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Lottery Corporation Limited
(Sydney:TLC)
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Rating:61Neutral
Price Target:
AU$5.50
▲(8.91% Upside)
Action:Reiterated
Date:08/20/26
The score is driven primarily by solid underlying financial quality and reduced balance-sheet risk, tempered by recent revenue/earnings/free-cash-flow weakening. Technical signals are notably bearish, and valuation is rich (high P/E), while the latest earnings call points to a balanced setup with strategic de-risking but meaningful FY27 headwinds from jackpot volatility and higher interest costs.
Positive Factors
Long-duration Victorian licence security
The licence extension to 2068 materially reduces renewal risk and protects TLC’s position in a regulated market. This supports long-term planning, customer continuity and investment in products and channels, while the BBB+ affirmation indicates continued credit access.
Negative Factors
Recent deterioration in growth and cash conversion
The recent decline in revenue, earnings and free cash flow weakens the cushion available for dividends, licence investment and product development. Although cash generation remains positive, reduced conversion of sales into cash could constrain flexibility if weakness persists.
Read all positive and negative factors
Positive Factors
Negative Factors
Long-duration Victorian licence security
The licence extension to 2068 materially reduces renewal risk and protects TLC’s position in a regulated market. This supports long-term planning, customer continuity and investment in products and channels, while the BBB+ affirmation indicates continued credit access.
Read all positive factors
Lottery Corporation Limited (TLC) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$11.04B
Dividend Yield3.31%
Average Volume (3M)5.44M
Price to Earnings (P/E)39.1
Beta (1Y)0.47
Revenue Growth-4.64%
EPS Growth-22.15%
CountryAU
Employees900
SectorConsumer Cyclical
Sector Strength84
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)0.13
Shares Outstanding2,225,771,700
10 Day Avg. Volume8,833,108
30 Day Avg. Volume5,443,150
Financial Highlights & Ratios
PEG Ratio-2.36
Price to Book (P/B)48.52
Price to Sales (P/S)3.61
P/FCF Ratio40.31
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$5.73Price Target Upside13.42% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)0.17
Revenue Forecast (FY)AU$3.99B
Lottery Corporation Limited Business Overview & Revenue Model
Company Description
The Lottery Corporation Limited is an Australian entity primarily involved in the lottery and keno industries. Its operations are conducted under the well-known brands The Lott and Keno. Customers can access its services both online and via an ext...
How the Company Makes Money
TLC makes money primarily from selling lottery products to customers and retaining a portion of sales after paying out prizes and mandatory amounts such as taxes, levies, and other statutory contributions required under Australian lottery regulati...
Lottery Corporation Limited Earnings Call Summary
Earnings Call Date:Aug 18, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Feb 17, 2027
Earnings Call Sentiment Neutral
The call presents a balanced picture: operational and strategic strengths (resilient revenue/EBITDA, maintained dividend, Victorian licence extension, cost discipline, base game and digital momentum) are offset by tangible near‑term headwinds (a materially weak jackpot cycle that reduced EBITDA by ~$88m, a ~6% decline in pre‑significant NPAT, one‑off charges of $58m, potential $25m Keno online loss, and higher leverage/interest costs to fund the Victorian licence). Management emphasizes execution, reinvestment in digital and retail, and a medium‑term de‑leveraging plan, but FY '27 will face higher interest expense and continued jackpot uncertainty.Positive Updates
Resilient top-line and EBITDA
Group revenue of $3.6 billion and EBITDA before significant items of $736 million (down only 1.8% year‑on‑year) demonstrating portfolio diversification and operating resilience despite weaker jackpots.
Negative Updates
Weak jackpot cycle materially reduced offers
FY '26 jackpot offers ran ~21% down versus the prior comparable period, with Powerball not reaching $100m for the first time in 5 years and Oz Lotto not reaching $50m for the first time in 9 years.
Read all updates
Q4-2026 Updates
Positive
Negative
Resilient top-line and EBITDA
Group revenue of $3.6 billion and EBITDA before significant items of $736 million (down only 1.8% year‑on‑year) demonstrating portfolio diversification and operating resilience despite weaker jackpots.
Read all positive updates
Company Guidance
On guidance, management confirmed FY‑27 operating expenditure of $305–$315 million (FY‑26 OpEx $296m) and said interest expense will rise materially after funding the Victorian licence extension (reported leverage 3.1x at 30 June 2026; adjusted leverage 4.2x including the licence; long‑run target 3–4x), with new debt expected at rates above the current average interest rate of 5.8% (net interest expense was up 4% or $5m in FY‑26). They held the full‑year dividend at $0.165 per share and will adopt a payout ratio based on NPAT pre‑significant items plus after‑tax licence amortisation from FY‑27; FY‑26 results included group revenue $3.6bn, EBITDA before significant items $736m (down 1.8%), NPAT pre‑significant items down 6%, and $58m of significant items after tax. Management flagged jackpot volatility (jackpot offers -21% vs PCP; jackpot turnover reduced EBITDA by ~$88m vs PCP; an estimated $80m adverse impact vs model expectations), noted digital share up 90 basis points, base games +5.6% (Instant Scratch‑Its ~+8%), and cautioned that exiting online Keno could impact EBITDA by ~ $25m, all while reaffirming a BBB+ rating and an intent to reinvest cost savings into digital, product and retail.Lottery Corporation Limited Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
72
Positive
Cash Flow
63
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.55B | 3.73B | 3.98B | 3.50B | 3.28B |
| Gross Profit | 2.70B | 3.73B | 3.07B | 2.74B | 2.65B |
| EBITDA | 576.60M | 763.70M | 788.90M | 608.70M | 586.80M |
| Net Income | 284.60M | 365.50M | 414.00M | 264.80M | 346.60M |
Balance Sheet | |||||
| Total Assets | 5.46B | 4.41B | 4.36B | 4.37B | 4.22B |
| Cash, Cash Equivalents and Short-Term Investments | 686.90M | 550.50M | 504.00M | 841.30M | 640.50M |
| Total Debt | 2.50B | 2.50B | 2.48B | 2.55B | 2.49B |
| Total Liabilities | 5.19B | 4.08B | 4.00B | 4.11B | 3.97B |
| Stockholders Equity | 264.10M | 321.80M | 363.10M | 264.80M | 242.80M |
Cash Flow | |||||
| Free Cash Flow | 317.90M | 470.10M | 424.30M | 376.90M | 600.00M |
| Operating Cash Flow | 421.90M | 541.70M | 492.80M | 456.50M | 624.40M |
| Investing Cash Flow | -120.60M | -96.00M | -87.60M | -121.20M | -63.50M |
| Financing Cash Flow | -274.90M | -414.70M | -393.80M | -217.00M | -456.60M |
Lottery Corporation Limited Technical Analysis
Negative
5.05
Price Trends
5.34
Negative
5.33
Negative
5.25
Negative
Market Momentum
-0.11
Positive
33.33
Neutral
16.09
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:TLC, the sentiment is Negative. The current price of 5.05 is below the 20-day moving average (MA) of 5.16, below the 50-day MA of 5.34, and below the 200-day MA of 5.25, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 33.33 is Neutral, neither overbought nor oversold. The STOCH value of 16.09 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:TLC.
Lottery Corporation Limited Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | AU$35.91B | 25.40 | 23.15% | 1.63% | -1.22% | 10.79% | |
70 Neutral | AU$448.53M | 12.65 | 26.69% | 4.84% | 33.23% | -14.58% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | AU$11.04B | 39.05 | 94.29% | 2.99% | -4.64% | -22.15% | |
61 Neutral | AU$9.71B | 17.81 | 113.60% | ― | 0.17% | -21.07% | |
57 Neutral | AU$2.02B | 43.32 | 3.66% | 2.82% | 0.13% | 26.25% | |
45 Neutral | AU$829.41M | -2.34 | -64.40% | ― | -9.32% | 59.25% |
* Consumer Cyclical Sector Average
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Lottery Corporation Limited Corporate Events
Lottery Corporation Announces Board Succession as Harry Boon Retires
Aug 19, 2026
The Lottery Corporation has announced that Non-executive Director Harry Boon will retire from its board at the conclusion of the 2026 Annual General Meeting in October, ending a tenure that began with the company’s ASX listing in June 2022 a...
The Lottery Corporation Publishes 2026 Corporate Governance Statement and Appendix 4G
Aug 18, 2026
The Lottery Corporation Limited has released its 2026 Corporate Governance Statement, outlining how it applies key corporate governance principles and recommendations as an ASX-listed lottery operator. The document details governance frameworks de...
The Lottery Corporation to Present Full-Year 2026 Results to Investors
Aug 18, 2026
The Lottery Corporation Limited, a leading Australian lottery and gaming operator, offers regulated lottery and related wagering products through retail and online channels to a broad consumer base. Its business model emphasizes recurring revenue,...
Lottery Corporation posts resilient FY26 result, secures 40-year Victorian licence extension
Aug 18, 2026
The Lottery Corporation reported full-year results for FY26 showing resilient underlying performance despite an exceptionally unfavourable period for Powerball and Oz Lotto jackpots, described as a roughly one-in-45-year outcome. The company highl...
Lottery Corporation Declares Interim Dividend for June 2026 Half
Aug 18, 2026
The Lottery Corporation Limited has declared an interim dividend of AUD 0.085 per ordinary share for the six-month period ended 30 June 2026, reinforcing its practice of returning cash to shareholders from its lottery operations. The dividend will...
Lottery Corporation Posts Lower Profit but Maintains Fully Franked Dividend
Aug 18, 2026
The Lottery Corporation Limited reported revenue of $3,576.6 million for the year ended 30 June 2026, a 3% decline from the prior year. Statutory net profit attributable to members fell 22% to $284.6 million, while profit before significant items ...
Lottery Corporation cancels 385,937 lapsed performance rights
Jul 3, 2026
The Lottery Corporation Limited has notified the market of the lapse of 385,937 performance rights under its ASX-listed securities, after conditions attached to those rights were not met or became incapable of being satisfied. The cessation of the...
The Lottery Corporation Unveils Investor Day Presentation on Growth Plans
Jun 2, 2026
The Lottery Corporation Limited has released its Investor Day presentation and will webcast the event live for investors and analysts, with an archived version to be made available on its website later today. The presentation, authorised by the Ma...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.