BToto seen remaining an attractive dividend play


The company’s revenue surged 183% quarter-on-quarter to RM1.35bil from RM475.1mil. In a report, Kenanga Research said this was due to the number of draws reverting back to normal at 42 from the MCO-affected previous quarter of only six draws.

PETALING JAYA: Berjaya Sports Toto Bhd continues to offer attractive dividend yields of over 6% as ticket sales have remained robust at 80% to 85% of pre-MCO (movement control order) levels in November, with most outlets opened, say research analysts.

On Wednesday, the group declared a first interim dividend of four sen per share (ex-date: Dec 30 2020; payment date: Jan 19 2021).

For its first financial quarter ended Sept 30,2020 (Q1FY21), the numbers forecast operator (NFO) had turned profitable with a net profit of RM67.9mil from a net loss of RM43.3mil in the preceding quarter.

The company’s revenue surged 183% quarter-on-quarter to RM1.35bil from RM475.1mil.

In a report, Kenanga Research said this was due to the number of draws reverting back to normal at 42 from the MCO-affected previous quarter of only six draws.

Average ticket sales per draw also improved 38% to RM17mil from RM12.3mil.

The luck factor or estimated prize payout ratio (EPPR) also improved to 62.2% from 64.3%.

In addition, the improved NFO results were also helped by lower operating expenses.

Meanwhile, the group’s unit HR Owen - a luxury car distributor based in the United Kingdom, reported a 74% jump in 1QFY21 revenue.

This led to a strong operating profit of RM22.1mil.

The unit had posted an operating loss of RM8.3mil in the previous quarter.

The strong earnings, besides benefitting from backlog clearing sales, are also attributed to austerity measures undertaken by HR Owen and the British government’s relief measures which made up one-third of the earnings in the first quarter.

Meanwhile, Philippine Gaming Management Corp (PGMC) was still faced with a lockdown in the Philippines; thus, the associate’s income remained at a loss of RM5.6mil, from RM4.5mil.

On a year-on-year comparison, the group’s first quarter fiscal 2021 net profit inched up 1% from RM67mil.

Revenue fell 6% from RM1.44bil a year ago.

Overall, its first quarter ticket sales tumbled 18% from average ticket per draw of RM20.7mil.

Its EPPR improved from 64% a year ago.

Kenanga Research said HR Owen’s results were a pleasant surprise.

However it should normalise in the coming quarters while PGMC will remain loss-making as the Covid-19 situation in the Philippines was not abating.

Meanwhile, CGS-CIMB Research said Berjaya Sports Toto’s financial year 2021 forecast (FY21F) enterprise value to earnings before interest, taxes, depreciation, and amortisation ratio (EV/EBITDA) of 9.4 times is at a 12% discount to its 12-year mean. The research house sees attractive FY21F to FY23F yields of 7.6% to 8.1% per annum.

Kenanga Research has maintained its “outperform” call on Berjaya Sports Toto’s stock with a higher discounted cash flow (DCF) derived target price of RM2.45, from RM2.40 post earnings revision. CGS-CIMB Research retains its “add” call on the stock and a DCF-based target price of RM2.35.

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