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Investor Fact Sheet

Tatts Group is a global leader in the provision of lotteries and lottery related systems as well as a major Australian wagering and sports betting operator underpinned by world class technology and gaming solutions.

Our objective is to be the best global lottery and wagering operator in both the retail sales channel and the online sales channel.

Licences

  • License Information

Lotteries

Tatts is licensed to sell lottery products including Saturday Lotto, Super 66, Monday & Wednesday Lotto, Oz Lotto, The Pools, and Powerball in all states of Australia excluding Western Australia which is still a government owned and operated lottery. Tatts also offer Instant Scratch-it tickets in all states except for Western Australia with Tatts recently announcing that it now will also be selling Instant Scratch-it tickets in Victoria from February 2015.

In 2016 Tatts Group developed a unified master brand for its lotteries division. The new brand is called the Lott. The Lott operates as a channel master brand for the lottery in each jurisdiction including Golden Casket, NSW Lotteries, Tatts, SA Lotteries and Tatts NT. The Lott operates and markets Australia’s leading lottery games that customers know and love including Saturday Lotto, Monday and Wednesday Lotto, Powerball, Oz Lotto, Set for Life, Lucky Lotteries, The Pools and Instant Scratch-Its.

Some highlights of the Lotteries division include:

  • Approximately 48% of the Australian adult population playing a lotto game in the past 12 months
  • Only lottery operator worldwide to develop its own lottery operating system in-house
  • 2.0 million player card members at 31 December 2016
  • 2.3 million players registered on tatts.com
  • Approximately 3,900 retail outlets
  • Online sales represent 13.5% of all lottery sales
  • Tatts Group ranked as the 11th largest lottery operator world-wide

WAGERING

Our Wagering division, UBET, owns the statewide Totalisator Agency Board (TAB) agencies in Queensland, South Australia, Tasmania and the Northern Territory. We provide wagering on thoroughbred racing, harness racing and greyhound racing, as well as major local and international sports events through our network of retail agencies, telephone call centre, on-course betting facilities and our online sales channel.

UBET is Australia’s premier provider of pari-mutuel (or totalisator) and fixed price betting. Borne out of the TAB, UBET is a wholly owned and backed subsidiary of Tatts Group. With Australia’s largest wagering retail footprint, the UBET retail network consists of more than 1,400 standalone, Pub, Club and on-course retail outlets. It also has more than 500,000 digital account holders across the country.

We also operate one of the largest radio stations (based on area covered) in Australia.

Some highlights of our Wagering division include:

  • More than 1,400 retail outlets in Australia (larger retail network than McDonalds)
  • Our wagering online sales represent 31.0% of all wagering sales
  • Developed and rolling-out a new best of breed self-service terminal (SST) with cash handling capabilities
  • Over 391,000 unique devices now operating with Tatts App installed
  • First tote operator to offer 24/7 betting in Australia
  • First tote operator to offer voice recognition software for our call centre

MAX

Our Gaming Solutions business, MAX, is made up of two separate reporting units, namely, MAX and MAXtech. MAX (previously known as Maxgaming) is the Group’s gaming venue services division. This business is founded upon the provision of government mandated electronic monitoring systems to gaming machine venues in New South Wales, Queensland and the Northern Territory. The operation leverages this network and the associated infrastructure to provide additional value-adding services to its contracted venues.

MAXtech (previously known as Bytecraft) is the Group’s in-house maintenance provider and Australia’s largest independent 24/7 service provider. They are a diverse technology and logistics based service provider that specialises in the provision of fully managed, end-to-end technical support services in the gaming, wagering, lottery, retail, information technology and banking sectors.

WHY INVEST IN US?

Tatts Group has a simple business strategy – to be the best global lottery and wagering operator. This strategy can be defined on the following levels:

  • Long-term licences
  • Systems
  • Brands and Products
  • Customer Retail experience
  • Customer Online experience
  • Returns to our shareholders

LONG TERM LICENCES

Our acquisition strategy has always been consistent – acquire long term, value accretive lotteries and wagering businesses. Our acquisition success story has been:

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UNiTAB (UBET) merger Wagering and Gaming Solutions 2006
Golden Casket Lotteries 2007
New South Wales Lotteries Lotteries 2010
TOTE Tasmania Wagering 2011
SA Lotteries Lotteries 2012

The acquisition of these businesses and long term licences has ensured that a significant portion of our lotteries earnings before interest and tax are generated from licences that still have over 35 years to run while 95% of our wagering earnings before interest and tax are generated from licences that still have over 35 years to run.

We continue a pro-active approach to identifying and evaluating new business opportunities both in Australia and internationally and will sensibly pursue those opportunities that present commercially attractive and strategic outcomes which benefit the Group.

SYSTEMS

Tatts prides itself as being the only owner and operator of lotteries to have developed their own lottery system worldwide. This lottery system has been rolled-out to over 3,900 retail agencies across Australia and consistently maintains an uptime rate well in excess of 95%. We have also developed our own wagering retail and online system that has been rolled-out into over 1,400 retail agencies. Online is clearly a key distribution channel for both our lotteries and wagering operations. Providing online and mobile products that are easy to use and intuitive is critical for our future success and will provide an opportunity to grow our sales beyond the accepted norms of the past. We are investing in building the Group’s capabilities in this extremely important area and have been working on some of the underlying systems necessary to give us more flexibility and capabilities. This journey will be a continuing one but we are now in a position to start matching it with the best.

BRANDS AND PRODUCTS

In May 2015 Tatts Group launched UBET, uniting nine wagering brands into one national identity. Working with leading brand specialist Hulsbosch, The Group was able to define business brand strategies, identify international wagering trends and understand what customers wanted. All our points of customer interaction have been considered – including our physical retail network and our retailing presentation. The results of this work is seen in UBET with a class leading wagering website and App and new generation wagering concept stores that are progressively being rolled-out across our entire network.

The first of June 2016 also marked a significant milestone for our lotteries brands, with the launch of the Lott, which brings together all seven jurisdictions under one unifying brand.

The Lott is bold and simple and a winning combination for customers, retailers and our team. Across our 4,000 lotteries retail outlets, the Lott now sits alongside existing retail brands – Tatts, NSW Lotteries, Golden Casket or SA Lotteries. The Lott also transforms customers digital experience, where they are able to choose their jurisdiction before continuing to play.

Gaming was also re-branded in 2016 with the launch of MAX in August. Following months of working with Hulsbosch, MAX brings together two key businesses, Bytecraft and Maxgaming. The brand is simple, punchy and to the point. It sums up what we do, and how we do it.

CUSTOMER RETAIL EXPERIENCE

UBET and Tatts Lotteries (the Lott) as a world leading retailer are here to stay. We view retail exclusivity as an extremely valuable asset both from a customer experience point of view and from its potential to act as a valuable marketing tool. Growth in these retail environments will be boosted through the continued roll-out of self-service terminals and potential virtual racing products in the future.

CUSTOMER ONLINE EXPERIENCE

Australia has one of the highest tablet and smartphone penetration rates in the world and as such is seen as one of the more significant growth areas for the Group both from a lotteries and wagering perspective. Providing online and mobile products that are easy to use and intuitive is critical to the growth in online.

Online customer experience also includes our online marketing proposition. Simply put, the Group has not been a “player” of any note in the extremely important areas of SEM (search engine marketing) and SEO (search engine optimisation) in the past. This is something we have focused on and have developed our capabilities in these important areas.

RETURNS TO OUR SHAREHOLDERS

As has been the case in prior years we continue to maintain a high dividend payout ratio. For the past seven years we have maintained a dividend payout ratio in excess of 90% of profits together with a Dividend Reinvestment Plan (currently suspended in accordance with terms of merger with Tabcorp). Total shareholder return for FY16 from a combination of dividends and share price growth has been 8.0%. A strong balance sheet gives us further opportunities to create value for shareholders.

Analyst Information

The below is a list of analysts who cover our sector in general and Tatts Group in particular.

ANALYST NAME COMPANY
James Lawrence Morgans
Rohan Sundram CITI
Sacha Krien CLSA
Larry Gandler Credit Suisse
Mark Wilson Deutsche Bank
Adam Alexander Goldman Sachs
Peter Drew Hunter Green
Donald Carducci JP Morgan
Sam Dobson Macquarie
Vacant Merrill Lynch
Nick Markiewicz Morgan Stanley
Andrew Orbach Taylor Collison
Matthew Ryan UBS

Contact Giovanni Rizzo should you have any questions regarding the work undertaken by these analysts.

Tatts Bonds

On 29 June 2012, Tatts Group announced that the offer of Tatts Bonds had successfully raised $194.7 million. Through the offer 1,946,642 Tatts Bonds were issued at a price of $100 each. Tatts Bonds are seven year debt securities which commenced trading on the Australian Securities Exchange (ASX) on a normal settlement basis on 4 July 2012, under the listing code TTSHA.

Copies of the Tatts Bonds Prospectus dated 6 June 2012, The Trust Deed and Terms applicable to the Tatts Bonds are available via the links provided below.

Holders of Tatts Bonds are entitled to received quarterly interest payments, payable quarterly in arrears. The interest rate is equal to the sum of the 90 day bank bill rate plus a fixed margin of 3.10%, and is calculated on the first business day of each quarter. Details of interest payments will be announced to ASX, and the following table updated following the calculation of the interest rate each quarter.

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Tatts Bonds Prospectus

Interest Payment Date Record Date 90 Day Bank Bill Rate Interest Rate Days in Interest Period Interest Amount per Tatts Bond
5 Jul 2017 27 Jun 2017 1.7850% 4.8850% 91 days $1.2179
  • Tatts Bonds
    Prospectus

Financial Information & Dividend History

5 Year Financial Summary

  • 5 Year
    Financial Summary

DIVIDEND PERFORMANCE AND HISTORY

FY2017 Interim Dividend

Tatts Group’s 2017 interim dividend is payable on 3 April 2017.

We announced an interim dividend of 9.5 cents per share on 16 February 2017. The interim dividend is fully franked and will be paid to owners of ordinary shares on the register at the close of business on 7 March 2017 (‘record date’). The ex-dividend date is 6 March 2017. Shares purchased on or after the ex-dividend date, do not qualify for the dividend.

The dividend payout ratio of 113.6% is consistent with the Board’s dividend policy.

The DRP for this interim dividend has been suspended.  The suspension is in accordance with clause 6.2(d) of the Merger Implementation Deed entered into between Tabcorp Holdings Limited and Tatts Group Limited on 18 October 2016. Accordingly all dividends due to you have been credited to your nominated bank account or paid by cheque.

 

Important information regarding the payment of your dividends

Tatts Group pays shareholders with registered addresses in Australia, New Zealand and the United Kingdom cash dividends by direct credit only. If you have not provided your payment instructions by the record date and you are not a full Dividend Reinvestment Plan participant, your dividend is being held on your behalf in a non-interest bearing account. We encourage you to provide and keep your payment instructions up to date with Computershare Limited (www.investorcentre.com). Payment of your dividend into your nominated bank account will be made as soon as possible after receipt of your payment instructions.

For more dividend related dates, please visit Tatts’ Investor Events Calendar.

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Dividend History

Dividend Ex-Div
Date
Record
Date
Payment
Date
Cents/
Share
Total
(A$000)
DRP Share
Price
DRP
Discount
2017
Final 1 Sep 4 Sep 3 Oct
Interim 6 Mar 7 Mar 3 Apr 9.5 139,509 Suspended Suspended
2016
Final 31 Aug 1 Sep 4 Oct 8.0 117,162  $3.77  –
Interim 26 Feb 1 Mar 31 Mar 9.5 139,130 Suspended Suspended
2015
Final 1 Sep 3 Sep 5 Oct 7.5 109,561 $3.54
Interim 27 Feb 3 Mar 2 Apr 9.0 130,118 $3.88 1.5%
2014
Final 1 Sep 3 Sep 6 Oct 5.5 78,895 $3.17 1.5%
Interim 26 Feb 4 Mar 4 Apr 8.0 113,369 $2.90 1.5%
2013
Final 29 Aug 4 Sept 7 Oct 7.5 105,203 $3.05 1.5%
Interim 27 Feb 5 Mar 5 Apr 8.0 110,908 $3.07 1.5%
2012
Final 30 Aug 5 Sept 3 Oct 12.0 163,550 $2.64 1.5%
Interim 29 Feb 6 Mar 4 Apr 11.0 147,483 $2.33 1.5%
2011
Final 1 Sep 7 Sep 5 Oct 11.00 145,056 2.10 1.5%
Interim 2 Mar 8 Mar 6 Apr 10.50 136,593 2.18 1.5%
2010
Special 4 2 Sep 7 Sep 1 Oct 11.00 141,013 2.29 1.5%
Interim 2 Mar 9 Mar 6 Apr 10.00 127,564 2.44
2009
Final 2 Sep 8 Sep 2 Oct 11.00 139,708 2.52
Interim 5 Mar 12 Mar 3 Apr 10.00 126,542 2.58
2008
Special 3 8 Sep 12 Sep 3 Oct 10.50 132,862
Interim 7 Mar 14 Mar 4 Apr 9.50 120,209
2007
Special 2 10 Sep 14 Sep 5 Oct 4.00 50,614
Final 10 Sep 14 Sep 5 Oct 10.00 126,535
Interim 1 Mar 7 Mar 30 Mar 8.00 101,228
2006
Final 6 Sep 12 Sep 26 Sep 7.50 53,008
Interim 1 6 Mar 10 Mar 5 Apr 8.75 61,842

Notes: All dividends are fully franked.

(4) Special Dividend substituting for the final dividend both in quantum and timing.
(3) Refer to ASX release dated 23 June, 2008.
(2) One-off Special Dividend paid out of the settlement of the Trustee Commission claim.
(1) The 2006 Interim Dividend related to profits for the 7-month period from 1 June 2005 to 31 December 2005.

Dividend Reinvestment Plan

The DRP for this interim dividend has been suspended. The suspension is in accordance with clause 6.2(d) of the Merger Implementation Deed entered into between Tabcorp Holdings Limited and Tatts Group Limited on 18 October 2016. Accordingly all dividends due to you have been credited to your nominated bank account.

Dividend Performance and History

  • Dividend Reinvestment
    Plan Form

    02/08/2010
  • Dividend Reinvestment
    Plan Booklet

    30/04/2014
  • Dividend Reinvestment
    Plan Terms & Conditions

    30/04/2014

Shareholder Services

Manage your shareholding online

Why not register for free on www.investorcentre.com – For real time enquiries about your shareholdings, dividends, updating your details or other administrative matters. The Investor Centre service also enables you to receive important documents, (such as the annual report), electronically and to submit voting instructions online for the AGM.

Alternatively, contact our share registry,
Computershare on the details provided below:

Computershare Investor Services Pty Ltd

117 Victoria Street, West End Queensland GPO Box 242

Or contact our Investor Relations
division directly:

Giovanni Rizzo

Head of Investor Relations

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