Journey to Wealth
Berjaya Sports Toto - Recovery in ticket sales HOLD
- Maintain a HOLD on Berjaya Sports Toto (BToto) with an unchanged DCF-based fair value of RM4.70/share.
- BToto's FY12 results were in line with our expectations and consensus estimates. The group recorded a 5.1% expansion in revenue and a 14.9% improvement in net profit in FY12.
- BToto has declared a final gross DPS of 5 sen for 4QFY12, which brings total gross DPS to 27 sen for FY12 (FY11: 21 sen). This translates into an attractive yield of 6.4%.
- For FY13F, we have forecast ticket sales per draw to increase by 3%. We have also assumed a prize payout of 65%.
- We are neutral on the listing of Sports Toto Malaysia Trust in Singapore.
- BToto would essentially be a holding company after the proposed listing with insignificant earnings contribution from Berjaya Philippines and International Lottery Totalisator Systems, U.S.
- BToto's ticket sales rose 4.8% YoY to RM3.4bil in FY12. On a per draw basis, NFO revenue inched up 3.6% to RM17.6mil. There were 178 draws in FY12 and 176 draws in FY11.
- BToto benefited from positive response to its 4D Jackpot game and Supreme Toto 6/58 game, which had its first prize money snowballing to RM58mil in January 2012.
- NFO operating profit strengthened 10.5% YoY to RM461mil in FY12 on the back of a lower prize payout and higher revenue.
- We estimate prize payout at 64.8% in FY12 against 65.4% in FY11.
- Against 3QFY12, ticket sales in 4QFY12 fell 7.2% to RM861.1mil. 3QFY12 enjoyed positive ticket revenue from the Chinese New Year festive demand.
- On a per draw basis, NFO revenue shrank 5.1% QoQ to RM17.6mil in 4QFY12. There were 45 draws in 4QFY12 versus 46 draws in 3QFY12.
- BToto's EBIT margin declined from 17.2% in 3QFY12 to 14.3% in 4QFY12 on the back of an increase in the prize payout ratio. We estimate prize payout ratio at a high 67.4% in 4QFY12 against 63.3% in 3QFY12.
Source: AmeSecurities
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
