has underperformed the index this past month, the broker has upgraded to Buy, suggesting TTS is a high quality defensive with an attractive yield.

Sector: Consumer Services.

Target price is $3.45.Current Price is $3.12. Difference: $0.33 - (brackets indicate current price is over target). If TTS meets the UBS target it will return approximately 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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TTS has been awarded a 540m compensation against Victoria for taking away the Victoria pokie license from August 2013. TTS has received the amount and paid down its debt burden. A projected savings of 12m has been projected or an uplift of $0.0084/share just from savings. However, pending Victoria govt appeal, TTS has yet to account for the net of tax gains amounting to $0.2646 a share.

TTS has previously rallied out of the gates to a high of around 3.55 shortly after the award. At 3.1, share price has totally ignored the gains yet to be accounted post the appeal procedures.

TTS has been unduly punished due to an unexpected cut in its final dividends to 5.5, 3 short of expected due to a levy payable on its old pokie business in Victoria has has since ceased in Aug 2013. The shortfall was spot on line with the levy payable. Hence in the absence of the levy, net div fully franked would have been 16.5

With lotteries license in all Australian states excluding WA, TTS is a dominant defensive play on Australia's consumers (those that try their luck regularly) with solid and consistent yield

At a normalised dps of 16.5 historically, the fully franked yield would have been a healthy 7.6%. Factoring in a 5% growth for current yr a projected net dps of 17.5 is highly likely translating gross yield of 7.98%.

Prefer TTS as a non casino gaming play over TAH.

Vested
TTS
Core
GG

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Lottery operator Intralot pulls scratchies business from Victoria

335 words
25 Oct 2014
Australian Broadcasting Corporation (ABC) News
ABCNEW
English
© 2014 Australian Broadcasting Corporation

Gaming company Intralot will surrender its Victorian Keno and scratchies business, as it chases millions of dollars in losses from the taxpayer.

Gaming company Intralot is surrendering its Victorian Keno and scratchies business and suing the State Government for millions of dollars in losses.

The business reached an agreement with the Government and rival Tatts Group to transfer its licences.

Intralot had been operating in Victoria since July 2008 after the former

Under the agreement, Tatts Group [then Tattersall's] had the rights to run the main lottery and Intralot provided scratchies.

The deal ended 50 years of Tattersall's monopoly.

The Government said Intralot was suing the state for $63 million.

Victorian Premier Denis Napthine said the situation was Labor's fault.

"It shows quite clearly you simply can't trust Labor," Dr Napthine said.

"You can't trust them to manage gaming contracts, you can't trust them to manage projects, you can't trust them to manage money, you can't trust them to manage Victoria."

But Opposition Leader Daniel Andrews said the previous government did not make it hard the company to succeed.

"The process was signed off by probity auditors," Mr Andrews said.

"They've made business decisions, and that overseas business will not be receiving any money under a Labor government because they're not entitled to it."

Gaming Minister Edward O'Donohue said the Government was preparing a defence.

"Intralot is in litigation against the state in relation to the arrangements that the previous Labor government put in place for its licence," Mr O'Donohue said.

"The Government will defend the claim, it will be filing a defence in due course."

Mr O'Donohue said the licence transfer would benefit retailers.

"It will help small business, it will help the retailers that will sell these products," Mr O'Donohue said.

"They will be significantly financially better off with fees of up to $1,600 less per year for most retailers."


Australian Broadcasting Corporation

Document ABCNEW0020141025eaap00002

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http://www.asx.com.au/asxpdf/20141027/pd...dfnpn8.pdf

The return of scratch-its to Tatts in Victoria

27 October 2014 - The Victorian Government has approved a variation to Tatts’
public lotteries licence in Victoria, expanding the Group’s authorised product offering
to include scratch-its and daily keno. This action follows a decision by Intralot to end
its category 2 public lotteries licence and no longer offer these products for sale in
Victoria and Tasmania.
Tatts’ new licence arrangements together with transition arrangements agreed
between the State, Intralot and Tatts, will:
 ensure no disruption in service for customers and retailers;
 protect State revenues; and
 provide lower ongoing costs for selling agents.
In announcing the new arrangements, which are expected to become effective from
February 2015, Tatts Group’s Managing Director and CEO Robbie Cooke said:
“We are delighted to have been provided the opportunity to return to selling
scratch-its in Victoria along with daily keno. These products are highly
complementary with our existing portfolio of lottery games in Victoria, which
include the ever popular Tattslotto, Powerball and Oz Lotto.
This announcement provides 760 plus retail partners in Victoria with an
exciting opportunity to join Tatts in selling the same popular range of instants
we offer in New South Wales, Queensland, ACT, South Australia, Tasmania
and Northern Territory. With a 130-year history and having sold lotteries in
Victoria dating back to 1954, Tatts is proud to be trusted with this opportunity
and is committed to success. ”
The amended licence arrangements (which continue for the term of Tatts’ current
Victorian licence) are expected to make a positive contribution to Tatts’ EBITDA from
commencement. Intralot achieved $51.9 million in sales of scratch-its and daily keno
in the financial year ended 30 June 2014. To assist in ensuring a smooth transition,
Tatts has agreed to purchase specified ancillary assets from Intralot and has secured
licences over certain intellectual property rights and software – the consideration for
which is non-material. Tatts will be working with Intralot agents to coordinate a
seamless transition over the coming months. This transaction is subject to certain
conditions precedent and regulatory approvals (including ACCC).
---- OOO ----
Media enquiries please contact:
Analysts and institutions please contact:
Carolyn Prendergast
Corporate Communications Manager
Ph: (07) 3435 4543
Mob: 0409 910 561
E: carolyn.prendergast@tattsgroup.com
Giovanni Rizzo or:
General Manager – Investor Relations
Ph: (07) 3877 1002
Mob: 0409 578 247
E: giovanni.rizzo@tattsgroup.com
Monique Rennell
Executive Assistant to CEO
Ph: (07) 3435 4478
E: monique.rennell@tattsgroup.com

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Tatts' Vic lotto licence expanded
OCTOBER 27, 2014 9:30AM

Tatts Group will be allowed to sell scratch-its and daily keno from early next year, after the Victorian government approved a variation to Tatts’ public lotteries licence in the state.

The approval follows a decision by Intralot to end its category 2 public lotteries licence and no longer offer these products for sale in Victoria and Tasmania.

Tatts said it new licence arrangements -- together with transition arrangements agreed between the state, Intralot and Tatts -- will ensure no disruption in service for customers and retailers, as well as protect state revenues.

The new arrangements become effective in February 2015 and are expected to make a positive contribution to Tatts’ earnings before interest, tax, depreciation and amortisation (EBITDA) from commencement.

Tatts Group’s managing director and chief executive Robbie Cooke said the group was pleased to have been provided the opportunity to return to selling scratch-its in Victoria along with daily keno.

"These products are highly complementary with our existing portfolio of lottery games in Victoria, which include the ever popular Tattslotto, Powerball and Oz Lotto," he said.

Mr Cooke said the announcement provides 760-plus retail partners in Victoria with an opportunity to join Tatts in selling the same range of instants Tatts offers in NSW, Queensland, ACT, South Australia, Tasmania and the Northern Territory.

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http://www.asx.com.au/asxpdf/20141029/pd...yf6692.pdf

http://www.asx.com.au/asxpdf/20141029/pd...5hbrpq.pdf

Run of jackpots helps lift Tatts first quarter revenue
MICHAEL RODDAN THE AUSTRALIAN OCTOBER 29, 2014 3:09PM

TATTS has delivered a lift in revenues from its wagering and lotteries divisions in the first quarter of fiscal 2015.

The lottery and gaming company told shareholders at its annual general meeting it had continued the strong start to the year it had reported in August at the company’s full-year results announcement.

Tatts Group (TTS) has seen a positive turnaround in its wagering business, with first quarter wagering revenue up 1 per cent on the prior corresponding period.

Tatts said it had seen a strong run of jackpots in lotteries with 10 draws above $15 million in the year to date, against eight in the prior year.

This performance has delivered a 12 per cent lift in first quarter lotteries revenues on the same period last year, the company said.

The company said it will be launching its new website soon, and will reveal its new wagering brand in the next month.

Managing director, Robert Cooke, said: “In addition we are aiming to roll out the very popular New South Wales Lucky Lotteries game across all our markets”.

Business Spectator

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TTS has delivered a stronger 12% uplift in 1Q revenue growth for its core lotteries division relative to TAH's 6.6% overall and 8% for wagering.

While they are both focusing on different segment of non-casino gaming in Australia, it does take much to see which gaming company is growing at higher rates.

http://www.valuebuddies.com/thread-5853-...l#pid97132

Vested
TTS