A focus on cutting costs would help improve itsbusiness margins

Tag : boots
Tatts yesterday booked a reported net profit of $257.6 million for2007-08, down 10.7 per cent on the prior year.
However, after excluding a $57.4 million tax benefit in the 2006-07result, net profit was up 11.4 per cent.
Tatts Group Ltd's wagering operations recovered in the second half ofthe year after an adverse impact from the equine influenza outbreakin the first half.
Its lottery operations performed well despite new competition frominternational giant Intralot in Victoria.
"Our businesses have all got nice momentum as we move into the newfinancial year," chief executive Dick McIlwain said.
"We're expecting this half to be very solid the way things arepanning out for us.
"There's nothing on our horizon that gives us any real cause forconcern."
But Mr McIlwain suggested analysts' expectations of 12 per centprofit growth in 2008-09 were unrealistic.
"I don't imagine the current environment would support that kind ofoutcome," he said.
"We're certainly looking more at single digits than high singledigits in the current environment, but we're only a month in,there's a long way to go."
Tatts shares fell 5c to $2.57 at 3.14pm.
Tatts' reported revenue for the 12 months to June 30, 2008 rose27.9 per cent to $3.09 billion.
The company said a focus on cutting costs would help improve itsbusiness margins fiscal 2009.
Tatts will also reduce spending on its poker machine operations,given it will lose its Victorian poker machine duopoly with rivalTabcorp Holdings Ltd after 2012.
But Tatts intends to maintain revenue streams rather than shrinkthe business.
The company's balance sheet can support acquisitions, but there areno targets in sight at the moment.
Mr McIlwain said the annual result showed the gambling business was"as tough as old boots".
"We copped equine influenza in the first half, a few changes to theway you can run gaming machines in this state [Victoria], but thenall of a sudden lotteries kick in with a marvellous run," he said.
Reported earnings before interest and tax (EBIT) from Tatts' pokermachines business fell 1.4 per cent to $195.2 million in 2007-08,as it absorbed a $17.9 million lift in the tax levy per machine inVictoria.
The business also had to deal with the Victorian government'sdecision to remove up to 40 per cent of the machines from some ofTatts Pokies' best venues in December 2007.
In wagering, EBIT lifted 29.1 per cent to $116.3 million despite anegative four-month effect from horse flu.
"The momentum we are carrying into full year 2009 should guaranteea better result for the current half," Tatts said.
Tatts' lotteries business in Victoria, Tasmania, Northern Territoryand the ACT, and Golden Casket in Queensland, plus a one-in-11 yearrun of jackpots that stimulated customer interest late in the 2008financial year, generated EBIT of $93.7 million, up 260.3 per cent.
"The full year 2009 outlook is going to be clouded by the VictorianGovernment decision to fragment the lottery market, delays inapprovals for new games, and tougher comparables in the secondhalf," Tatts said.
Tatts did not declare a final dividend, due to the way it treated a$776 million write-down of its gaming licence and brand assets,announced in June, in its accounts. But it will pay a specialdividend of 10.5 cents in October.
AAP