SPORTS TOTO BERHAD Q3 2025 Latest Quarterly Report Analysis

Q3 FY2025: A Quarter of Impressive Growth

Sports Toto Berhad delivered a strong performance in Q3 FY2025, demonstrating significant growth in both revenue and profit compared to the same period last year. The group’s diversified business model, particularly its Number Forecast Operation (NFO) and auto retailing segments, proved to be key catalysts for this quarter’s success.

Group Financial Highlights (Q3 FY2025 vs Q3 FY2024)

The Group’s revenue increased by 12.5% to RM1,906.8 million, while profit before tax soared by 45.7% to RM147.4 million. This significant uplift was primarily driven by the robust performance of STM Lottery Sdn Bhd (“STM Lottery”) as well as improved performance from H.R. Owen.

Segmental Performance: The Growth Engines

STM Lottery Sdn Bhd (NFO Segment)

STM Lottery, the core NFO business, reported an impressive 20.8% increase in revenue compared to the corresponding quarter of the previous year, despite maintaining the same number of draws. This surge was largely attributed to an exceptional accumulation of jackpot prizes from the Supreme Toto 6/58 game, which captivated consumer interest and drove ticket sales. Coupled with a lower prize payout, STM Lottery’s pre-tax profit rose by a substantial 45.8% in Q3 FY2025.

H.R. Owen (Auto Retailing Segment)

The UK-based luxury auto retailer, H.R. Owen, also contributed positively to the Group’s performance. It recorded a 14.0% increase in revenue in its local currency, buoyed by higher sales volumes in both new and used car sectors. The introduction of the new Lotus marque to its portfolio further boosted revenue. However, when converted to Ringgit Malaysia, the revenue growth was a more modest 6.9% due to unfavourable foreign exchange effects. Nonetheless, H.R. Owen’s pre-tax profit significantly improved to RM17.9 million from RM11.3 million in the same quarter last year, aligning with its enhanced revenue.

Quarter-on-Quarter Momentum (Q3 FY2025 vs Q2 FY2025)

Comparing the current quarter with the immediate preceding quarter (Q2 FY2025), the Group also demonstrated remarkable sequential growth:

This impressive quarter-on-quarter improvement was driven by STM Lottery’s 25.1% revenue increase, partly due to an additional draw and continued strong Supreme Toto 6/58 sales. H.R. Owen also saw a significant 35.7% revenue growth and swung from a pre-tax loss of RM7.8 million in the preceding quarter to a profit of RM17.9 million, benefiting from the UK’s number plate change month.

Cumulative 9-Month Performance (FY2025 vs FY2024)

For the nine-month period ended 31 March 2025, the Group’s cumulative performance also showed healthy growth:

The Group’s revenue for the nine months grew by 3.7%, while pre-tax profit surged by 24.8%. This was largely due to STM Lottery’s 6.0% revenue growth (despite fewer draws) and 23.6% pre-tax profit increase, alongside H.R. Owen’s improved performance, which saw a reduced pre-tax loss of RM1.4 million compared to RM4.1 million previously, aided by revenue growth and lower finance costs.

Financial Health and Cash Flow Dynamics

Beyond the impressive top-line and bottom-line figures, a closer look at Sports Toto Berhad’s financial position reveals a stable foundation. As at 31 March 2025, the Net Assets Per Share stood at RM0.89, a slight increase from RM0.86 as at 30 June 2024, indicating a marginal improvement in shareholder value.

Total assets for the group were RM3,977.4 million, with total equity at RM1,252.6 million. Cash and cash equivalents stood at RM622.6 million at the end of the period. While the group generated healthy cash from operating activities (RM199.3 million for 9M FY2025), it also saw a significant increase in cash used for investing activities (RM158.9 million for 9M FY2025 compared to RM36.5 million in 9M FY2024), indicating increased capital expenditure or investments. Total borrowings as at 31 March 2025 amounted to RM1,519.0 million, a figure to keep an eye on, though overall financial health appears robust.

Navigating Risks and Charting Future Prospects

The Directors of Sports Toto Berhad maintain a cautiously optimistic outlook for the Group’s future. They anticipate the NFO business to continue its upward trajectory in per-draw sales, fueled by favourable consumer spending and sustained interest in jackpot games. The Group is confident in maintaining its market leadership position in the NFO sector.

However, the report also acknowledges certain challenges. A notable concern is the continued encroachment of illegal gaming operators, particularly in underserved areas like Kedah and Perlis, where legal NFO outlets have been closed. This competitive pressure from the black market remains a persistent threat to the NFO segment’s growth potential.

Globally, the Group faces headwinds from prevailing uncertainties, including trade protectionism and inflationary tariff impacts, which could affect its international operations, particularly H.R. Owen in the UK. Despite these challenges, the Directors are confident that the Group’s businesses will remain encouraging and maintain a positive outlook for the remaining quarter of the financial year ending 30 June 2025.

Shareholder Returns: Dividends Declared

In a move that will please shareholders, the Board has declared a third interim dividend of 2.0 sen per share for the financial year ending 30 June 2025. This dividend is payable on 18 July 2025, with an entitlement date fixed on 30 June 2025. This declaration brings the total dividend distribution for the financial period ended 31 March