Tatts Group Limited (ASX: TTS) has this morning reported a 14.6% lift in net profit, which rose to $139.8 million on the back of $1.51 billion in sales, a 1.2% lift on the prior corresponding period. However, it seems that investors were hoping for an even stronger result, selling the stock down 2.1% early in the session to $3.79.
So What: Shares of the gaming business have been trading around their highest price in seven years on a relatively high premium. Prior to today, the stock had risen 27.6% over the last 12 months, handily outperforming the broader S&P/ASX 200 (Index: ^AXJO) (ASX: XJO). As such, a stronger result may have been priced into the shares before this morning's release.
Source: Google Finance
A strong lift in online lottery sales (up 18.4%) was one of the driving forces behind the result, while the company also improved its margins during the period. The company's CEO, Robbie Cooke, said: "Record lotteries earnings despite lower jackpot levels, and the momentum in online sales are the standouts in our performance this half."
Now What: Pleasingly, the group said that its strong momentum had been carried forward into the second half, while it also declared an interim dividend of 9 cents per share, which compares to last year's 8 cent dividend. That comes after rival Tabcorp Holdings Limited (ASX: TAH) announced a total fully franked dividend of 40 cents per share (cps) (including a 30 cps special dividend) earlier in the month.
