Australian lottery and betting operator Tatts Group saw its profit jump double-digits in its fiscal Q1 thanks to a strong performance across its digital operations.
On Tuesday, Tatts issued a trading update which showed group revenue of A$743m (US $564.6m) in the three months ending September 30, a 6.8% rise over the same period last year. Earnings improved 9.6% to A$128.2m, while net profit after tax from continuing operations shot up nearly 15% to A$67.2m.
The company credited the gains to an increased focus on cost controls, as well as lottery customer enthusiasm driven by larger than usual jackpots. While the number of jackpots over A$15m during Q1 was unchanged from last year, the average size of each of these jackpots was A$7.5m higher, including two mega-pots of A$50m.
As a result, Tatts’ mainstay lottery revenue was up 8.8%, driven by even stronger digital lottery sales, which improved 29.6% year-on-year, boosting digital to 16.4% of all lottery sales.
In fact, Tatts said all three of its major draw games – Saturday Lotto, Powerball and Oz Lotto – had achieved “strong revenue growth.” Which sort of undercuts the hyperbolic claims of Tatts chairman Harry Boon (pictured, wondering where all that lottery money came from) that online lottery betting operator Lottoland was drinking Tatts’ milkshake, but hey, all’s fair in love, war and lotteries, apparently.
Tatts’ UBET wagering division, which could be on the chopping block if the merger with rival Tabcorp goes through, also had strong digital growth. UBET’s overall wagering turnover was up 1.8%, while digital turnover improved 15.8%, boosting digital’s share of overall turnover by nearly four points to 34.3%.
The MAX gaming services business reported revenue rising 4.7%, while the MAXtech technical support services division saw revenue improve 5.3%.
Tatts also updated shareholders on when they’ll have a chance to vote on the oft-delayed proposed merger with Tabcorp. Following a new Supreme Court of Victoria order, Tatts has moved the vote to 3pm on December 12, which is also the new date of Tatts’ annual general meeting in Brisbane.