further to my post before, i take the liberty to post a section of the comments made after the AGM....by citigroup. pls DYOR...thx. I am not promoting the stock, i hold it happily. i buy on low sp...
AGM 2009: FY10 will see slower (but positive) growth Lotteries strong, Wagering seeing margin pressure, Pokies tough - TTS faces a tougher FY10E, as consumers moderate their spending in response to tougher economic conditions and aren't supported by stimulus payments. TTS won't repeat FY09 8.3% eps growth, but "won't be a lot different". Our forecasts assume 7.9% eps growth, may be marginally too high. What was new at AGM - TTS flagged cost pressures in wagering as punters migrate to fixed odds and as TTS establishes its NT sportsbook by end CY09. Turnover is up 5%, revenue up 3%, but EBITDA expected to be flat.
Expect tough comps in Vic Pokies without FY09 stimulus payments - TTS re-iterated comments made at FY09, that even with additional machines, TTS expects weaker revenue growth without the benefit of the FY09 stimulus payments in 1H and 2H. 1H10 EBITDA will fall over PCP, given investments in new games and new restrictions on maximum bet per spin.
Lotteries are still lucky (for TTS) - Lotteries revenue is up 8% in 1H10 to date, with margins improving as well, due to Powerball jackpots in July 2009. TTS still warn FY10 could be lower than FY09, give difficult OZ Lotto comps.
Other Divisions - Intend to sell South African route ops, no guidance on value, but with FY09 EBITDA at $5.9m, proceeds expected to be modest. Talarius UK sales up 12% yoy, benefiting from 2 acquisitions, but guide that 1H10E profits will be weaker on pcp. Maxgaming and Bytecraft (11% of EBIT) EBITDA up by 5% in 1H10 to date.
Acquisitions & organic growth focus - TTS continues to pursue a number of potential growth avenues including a bid for NSW Lotteries, expansion of Maxgaming into Vic and other networked business opportunities.
TTS Price at posting:
$2.39 Sentiment: Buy Disclosure: Held
