The Lottery Corporation Limited (ASX: TLC) share price has commenced trade on the ASX boards on Tuesday.
In afternoon trade, the lotteries company's shares are fetching $4.60.
The Lottery Corporation share price debut
The Lottery Corporation share price debuted on the ASX boards this morning following its successful demerger from gaming giant Tabcorp Holdings Limited (ASX: TAH).
Though, whether you can call Tabcorp a gaming giant anymore remains to be seen. Its shares are down a massive 81% to 99 cents at the time of writing, with the balance of power seemingly shifting to the ASX 200's newest member.
Based on the current Lottery Corporation share price, it has a market capitalisation of approximately $10.24 billion, whereas new Tabcorp is valued at $2.2 billion.
What is The Lottery Corporation?
The Lottery Corporation is the new home of Tabcorp's lotteries and Keno businesses.
Management highlights that the Lottery Corporation is an omni-channel business with a portfolio of high profile, recognised brands and games, strong digital growth and a retail footprint across ~7,000 retail outlets/venues. This makes it one of the largest in the country.
These businesses continued their solid growth in FY 2021, generating a 14.4% increase in EBITDA. This meant that its Lotteries and Keno businesses contributed 55% or $611 million of Tabcorp's total EBITDA during the 12 months.
Pleasingly, since then, these businesses have continued their positive form. For example, in February, Tabcorp reported a 15.1% increase in Lotteries and Keno EBITDA to $358 million. Whereas the rest of the business reported earnings declines, which led to group EBITDA falling 5.5% over the prior corresponding period to $529 million.
The good news is that management still sees plenty of growth ahead. It notes that the business offers infrastructure-like asset qualities, with low capital intensity and upside potential from digital growth.
It could also prove to be a good option for income investors. Management highlights that the company will aim to pay out 70% to 90% of net profit after tax excluding significant items.
