Jefferies cautious on costs for Australia's Lottery Corp after licence extension

Lottery

05/05/2026 20:15

** Jefferies says Lottery Corporation's TLC.AX 40-year extension of its Victoria state Lottery licence drives downgrades for the stock on higher non-interest costs and amortisation

** Lottery operator on Tuesday said it has secured a 40-year extension of its Victorian public lottery licence after exclusive talks, agreeing to pay the state an upfront premium of A$1.15 billion ($826.62 million)

** Extension pushes the Victoria's term to June 2068, cementing co's exclusivity in the state and aligning it with its other long‑dated licences

** Jefferies trims price target by 3% to A$5.6, maintains "hold" call

** Brokerage says the longer licence term and thus higher upfront payment sees a more material drag of non-interest costs (NIC)

** Adds co's updated dividend framework should keep leverage within range, but higher NIC drag on cashflow sees limited improvement in dividend yield

** Lottery Corp up 8% so far this year, as of last close

($1 = 1.3912 Australian dollars)

 (Reporting by Nikita Maria Jino in Bengaluru)

 ((Nikita.Jino@thomsonreuters.com;))