Sports Toto Bhd reported a 16% drop in net profit for the first quarter ended Sept 30, 2023 (1QFY2024) to RM60.17 million from RM71.5 million a year ago due to higher prize payout, coupled with an increase in operating expenses and finance costs at its UK auto retailing business HR Owen.

KUALA LUMPUR (Nov 21): Sports Toto Bhd reported a 16% drop in net profit for the first quarter ended Sept 30, 2023 (1QFY2024) due to higher prize payout at its numbers forecast operation (NFO), coupled with an increase in operating expenses and finance costs at its UK auto retailing business HR Owen.

Net profit fell to RM60.17 million or 4.52 sen per share for 1QFY2024, from RM71.5 million or 5.34 sen per share a year ago, its stock exchange filing on Tuesday showed.

This is despite revenue growing by 12.4% to RM1.59 billion for 1QFY2024 from RM1.42 billion in the previous corresponding quarter.

The improvement was driven by better average sales per draw as well as higher accumulated jackpot prizes in both digit jackpot and lotto games.

The group announced a share dividend of one treasury share for every 50 existing shares held, with Dec 28 being the ex-date.

Going forward, Sports Toto management is “cautiously optimistic” that its NFO business in Malaysia will continue its upward trajectory of per-draw sales growth driven by favourable consumer spending and overall moderate expansion of the economy.

“We recognise the concerns on local political developments in the northern states of Peninsular Malaysia, with closures of outlets in the state of Kedah and Perlis, which could lead to the proliferation of illegal NFOs activities in the underserved areas. The management is continuing to take the necessary steps to address this issue,” it said.

Sports Toto warned that the business of the illegal NFOs is estimated to be twice the size of legal NFOs. “The increase in illegal NFO activities could potentially deprive the country of tax revenue, conservatively estimated at RM5 billion annually,” it said.

Nonetheless, Sports Toto also said it is confident it will continue to lead in terms of market share in the NFO business for FY2024.

Shares of Sports Toto closed unchanged at RM1.49 on Tuesday, valuing it at RM2.01 billion.