I always wonder about Morningstar analysts (broad brush). Maybe it is just a value tilt that hasn't worked for years or some other reason they always seem so far off on value - or how share prices perform - XRO etc as well.

JIN they're still at $13.10. Get a bit overheated at the moment but still.

First glance, hard to fault the results given the weak jackpot run in the half as well which impacted Australian lottery TTV (as we know this half has started very well).

Decent $31M in FCF or $62M annualized versus EV of about $930M - a current FCF yield of about 6.7% before what I expect the second half will be stronger. Nice dividend increase equating to about a 5% grossed up yield.

One more year of the TLC step up in fee.

After an unusually low number of jackpots last 6 months - a $150M Powerball next week should give a kick along. Same for TLC.

Not that Morningstar Australian analysts have seen to be very good analysts over the years they have initiated with a fair value of $12.90 for JIN.

Results slab bang in the middle of my expectations. Seems to be a lot of volume going on, up 3% to down 2% now.

Strong revenue growth but the margin hit from the step up in the lottery corp service fee hurt.

"Excluding the impact of acquisitions, Group TTV and Revenue increased 10.2% and 7.0% respectively with underlying EBITDA broadly flat on the pcp, reflecting an EBITDA/revenue margin of 49.8%. The underlying EBITDA margin was impacted by the step-up in the service fee paid to TLC."

My prior valuation of around $17 might be a bit ambitious with recent rate rises impacting multiples. 25x the reported EPSA (annualised) would get you to the current price. Still, I think JIN is not expensive and provides a good mix of income and growth. Will continue to hold.

Looks to be another $100M jackpot next thursday, a string after months of nothing. Not sure it'll get the same attention given Christmas and New Years.

Looking at Semrush for ozlotteries.com.au and looks like steady traffic but not great.

Obviously the Lott dominates. Hopefully we get some good news on JIN partnering further with lotterywest.com

MQG comparison updated:

Looks like another $50M Powerball this Thursday too.

Following on from @Strawman some notes from the transcript for those that can't access it. I left a few out like most of the questions from the Australian Shareholders Association were repetitive and already answered...

Quesiton on change in payout ratio - prioritising acquisitons so payout ratio and dividend may be cut but no lower than 65% of NPATA.

Jumbo not available in Queensland, hard with the State Government 'brick wall' so will prioritise rest of Australian and international given the opportunity.

Quenstion on buyback given acquisitions - only $2M complete of $25M, assessed daily and if an acquisition comes up funds will be directed to that but currently very 'cash-rich.' They did the buyback mainly due to the 'marker turned quite dramatically'

Question on metrics of active players instead of dollar per active player - they could use man metrics cost per player acquisition, average spend but 'We really don't get that many players who come in active and then really don't do much. They're active or they're not.'..... 'the fact that it takes like in Australia only 5 months to get our money back on our advertising is probably one of the best in the industry, demonstrates that we've got quite a tight grip on our marketing expenses, which is one area that things can get away from you very quickly certain with other businesses.'

Follow up on above - '... when we get these big jackpots like $160 million come in, we get a flood of new players come in. We had almost 60,000 come in just in the last month alone. And then we go into the activation. We really want those players to keep on playing. We don't necessarily want them to spend large amounts of money in 1 hit, but we do want them to become regular players. And that's where our software and our teams are very good at giving them every reason to do that.'

Question on growth and international expansion 'as a very small shareholder, more important thing to me is my returns. So -- and why are you focusing on getting bigger, but not necessarily better for the shareholder, better for the Board and better for the executives, always, in pays and returns. But how are you rewarding the shareholders.' - Rewarding shareholders is very key.... If we just stayed as an Australian-only business, it introduces a lot of risks. There's -- we take all our money from just one area, and we kind of like have all our eggs in 1 basket. And so long-term thinking that, that could be quite a risk for shareholders. Going international is not easy. There's a lot more jurisdictions, laws to think about. So we don't do it just for the heck of it. We do it because there's growth opportunities. And I keep on coming back to this one important stat that if you look at the global lottery industry, the percentage of lottery tickets that are sold online is still probably only around about 9% or 10%, very, very low. Here in Australia, we're at 38%, 39%. So we're lucky to be in a country where we're quite advanced, and we can take our advanced knowledge internationally. So most of the world out there is not yet on the Internet. So if I really want to plot a course for Jumbo over the next 20, 30 years for sustained growth, we really have to look internationally. And rather than rush at it like a bull at a gate and buy everything inside I think we've taken a very measured approach, learned things along the way. And every time we learn things, we improve it, we evolve. We put in teams so that we can manage these businesses at different regions, different time zones. Yes, it's not easy. But if we do want to get this long-term growth, it's very much what we have to do.

Question on problem gambling - But your point is a good one in that in the lottery side of the industry, if you've got casinos over on this end, you've got sports betting in the center, that's very risky. Lotteries is very much on this side, which is low risk. And that's a good place to be.... Exactly. Lotteries are well known in Australia and around the world as very low, low, low levels of problem gambling because of the nature of the game because of the regulations in place. And as I travel around the world and I visit other countries, it's the same sort of thing. It's all about maintaining that there is no player harm, but yet allowing the industry to grow at a slower rate but a much more sustained rate. I mean most people when they look at our graphs and they see that graph just ticking up each time year after year, they're very envious of that. We don't have the big ups and downs. We have a few little ones. But that's just specific to lotteries. And in my view, that's a great place to be.

Quesiton on where there is 'data' insurance meaning cyber - ... it was actually a topic on the agenda of our Board meeting this morning, we held before the AGM and CFO provided us an update in relation to our cyber insurance. You can imagine it's a very hot topic for all boards. But yes, we do, and we are reviewing the nature of it, the extent of it and other practices around that.... It's only going to get more expensive as the downside of that review..

Question on increasing board as 'does not seem enough for a growign business' - As we elaborated in the resolution where we requested an increased aggregate fee, we are looking around for another nonexecutive director who will probably be an international -- with international lottery experience and M&A experience. We appreciate the 3 nonexecutive directors plus Mike is a bit skinny, and to be honest, there's actually quite a bit of heavy lifting goes on with Sharon chairing the People and Culture Committee. Giovanni, chairing the Audit and Risk Committee and myself chairing the Board. There's not many meetings, we don't all attend. So we appreciate there's quite a bit of heavy lifting there. And to answer your question specifically, yes, we are on the lookout for another NED.

Should be a relativley good read through into JIN - benefit from the $160M powerball. Hopefully JIN captured a fair share of that 2% increase in digital share.

Update 21/10 - How quickly it changes, now on track for the largest jackpot ever - Powerball Rockets To Record-breaking $160 Million Jackpot! | The Lott JIN should see a decent jump in sales.

14/10 - And in good news for shareholders we have no winner and a $100M draw next week - Powerball Offers $100 Million For The First Time In 2022! | The Lott

JIN and TLC really need a few jackpots soon otherwise there will be some near term analyst earnings downgrades. I believe this is what is weighing on the stock the most (it does face headwinds from the exposure in the UK and the delay in the latest acquisiton settling as well ).

Powerball is the largest game and you can see when the largest jackpots are on the google trend spikes below (the 2022 was the $126M in Feb) - and the lack of much interest so far this FY. This can change quickly and the current jackpot this Thursday is $50M - as a shareholder i have my fingers crossed no one wins so hopefully we can get to a near $100M jackpot before December 31st. On the other hand the share price weakness does mean the current on market buyback is going further as the jackpot sequence will eventually normalise.

Ozlotto (second biggest) has held up okay.

I like the business but no idea how Jumbo makes it to Mogan Stanly's list of a wide moat business - think you need to put The Lottery Corp on it if either of them.

Trading Update

Looks like a miss on analyst consensus from TIKR - though higher margin.

There was some postive broker commentary yesterday.

Share price has come off a bit (with everything) so will be interesting to see the SP reaciton - pointing to a decent rally on CommSec.