Tatts Group will roll out 50 revamped wagering outlets under the new UBET name by the end of 2015 in a bid to reverse the declining performance of the group's bricks-and-mortar betting shops.
Tatts annual net profit rose by 25.7 per cent to $251.96 million in the year to June 30, from $200.4 million in 2013/14.
The group's lotteries business lifted revenue and earnings in a record performance.
But wagering revenue and earnings fell, reflecting the launch of the UBET brand late in the fiscal year, stiff competition from European and domestic bookmakers, and difficult economic conditions in regional areas.
In wagering, digital sales were strong, but bricks-and-mortar sales fell 2.3 per cent - worse than the fall of 1.4 per cent a year earlier.
Tatts chief executive Robbie Cooke said the rollout of new self-service terminals from January 2016, the rollout of 50 refurbished UBET stores by December 2015, and other initiatives would help boost the wagering business.
"We are confident that we can bring our retail network back into growth," Mr Cooke said on Thursday.
He said two pilot UBET stores had generated a double-digit lift in sales, and customers were already showing strong awareness of the UBET brand, which was launched at the end of April.
But Mr Cooke said Tatts was only at the start of a two-year journey to rejuvenate its wagering business.
Tatts said traction in the group's digital channels in both lotteries and wagering continued to build, with the combined lotteries and wagering database of 2.9 million customers starting to be used for cross-marketing products.
Online lottery sales grew 20.9 per cent. More than 11 per cent of lottery sales are now generated online.
Online wagering grew by 12.5 per cent. More than 25 per cent of wagering sales now occur online.
Tatts said it had started the new financial year with momentum continuing, with eight lottery jackpots at more than $15 million, compared to five in the same period last year.
Tatts also has launched its first new draw lottery game, "Set for Life", since 1996.
Tatts said the new game, launched in early August, had attracted a younger audience and was generating very strong online sales above 20 per cent.
In fiscal 2015, Tatts' lotteries business lifted revenue by 2.8 per cent to $1.98 billion despite a softer jackpot run.
Total wagering revenue fell 1.5 per cent to $632.9 million.
Shares in Tatts closed 15 cents, or 3.79 per cent, lower at $3.81.
Analysts said Tatts had missed market expectations on revenue and earnings, the dividend was lower than expected, and earnings from wagering had missed most market estimates.
RECORD LOTTERIES BOOST TATTS
* Annual net profit of $251.96m, up 25.7 pct
* Revenue of $2.92 billion, up 1.8 pct
* Fully franked final dividend of 7.5 cents per share, up two cents
