Monday 27 February 2012

Multi-Purpose - Ticket sales expected to recover in FY12F BUY


• Maintain BUY on Multi-Purpose Holdings Bhd (MPHB), with a downward revised RNAV-based fair value of RM3.60/share (vs. RM3.70/share previously). We havereduced our assumption of ticket sales per draw growth from 4% to 2% for FY12F. 

• We remain positive on the group as we believe that the fall in ticket sales has bottomed. 

• MPHB’s FY11 net profit (including profits from discontinued operations but excluding gain on disposal of property) was within our expectation but fell 10% short of consensus. Included in the group’s net profit was a RM199.6mil gain on disposal of Menara Multi-Purpose.

• All of MPHB’s core divisions reported improved earnings. In spite of a decline in revenue, pre-tax profit of the gaming division rose 3.7% YoY to RM395.7mil in FY11. 

• This was due to a lower prize payout in FY11. Prize payout of about 66.3% in FY11 was 0.8 of a percentage point lower than the payout of 67.1% in FY10.  

• Revenue of the NFO division shrank 3.4% YoY to RM3.2bil in FY11. Number of draws amounted to 177 in FY11 compared with 175 in FY10. On a per draw basis, ticket sales declined 4.5% from RM20.5mil in FY10 to RM19.6mil in FY11.

• We attribute the slide in ticket sales to competition from Berjaya Sports Toto’s 4D jackpot, which was launched in June 2011 and the 6/58 lotto game, which saw a run-up in the first prize winnings to RM57mil.

• Among all of MPHB’s non-gaming divisions, the bestperforming was the insurance division, which recorded a 6.9% YoY increase in pre-tax profit in FY11. EBIT of the insurance division was RM63.1mil in FY11 versus RM59.1mil in FY10.

• MPHB has declared a final gross DPS of 5 sen for FY11. This, coupled with interim gross DPS of 10 sen, brings total gross DPS to 15 sen (FY10: 9 sen), which implies a yield of 5.4%. 

• We believe that MPHB would be using the bulk of the RM375mil proceeds from the disposal of its building to pare down borrowings. Gross borrowings stood at RM2.5bil as at end-FY11 (FY10: RM2.2bil).

Source: AmeSecurities

No comments:

Post a Comment