Sports Toto Berhad Q3 2026: Significant Profit Decline Amid Challenging Market Conditions

Key Highlights for Investors

• Sharp Decline in Profit: Sports Toto Berhad recorded a 44.8% drop in profit for Q3 2026 compared to the same period last year. Profit for the quarter was RM59.3 million, down from RM107.4 million. For the nine-month period, profit fell 36.7% to RM124.5 million, compared to RM196.7 million previously.
• Revenue Under Pressure: Group revenue for Q3 2026 was RM1.52 billion, a significant 20.5% decrease from RM1.91 billion in Q3 2025. The nine-month cumulative revenue dropped 7.1% year-on-year to RM4.49 billion.
• Dividend Increase: Despite the weaker performance, the Board declared a third interim dividend of 3.0 sen per share, up from 2.0 sen per share in the previous year for the same period. The total dividend distribution for the period reached approximately RM105.58 million.

Comprehensive Financial Performance

Condensed Consolidated Statement of Profit or Loss

• Operating Profit: Dropped 39.9% in Q3 to RM100.0 million (Q3 2025: RM166.6 million).
• Profit Before Tax: Down 40.8% in Q3 to RM87.3 million.
• Taxation: The Group incurred a tax expense of RM27.96 million for the quarter and RM82.23 million for the nine months. The higher effective tax rate was due to non-deductible expenses and profits in certain subsidiaries not relieved by losses in other companies within the Group.
• Earnings Per Share: Basic EPS dropped to 4.47 sen for Q3 2026 (Q3 2025: 7.91 sen), and 9.52 sen for the nine months (previously 14.62 sen).

Segmental Breakdown: What’s Driving the Numbers?

• Core Business (Toto Betting): Revenue fell sharply by 20.5% in the quarter, largely attributed to fewer draws (41 vs 42) and a lack of major carryover jackpots compared to last year. The prior year benefited from a high jackpot accumulation in the Supreme Toto 6/58 game.
• H.R. Owen (Auto Retail): Revenue dropped 17.8% (or 21.6% in RM terms due to FX losses) with a significant profit decline — pre-tax profit fell to just RM0.3 million from RM17.9 million last year. The auto division was hit by lower new and used car sales, longer product cycles, transition gaps between model launches, and increased employment costs due to new UK labour laws.
• Motor Dealership Segment: Revenue for the nine months was RM2.17 billion, but the segment posted a loss before tax of RM24.7 million, compared to a smaller loss of RM1.4 million previously.

Balance Sheet & Cash Flow Trends

• Total Assets: The Group’s total assets declined to RM3.68 billion as at 31 March 2026 (from RM4.05 billion as at 30 June 2025).
• Net Assets Per Share: Fell to RM0.83 from RM0.88.
• Treasury Shares: In the period, the Group bought back 15.54 million shares at an average RM1.38 per share, raising its treasury shareholding to 33.38 million shares (costing RM48.89 million). No shares were cancelled or resold.
• Cash Flow: The Group’s net cash from operating activities was RM149.3 million (down from RM198.0 million). Net cash used in investing activities was RM52.0 million and net cash used in financing activities amounted to RM235.7 million, resulting in a net decrease in cash and cash equivalents to RM589.7 million.
• Borrowings: Total borrowings stood at RM1.41 billion, including both long-term and short-term bank facilities in Ringgit Malaysia, Philippine Peso, and British Pound. Vehicle stocking loans for H.R. Owen alone amounted to RM387.6 million.

Dividends & Capital Management

• The company maintained its dividend policy with four dividend payments so far, including a higher third interim dividend. However, the payout ratio is under pressure given the drop in profits.
• Shareholders should note the ongoing share buyback program, which may support the share price but also impacts cash reserves.

Operational and Strategic Updates

• No significant M&A activities; two small UK subsidiaries under H.R. Owen were dissolved.
• No material litigation or contingent liabilities reported.
• No profit forecast or profit guarantee was issued for the period.

Forward Guidance & Outlook

• The Board remains cautiously optimistic, expecting business to remain stable and resilient despite ongoing economic and geopolitical uncertainties. They expect the NFO business to grow sustainably, driven by the popularity of Jackpot and Digit games and remain confident of maintaining a leading market share. However, the auto retail segment faces continued headwinds from weak luxury spending, longer car model cycles, and higher costs in the UK.

Potential Share Price Sensitive Information

• Major drop in profits and revenue — this is likely to weigh on investor sentiment and could move the share price lower.
• Increased dividend payout despite weaker earnings — may attract yield-focused investors but raises questions about the sustainability of future payouts.
• Large ongoing share buybacks — this may provide some support to the share price in the short term.
• Rising costs in the auto segment and foreign exchange losses — particularly relevant for those tracking overseas exposure and regulatory risk.

Conclusion

Sports Toto Berhad is facing a challenging environment, with substantial declines in profits and revenue, especially in its core gaming and auto retail segments. Management’s cautious optimism for the future is underpinned by stable NFO demand and aggressive capital management, but investors should be alert to the ongoing risks in the UK auto market, further regulatory changes, and the company’s ability to sustain dividends at current levels.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a licensed financial advisor before making investment decisions.

Laporan Kewangan Suku Ketiga 2026 Sports Toto Berhad: Penurunan Untung Ketara dalam Keadaan Pasaran Mencabar

Perkara Penting Untuk Pelabur

• Penyusutan Untung Secara Mendadak: Untung suku ketiga menurun 44.8% ke RM59.3 juta (berbanding RM107.4 juta tahun lalu). Untuk tempoh sembilan bulan, untung jatuh 36.7% ke RM124.5 juta.
• Hasil Berkurang: Hasil kumpulan untuk S3 2026 ialah RM1.52 bilion, turun 20.5%. Untuk sembilan bulan, hasil turun 7.1% ke RM4.49 bilion.
• Dividen Ditingkatkan: Lembaga mengumumkan dividen interim ketiga 3.0 sen sesaham, meningkat daripada 2.0 sen tahun lalu walaupun prestasi lebih lemah. Jumlah agihan dividen untuk tempoh ini mencecah RM105.58 juta.

Prestasi Kewangan Secara Terperinci

• Untung Operasi: Merosot 39.9% ke RM100.0 juta.
• Untung Sebelum Cukai: Merosot 40.8% ke RM87.3 juta.
• Cukai: Beban cukai tinggi disebabkan perbelanjaan tidak boleh ditolak dan keuntungan anak syarikat tertentu tidak boleh ditampung oleh kerugian syarikat lain dalam kumpulan.
• Pendapatan Sesaham: EPS asas turun ke 4.47 sen suku ini (7.91 sen tahun lalu).

Analisis Segmen Utama

• Perniagaan Teras (Pertaruhan Toto): Hasil jatuh 20.5% akibat kurang cabutan dan ketiadaan jackpot besar. Suku tahun lalu mendapat manfaat dari jackpot Supreme Toto 6/58 yang tinggi.
• H.R. Owen (Automotif UK): Hasil jatuh 17.8% (atau 21.6% dalam RM) dengan untung sebelum cukai hanya RM0.3 juta (RM17.9 juta tahun lalu). Jualan kereta baharu dan terpakai lemah, kitaran produk panjang, dan kos pekerja meningkat akibat undang-undang buruh UK baru.

Neraca & Aliran Tunai

• Aset Keseluruhan: Menurun ke RM3.68 bilion (dari RM4.05 bilion).
• Aset Bersih Sesaham: Menurun ke RM0.83.
• Saham Perbendaharaan: Kumpulan membeli balik 15.54 juta saham pada purata RM1.38 sesaham. Pegangan saham perbendaharaan kini 33.38 juta saham.
• Aliran Tunai: Tunai bersih dari operasi RM149.3 juta, pelaburan -RM52.0 juta, pembiayaan -RM235.7 juta. Tunai akhir tempoh RM589.7 juta.
• Pinjaman: Jumlah pinjaman RM1.41 bilion, termasuk kemudahan bank pelbagai mata wang.

Dividen & Pengurusan Modal

• Pembayaran dividen diteruskan walaupun untung menurun, namun tekanan terhadap kadar pembayaran semakin ketara.
• Pembelian balik saham aktif berpotensi menyokong harga saham dalam jangka pendek.

Kemas Kini Operasi & Strategik

• Tiada aktiviti M&A besar; dua anak syarikat UK kecil dibubarkan.
• Tiada litigasi material atau liabiliti kontingen dilaporkan.
• Tiada ramalan untung dikeluarkan untuk tempoh ini.

Panduan & Prospek

• Lembaga kekal optimis berhati-hati, menjangka perniagaan kekal stabil. Perniagaan NFO dijangka berkembang secara mampan. Segmen automotif masih berdepan tekanan akibat kelembapan perbelanjaan mewah dan kos pekerja UK yang tinggi.

Maklumat Sensitif Harga Saham

• Penurunan ketara untung dan hasil — berpotensi memberi tekanan kepada harga saham.
• Peningkatan dividen walaupun untung merosot — mungkin menarik pelabur berorientasi hasil, tetapi kelestarian pembayaran masa depan menjadi persoalan.
• Pembelian balik saham besar-besaran — boleh menyokong harga saham dalam jangka pendek.
• Kos operasi automotif dan kerugian tukaran asing — relevan untuk pelabur yang menjejak pendedahan luar negara dan risiko peraturan.

Kesimpulan

Sports Toto Berhad berdepan cabaran besar dengan penurunan untung dan hasil yang ketara. Permintaan NFO kekal stabil, tetapi risiko dalam segmen automotif dan keupayaan mengekalkan dividen pada tahap semasa perlu dipantau dengan teliti oleh pelabur.

Penafian

Laporan ini hanya untuk tujuan maklumat dan bukan nasihat pelaburan. Sila dapatkan nasihat berlesen sebelum membuat keputusan pelaburan.

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