KUALA LUMPUR: Sports Toto Bhd (SPToto) reported RM1.62 billion revenue for its fourth quarter 2023, registering an increase of 10.7% over the revenue of RM1.46 billion in the previous year’s corresponding quarter. The group also registered RM95 million pre- tax profit, which is an improvement of 15.1% from the pre-tax profit of RM82.6 million in the corresponding quarter of the previous year.
The improved results for the current quarter ended June 30, 2023 was mainly due to the better performance reported by H.R. Owen Plc (H.R. Owen) but partially set off by lower results from STM Lottery Sdn Bhd (STM Lottery).
For the current quarter ended June 30, 2023, STM Lottery reported higher average revenue per draw as compared to the previous year corresponding quarter. However, the total revenue in the current quarter was lower by 2.5%, mainly attributed to a lesser number of draws (i.e. 40 draws versus 42 draws in the corresponding quarter) conducted in the current quarter.
This resulted in a 16.0% drop in pre-tax profit which was in line with the lower revenue attained and the higher operating expenses incurred in the current quarter under review.
H.R. Owen achieved an 18.1% growth in revenue as compared to the previous year corresponding quarter, which was attributed to the improved sales from both new and used car sectors coupled with favourable foreign exchange effect.
Its pre-tax profit has risen by 105.9% to RM22.8 million from RM11.1 million recorded in the previous year corresponding quarter. The increase was due to lower restoration costs incurred as compared to the amounts that had been provided for, as well as the lower lease related expenses incurred in the current quarter following the relocation of certain showroom and aftersales service sites to the Hatfield Centre.
In the current financial year ended June 30, 2023, SPToto reported a revenue of RM6.1 billion, representing an increase of 16.6% over the revenue of RM5.23 billion reported in the previous year. The group’s pre-tax profit has also increased by 23.4% to RM337.1 million compared to the pre-tax profit of RM273.3 million reported in the previous year. The improved performance was mainly attributed to improved sales from STM Lottery and higher share of associated companies’ profits but partially set off by H.R. Owen’s lower results recorded in the current year under review.
STM Lottery registered revenue and pre-tax profit growth of 32.1% and 30.7% respectively as compared to the previous year, driven by the full resumption of business operations and higher accumulated jackpot prizes. In the previous financial year, there were cancellation of 37 draws arising from the imposition of nationwide lockdown from June 1, 2021 to September 13, 2021.
H.R. Owen’s revenue rose 2.7% in the current year ended June 30, 2023 as compared to the previous year but its pre-tax profit dropped by 56.3% to RM38.6 million in the current year from RM88.3 million in the previous year.
The outstanding performance recorded in the previous year benefitted from the exceptionally strong demand in used car leading to strong used car profit margin as a result of new car supply constraints. Its current year pre-tax profit was impacted by higher operating costs as a result of inflationary pressures and higher finance costs arising from interest rate hike during the current year under review.
The board of directors has declared a fourth interim dividend of 2.5 sen per share for the financial year ended June 30, 2023. This dividend, payable on October 20, 2023, amounts to RM33.3 million. The entitlement date has been fixed on October 2, 2023.
With this, the total dividend distribution for the financial year is 9.0 sen per share, amounting to approximately RM120.8 million.
The management of SPToto is cautiously optimistic about the prospects of the Number Forecast Operation (NFO) business in Malaysia. They anticipate continued per draw sales growth driven by stronger consumer spending, easing inflation rates, and positive momentum in the labour market.
The management remains vigilant in mitigating potential local political risks and will closely monitor the financial impact of global and local political and economic developments particularly in the countries that the group has operations.