Tatts Group Ltd's first half net profit inched higher as gaming and lotteries grew and the lotteries, poker machines and wagering firm expects a better second half.
Net profit for the six months to December 31, 2009 was $144.96 million up 0.2 per cent on $144.73 million in the prior first half.
In morning trade, Tatts shares were down four cents or 1.68 per cent at $2.34.
Tatts had expected growth to moderate this financial year as benefits from the federal government's stimulus packages, lower petrol prices and lower interest rates washed out of the economy.
Revenue was up 1.2 per cent at $1.6 billion for the first half of 2009/10 and the company declared a first half dividend of 10 cents, unchanged from first half 2008/09.
Tatts chief executive Dick McIlwain said on Thursday the group would deliver better operating outcomes in the second half "now that the most powerful elements of last year's federal government's stimulus packages and the requirement to bring forward expenditure in a number of the group's businesses have passed".
He said the group's wagering and lottery business continued to grow reflecting an increase in household disposable income.
Wagering revenue was up 0.8 per cent on the prior first half at $321 million and lotteries revenue grew 8.9 per cent to $527.8 million.
"Meanwhile, gaming machine revenues have struggled to record any substantial first half growth over the last three years," Mr McIlwain said.
Tatts Pokies revenue was down 4.6 per cent at $639.4 million on the prior first half.
Tatts Pokies expenses were inflated in the first half as a result of a requirement to bring forward the anticipated annual expenditure on games needed to comply with new maximum bet limits in Victoria.
Full 2009/10 expenses were expected to be marginally lower than those in the last financial year.
The venue and service support businesses of Maxgaming and Bytecraft continue to build their revenue base and their profits would accelerate as revenues increase and expenses stabilise, Mr McIlwain said in a statement.
He said completion of the sale of the South African gaming business and a major re-sizing of the UK gaming machine business, Talarius, would change the profile of Tatts' international activities.
Talarius revenue growth was largely the result of two acquisitions in the 2009 financial year but the original business was showing signs of growth and loss making venues are being closed.
Net debt at December 31 was $628 million compared to $734 million at the same time last year.
AAP
