# The Lottery (TLC.AU)

Canonical: https://gigainvestors.com/s/TLC.AU

Analysis as of: 2026-10-16T07:36:20.674Z. Financial observations: FY2019–FY2026.

Listing currency: AUD. Reporting currency: AUD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: AUD 5.27 per share; close as of 2026-10-15.

Estimated value: low AUD 2.07 per share, central AUD 2.32 per share, high AUD 2.65 per share. Buy at or below the central value AUD 2.32 per share. Valuation as of 2026-10-16T07:36:20.674Z; scenarios are not confidence intervals.

Expected annual return: 5.8% at the stated quote. About 5.8% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; AU 10-year bond 5.2% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 8 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.05×

Chart: Operating margin; fiscal year observations.

- FY2019: 0.15×

- FY2020: 0.16×

- FY2021: 0.16×

- FY2022: 0.17×

- FY2023: 0.17×

- FY2024: 0.18×

- FY2025: 0.17×

- FY2026: 0.16×

### moat: fail

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- Recent gross margin fell 4.5pp below the typical margin (limit 4pp)

- ROIC, median of available years: >100%

- ROIC, second-lowest year: 14.6%

- Typical minus recent gross margin: 4.5 pp

- Typical gross margin (annual median): 80.4%

- Recent gross margin (lower of latest and 3-year median): 75.9%

- Years with nonpositive capital: 3

- Capital spending / revenue: 1.2%

- ROIC including acquisitions, ten-year median: 16.3%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2021: >100%

- FY2022: >100%

- FY2023: 14.6%

- FY2024: >100%

- FY2025: >100%

- FY2026: 14.3%

### economics: pass

- Owner earnings / net income, 5-yr: 1.03×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: AUD 1.7B

- Net income, five-year total: AUD 1.7B

- Working capital / revenue, annual change: -4.5 pp

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.02×

- FY2023: 1.00×

- FY2024: 1.05×

- FY2025: 1.05×

- FY2026: 0.99×

### management: na

### accounting: pass

- Sloan accruals: -2.5%

- Receivables to sales index (DSRI): 1.16×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.48×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 14.99×

Chart: Sloan accruals; fiscal year observations.

- FY2021: 3.3%

- FY2022: -6.6%

- FY2023: -4.4%

- FY2024: -1.8%

- FY2025: -4.0%

- FY2026: -2.5%

## Holders

## Price story

Price needs cash profits to grow 12.2% a year for ten years · sales -4.6%

Story as of 2026-10-16T10:00:07.246Z; price observation 2026-10-15.

Price needs cash profits to grow 12.2% a year for ten years

### Sales · FY2025–2026

sales -4.6%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2019: AUD 2.9B 

- FY2020: AUD 2.9B 

- FY2021: AUD 3.0B 

- FY2022: AUD 3.3B 

- FY2023: AUD 3.5B 

- FY2024: AUD 4.0B 

- FY2025: AUD 3.7B 

- FY2026: AUD 3.6B 

### Gross margin · FY2026

gross margin 75.9%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2019: 91.7% 

- FY2020: 92.2% 

- FY2021: 79.9% 

- FY2022: 80.8% 

- FY2023: 78.3% 

- FY2024: 77.1% 

- FY2026: 75.9% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in gambling; annual sales are AUD 3.6 billion.

- Source: https://eodhd.com/api/fundamentals/TLC.AU.json#2026-06-30 (filed 2026-10-16T07:36:20.674Z); FY2026: revenue 3554400000; grossProfit 2698100000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 75.9% to 100% during 2024–26; it earns over 100% on its capital.

- Source: https://eodhd.com/api/fundamentals/TLC.AU.json#2024-06-30 (filed 2026-10-16T07:36:20.674Z); FY2024: grossProfit / revenue = 77.1%.

- Source: https://eodhd.com/api/fundamentals/TLC.AU.json#2025-06-30 (filed 2026-10-16T07:36:20.674Z); FY2025: grossProfit / revenue = 100%.

- Source: https://eodhd.com/api/fundamentals/TLC.AU.json#2026-06-30 (filed 2026-10-16T07:36:20.674Z); FY2026: grossProfit / revenue = 75.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:20.674Z); 8-year return on capital observations [[2021,1.286075089476726],[2022,83.9064999222704],[2023,0.14610598826234747],[2024,2.0503285019950708],[2025,2.2599664313866534],[2026,0.1428630583518309]]; median 1.6682017957358983. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 7 of 7 years; bought back AUD 9.1 million of shares.

- Source: https://eodhd.com/api/fundamentals/TLC.AU.json#2019-06-30 (filed 2026-10-16T07:36:20.674Z); FY2019: growth capex 0; upkeep 0; owner earnings 500000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/TLC.AU.json#2020-06-30 (filed 2026-10-16T07:36:20.674Z); FY2020: growth capex 0; upkeep 21200000; owner earnings 287700000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/TLC.AU.json#2021-06-30 (filed 2026-10-16T07:36:20.674Z); FY2021: growth capex 0; upkeep 21200000; owner earnings 424000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/TLC.AU.json#2022-06-30 (filed 2026-10-16T07:36:20.674Z); FY2022: growth capex 0; upkeep 24400000; owner earnings 352580000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/TLC.AU.json#2023-06-30 (filed 2026-10-16T07:36:20.674Z); FY2023: growth capex 0; upkeep 79600000; owner earnings 265520000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/TLC.AU.json#2024-06-30 (filed 2026-10-16T07:36:20.674Z); FY2024: growth capex 0; upkeep 68500000; owner earnings 436080000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/TLC.AU.json#2025-06-30 (filed 2026-10-16T07:36:20.674Z); FY2025: growth capex 0; upkeep 71600000; owner earnings 382980000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/TLC.AU.json#2026-06-30 (filed 2026-10-16T07:36:20.674Z); FY2026: growth capex 0; upkeep 104000000; owner earnings 280940000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:20.674Z); Dividend observations: [[2020,174800000],[2021,174800000],[2022,197100000],[2023,174800000],[2024,270000000],[2025,340000000],[2026,367300000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/api/fundamentals/TLC.AU.json#2026-06-30 (filed 2026-10-16T07:36:20.674Z); FY2026: cash repurchases 9100000 AUD.

### Are managers owners

Insiders own 1.6% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); TLC.AU SharesStats.PercentInsiders = 1.6119999999999999 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 12.2% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:36:20.674Z); Ten-year compound average after fade. Initial solved rate 0.16252680740459835. Price 5.27; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03.  Closing-price date 2026-10-15.

## Monthly share-price history (AUD per share)

- 2022-05: AUD 4.74 per share

- 2022-06: AUD 4.52 per share

- 2022-07: AUD 4.54 per share

- 2022-08: AUD 4.42 per share

- 2022-09: AUD 4.18 per share

- 2022-10: AUD 4.29 per share

- 2022-11: AUD 4.61 per share

- 2022-12: AUD 4.48 per share

- 2023-01: AUD 4.70 per share

- 2023-02: AUD 5.19 per share

- 2023-03: AUD 5.12 per share

- 2023-04: AUD 5.04 per share

- 2023-05: AUD 4.98 per share

- 2023-06: AUD 5.13 per share

- 2023-07: AUD 5.17 per share

- 2023-08: AUD 5.04 per share

- 2023-09: AUD 4.72 per share

- 2023-10: AUD 4.53 per share

- 2023-11: AUD 4.60 per share

- 2023-12: AUD 4.84 per share

- 2024-01: AUD 5.06 per share

- 2024-02: AUD 5.08 per share

- 2024-03: AUD 5.15 per share

- 2024-04: AUD 4.88 per share

- 2024-05: AUD 4.87 per share

- 2024-06: AUD 5.07 per share

- 2024-07: AUD 4.97 per share

- 2024-08: AUD 4.99 per share

- 2024-09: AUD 5.12 per share

- 2024-10: AUD 4.99 per share

- 2024-11: AUD 5.18 per share

- 2024-12: AUD 4.94 per share

- 2025-01: AUD 5.05 per share

- 2025-02: AUD 4.75 per share

- 2025-03: AUD 4.76 per share

- 2025-04: AUD 5.22 per share

- 2025-05: AUD 5.10 per share

- 2025-06: AUD 5.33 per share

- 2025-07: AUD 5.42 per share

- 2025-08: AUD 5.88 per share

- 2025-09: AUD 5.88 per share

- 2025-10: AUD 5.50 per share

- 2025-11: AUD 5.47 per share

- 2025-12: AUD 5.16 per share

- 2026-01: AUD 5.15 per share

- 2026-02: AUD 5.51 per share

- 2026-03: AUD 5.38 per share

- 2026-04: AUD 5.52 per share

- 2026-05: AUD 5.42 per share

- 2026-06: AUD 5.76 per share

- 2026-07: AUD 5.59 per share

- 2026-08: AUD 4.99 per share

- 2026-09: AUD 4.87 per share

- 2026-10: AUD 5.22 per share

## Annual estimated value (AUD per share)

- FY2023: low AUD 2.19 per share, central AUD 2.45 per share, high AUD 2.79 per share

- FY2024: low AUD 2.29 per share, central AUD 2.58 per share, high AUD 2.97 per share

- FY2025: low AUD 2.18 per share, central AUD 2.45 per share, high AUD 2.82 per share

- FY2026: low AUD 2.07 per share, central AUD 2.32 per share, high AUD 2.65 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

The Lottery

TLC · AU

S&P/ASX 200

Not a wonderful business

1 quality test fails. A lower price would not fix the business.

Share price: AUD 5.27
Buy up to: AUD 2.32
Expected / yr: 5.8% at today's price (10.0% at central value)

The business

How it makes money
Why customers stay
Where the cash goes
Are managers owners
What the price says

1. Is this a good business?

Evidence only; not required for Buy

Margins varied 4.6% around their average (limit 35%), and no loss years were recorded (limit 2).

Operating margin

8y median: 16.4%
Worst year: 15.2%
Latest · 2026: 16.2%

Gross margin fell 4.5 percentage points (limit 4).

ROIC excluding acquisitions

6y median: >100%
Worst year: 14.3%
Latest · 2026: 14.3%

Each $1 of profit left $1.03 for owners over five years (minimum $0.80).

Annual owner cash / profit

Five-year totals: 1.03×
Annual median: 1.02×
Latest · 2026: 0.99×

per-share value change
Passing bar: ≥ AUD 0

Profits were backed by cash: accruals were -2.5% of assets (limit 10%).

Sloan accruals

6y median: -3.3%
Worst year: 3.3%
Latest · 2026: -2.5%

Profit record · pass 0 loss years in 8 (at most 2), mean operating margin 16.4%, three-year average owner earnings per share 0.16 AUD.

2. Is the price low enough?

PriceEstimated rangeBuy price

2022-05 · Price AUD 4.74; 2022-06 · Price AUD 4.52; 2022-07 · Price AUD 4.54; 2022-08 · Price AUD 4.42; 2022-09 · Price AUD 4.18; 2022-10 · Price AUD 4.29; 2022-11 · Price AUD 4.61; 2022-12 · Price AUD 4.48; 2023-01 · Price AUD 4.70 · Value 2.45 · Buy at or below 2.45; 2023-02 · Price AUD 5.19 · Value 2.45 · Buy at or below 2.45; 2023-03 · Price AUD 5.12 · Value 2.45 · Buy at or below 2.45; 2023-04 · Price AUD 5.04 · Value 2.45 · Buy at or below 2.45; 2023-05 · Price AUD 4.98 · Value 2.45 · Buy at or below 2.45; 2023-06 · Price AUD 5.13 · Value 2.45 · Buy at or below 2.45; 2023-07 · Price AUD 5.17 · Value 2.45 · Buy at or below 2.45; 2023-08 · Price AUD 5.04 · Value 2.45 · Buy at or below 2.45; 2023-09 · Price AUD 4.72 · Value 2.45 · Buy at or below 2.45; 2023-10 · Price AUD 4.53 · Value 2.45 · Buy at or below 2.45; 2023-11 · Price AUD 4.60 · Value 2.45 · Buy at or below 2.45; 2023-12 · Price AUD 4.84 · Value 2.45 · Buy at or below 2.45; 2024-01 · Price AUD 5.06 · Value 2.45 · Buy at or below 2.45; 2024-02 · Price AUD 5.08 · Value 2.58 · Buy at or below 2.58; 2024-03 · Price AUD 5.15 · Value 2.58 · Buy at or below 2.58; 2024-04 · Price AUD 4.88 · Value 2.58 · Buy at or below 2.58; 2024-05 · Price AUD 4.87 · Value 2.58 · Buy at or below 2.58; 2024-06 · Price AUD 5.07 · Value 2.58 · Buy at or below 2.58; 2024-07 · Price AUD 4.97 · Value 2.58 · Buy at or below 2.58; 2024-08 · Price AUD 4.99 · Value 2.58 · Buy at or below 2.58; 2024-09 · Price AUD 5.12 · Value 2.58 · Buy at or below 2.58; 2024-10 · Price AUD 4.99 · Value 2.58 · Buy at or below 2.58; 2024-11 · Price AUD 5.18 · Value 2.58 · Buy at or below 2.58; 2024-12 · Price AUD 4.94 · Value 2.58 · Buy at or below 2.58; 2025-01 · Price AUD 5.05 · Value 2.58 · Buy at or below 2.58; 2025-02 · Price AUD 4.75 · Value 2.45 · Buy at or below 2.45; 2025-03 · Price AUD 4.76 · Value 2.45 · Buy at or below 2.45; 2025-04 · Price AUD 5.22 · Value 2.45 · Buy at or below 2.45; 2025-05 · Price AUD 5.10 · Value 2.45 · Buy at or below 2.45; 2025-06 · Price AUD 5.33 · Value 2.45 · Buy at or below 2.45; 2025-07 · Price AUD 5.42 · Value 2.45 · Buy at or below 2.45; 2025-08 · Price AUD 5.88 · Value 2.45 · Buy at or below 2.45; 2025-09 · Price AUD 5.88 · Value 2.45 · Buy at or below 2.45; 2025-10 · Price AUD 5.50 · Value 2.45 · Buy at or below 2.45; 2025-11 · Price AUD 5.47 · Value 2.45 · Buy at or below 2.45; 2025-12 · Price AUD 5.16 · Value 2.45 · Buy at or below 2.45; 2026-01 · Price AUD 5.15 · Value 2.45 · Buy at or below 2.45; 2026-02 · Price AUD 5.51 · Value 2.32 · Buy at or below 2.32; 2026-03 · Price AUD 5.38 · Value 2.32 · Buy at or below 2.32; 2026-04 · Price AUD 5.52 · Value 2.32 · Buy at or below 2.32; 2026-05 · Price AUD 5.42 · Value 2.32 · Buy at or below 2.32; 2026-06 · Price AUD 5.76 · Value 2.32 · Buy at or below 2.32; 2026-07 · Price AUD 5.59 · Value 2.32 · Buy at or below 2.32; 2026-08 · Price AUD 4.99 · Value 2.32 · Buy at or below 2.32; 2026-09 · Price AUD 4.87 · Value 2.32 · Buy at or below 2.32; 2026-10 · Price AUD 5.22 · Value 2.32 · Buy at or below 2.32; 2026-10 · Price AUD 5.27 · Value 2.32 · Buy at or below 2.32

AUD per share · annual estimates

Price & return math
Value range	AUD 2.07 – AUD 2.65
Buy at or below	Central value AUD 2.32
Discount to value	1 − 5.27 / 2.32 = -127.3%
Return / year	About 5.8% a year at today's price (required return 10.0%)
Cash-flow inputs	Owner cash AUD 0.16/share; 0.0% growth for 5 years, then fades to 3.0%; excess cash AUD 0.28/share today.
Required return	10.0% / year, earned by construction at the central value

RevenueAUD 3.6B

Revenue

Owner earningsAUD 281M

Owner earnings

Operating margin16.2%

Operating margin

Net cash / debtAUD -1.8B

Net cash / debt

Prices 15 Oct 2026 · FY2026