Tattersall's (TTS) Update

Submitted by Craig Strzelecki on 29 March, 2007 - 18:57

Tattersall's (TTS) have a retained shares recommendation of Hold / Medium Risk and a lifted price target of $4.89 per share from analyst Citigroup Investment Research. The analyst recently met with a number of industry participants in the UK, and they believe the addressable market for consolidation in Adult Gaming Centres (AGCs) will be larger than originally forecast. As a result, they've increased number of sites likely to be acquired by the TTS/MBL JV. Impact is to increase core eps by 5.7% to 26.6 cps in FY08e and 10.4% in 31cps FY09e, with no change to FY07e forecasts. New Act limits the number of jackpot machines to 4 per site. Talarius exposure is limited, as average is 4.3 per site, but the overall industry average of jackpot machines is currently 10 per site. The analyst have seen centres with well in excess of this number. Lower limits will facilitate industry shake-out, as operations will be less profitable for those who have to remove machines. New restrictions on certain venues, plus less favourable machine limits, will likely see these venues convert to Adult Gaming Centres, increasing the addressable market for consolidation. New compliance regime effective from September 2007 under the new Gaming Act will work in the favour of the consolidators in the market, as it will impose a greater administrative burden on all AGC's. Many smaller AGC owners may elect to sell and exit than to attempt to comply.

Tattersall's Limited is listed on the Australian Stock Exchange (ASX) under stock code TTS. You can view their investor website here. TTS was listed on the ASX on 7 July, 2005. Harry Boon is the chairman for Tattersalls and the managing director is Dick McIlwain. The company is involved in the operation of gaming, lotteries and wagering businesses. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade TTS. Check your charts and good luck with your share trading!

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