Higher earnings from lotteries have helped gambling firm Tatts Group lift its net profit for the first half of the 2011/12 financial year by 11.3 per cent.
And the company says it is encouraged by the outlook for the rest of the financial year.
Tatts on Thursday reported a net profit of $166.88 million for the half year to December 31, up from $149.9 million in the prior corresponding period.
"The outlook for the second half of the current financial year is encouraging," the company said.
"Nothing we can see suggests that our first half performance is not sustainable into the second half, largely because of our confidence in the foundations laid for each of the businesses over the past two years.
"Additionally, the results for the second half of the previous financial year were affected by two very significant weather events in Queensland during January."
However, Tatts said there would be some one-off restructuring costs associated with the replacement of a third-party lottery system in NSW with the Tatts system and the integration of Tote Tasmania during the second half.
Tatts said the costs would be partly offset by the anticipated earnings from Tote Tasmania.
Tatts announced in December 2011 that it had agreed to acquire the Tasmania TAB (Tote Tasmania) for $103 million. The transaction is expected to be completed next month.
Tatts said its first-half profit rise was partly driven by a strong performance by its lotteries business, which was underpinned by strong growth in Saturday lotto sales and an unprecedented jackpot roll in NSW.
Tatts said the previously announced sale of SA Lotteries by the South Australian government was expected to be concluded late in 2012 or early 2013.
"It presents Tatts with an opportunity to further develop its lottery business within Australia," Tatts said.
Tatts' wagering business, TattsBet, also increased its revenue and earnings, boosted by growth in fixed-odds betting.
Tote Tasmania would begin to contribute to the financial results of TattsBet from the last quarter of the 2012 financial year.
In the Tatts Pokies business, revenue and earnings also lifted as the division benefited from reduced depreciation arising from the forward sale of poker machines to venues.
In August 2012, the licences of Tatts and competitor Tabcorp to operate poker machines in Victoria ends, and venue-operators such as pubs and clubs will assume responsibility for the ownership and operation of gaming machines.
Tatts' first-half revenue from continuing operations lifted to $1.97 million from $1.89 million.
Tatts declared a fully-franked interim dividend of 11 cents per share, up 4.8 per cent from 10.5 cents one year ago.
Shares in Tatts were three cents higher at $2.52 at 1347 AEDT on Thursday.
