PETALING JAYA: Sports Toto Bhd
’s earnings are expected to stabilise in the coming quarters, supported by normalising tax rates and resilient numbers forecast operator ( O) sales, although losses at its United Kingdom luxury car unit H.R. Owen and softer jackpot dynamics could cap near-term upside.
Hong Leong Investment Bank (HLIB) Research said it anticipates a largely steady performance from the O segment in the third quarter, with festive demand providing some support but offset by less attractive jackpot accumulations.
“We anticipate flattish quarter-on-quarter (q-o-q) performance from Sports Toto’s O segment,” the research house noted
It added that H.R. Owen is likely to remain in the red due to ongoing cost pressures from newly implemented labour regulations in the United Kingdom.
Nevertheless, HLIB Research expects sequential improvement at the group level as effective tax rates normalise.
TA Research also anticipates seasonal uplift in gaming operations but cautioned that the absence of jackpot-driven excitement seen a year earlier could weigh on year-on-year (y-o-y) comparisons.
“We expect the third quarter of financial year ending June 2026, O revenue to improve q-o-q, however, the absence of jackpot bonanza suggests that earnings performance would likely drop y-o-y,” it said.
Sports Toto’s first half of financial year 2026 results reflected these mixed dynamics. Core net profit for the six months ended December 2025 declined 27.3% y-o-y to RM63.9mil, falling short of consensus expectations and representing roughly one-third of HLIB Research’s full-year forecast.
The shortfall was largely attributed to weaker-than-expected margins at H.R. Owen and a higher group effective tax rate.
