Berjaya Sports Toto earns RM381.7 million for FY10

Berjaya Sports Toto Bhd (Berjaya Sports Toto) earns a net profit of RM381.7 million for its financial year 2010 (FY10), ended April, which is within estimates.ECM Libra Capital Sdn Bhd (ECM Libra) in its research report yesterday revealed that the group’s revenue for this period of RM3.4 billion was an eight per cent decline year-on-year (y-o-y), within expectations of the research house’s full year estimates.

In addition, Berjaya Sports Toto announced a final net dividend per share (DPU) of eight sen which brought its net DPS for FY10 up to 27 sen.

The research house noted that although the revenue from the fourth quarter of the financial year 2010 (4QFY10) of RM858.3 million was one per cent higher quarter-on-quarter (q-o-q) despite one draw less, its net profit for the same period of RM80.9 million was a noticeable 17 per cent drop q-o-q due to a higher prize payout ratio.

Both its revenue and net profit for FY10 eased by eight per cent y-o-y which was attributable to a high base effect from the preceding year driven by strong sales from large mega Toto 6/52 jackpots and new competition from Magnum 3D Jackpot.

On that note, ECM Libra was encouraged to see the group’s 4QFY10 revenue being relatively unchanged q-o-q despite facing some intense competition from Magnum’s 4D Jackpot. It commented that there were only seven draws for Supreme Toto 6/58 in 4QFY10.

The research house believed that the group was gearing up to pay more dividends or embark on merger and acquisitions, either which would provide Berjaya Sports Toto with a much needed re-rating catalyst. This was in line with its free cash flow generation with an earnings before interest, tax, depreciation and amortisation to net debt ratio of more than two times.

Going forward, the research house expected revenue to grow on the back of large Supreme Toto 6/58 jackpots, which recently reached RM23.2 million. It also planned to issue up to RM800 million in medium term notes by the end of this month.

The research house maintained a target price of RM4.91 per share for Berjaya Sports Toto.


-- by Borneo Post