RECENTLY Berjaya Sports Toto Bhd declared a second interim dividend of 5 sen per share. Barely a month ago, it had already announced a first interim of 5 sen. The recent dividend announced will go ex-div on May 29, 2003.
Therefore, total gross dividend distribution per share for the period ended Jan 31, 2003 currently stands at 10 sen. The company paid a total of 25 sen for the corresponding financial period last year.
An analyst from OSK Research assures that the management of Berjaya Sports Toto has committed a dividend payout of approximately 35 sen. They had promised to match the quantum paid back in 2002.
Nevertheless, how much it is willing to fork out would also depend on its fourth quarter financial results ended March 31, 2003. The analyst from OSK Research foresees a remaining payout of 25 sen to be distributed in the last quarter of 2003.
She is estimating a gross payout of 33 sen for the financial year ending in 2003 and 27 sen for financial year 2004.
Another analyst from a foreign research estimates a dividend payout of 30 sen for the current financial year.
The share price is supported by its high dividend yield of 10 per cent and share buyback programme, she says.
Berjaya Sports Toto saw net profit easing 9.3 per cent to RM208 million in the first nine months of financial year ended January from RM229.4 million previously. Revenue also dipped 11.8 per cent to RM1.5 billion from RM1.7 billion previously while earnings per share dropped 18.5 per cent to 33.5 sen from 41.1 sen previously.
The lower sales in the third quarter resulted from competition from illegal operators, the repatriation of illegal foreign workers and weak consumer spending.
A few analysts contacted admit to being initially too bullish when the government first announced the higher prize payout ratios.
As consumer sentiment is unlikely to improve significantly, especially with all the external uncertainties, a more prudent assumption of 6 per cent sales growth for financial year 2004 would be more suitable, says the analyst from the foreign research.
DBS Vickers Securities assistant vice-president Andrew Seah is maintaining his growth of 4.5 per cent to 6 per cent for the first year of the higher prize payout ratio.
The recent liberalisation in the industry has seen some illegal operators matching the prize payout; nonetheless it has come at a cost.
I don't think there is any illegal operator who would be doing better compared to before the tax cut and higher payout, she says.
Analysts are expecting Berjaya Sports Toto to deliver better fourth quarter results. This can be attributed to the higher gaming sales due to Chinese New Year sales in February 2003 and the RM500 hike in the top prize from Jan 1 2003.
Also, Berjaya Sports Toto has the largest network and the most number of games in the country. This has been an advantage, which enables Berjaya Sports Toto to gain market share.
With more outlets, you definitely have higher sales per draw, says the analyst from OSK Research.
She fair values the stock at RM4.06. As at Thursday, the stock closed at RM3.08.
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