“The Lottery Corporation Ltd (TLC)’s financial year 2024 result was impressive, driven by a favourable year for Lotteries and strong active customer growth,” Raymond said.
“Despite lapping a record period of growth in Lotteries, we remain positive on the stock as current lottery volumes continue to perform well.
“The company mentioned that Saturday Lotto will be the next game to receive an update, which should benefit the base game divisions significantly and likely come with a price increase, offsetting some recent softness.
“Additionally, TLC reported a leverage ratio of 2.5x, below the guided range of 3-4x, and has expressed interest in renewing the Victorian licence.
“Based on our estimates, TLC is set to deliver a 4.5% free cash flow (FCF) yield and a 4% dividend yield in financial year 2025.
“The stock trades in line with its historical valuation ranges and we view it as a solid option for investors seeking stability,” he said.
Lottery Corporation Ltd (TLC)
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