Good day. Thank you for standing by. Welcome to The Lottery Corporation 2023 half year results briefing conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. We ask that you limit your questions to two questions at a time. To withdraw your question, you'll need to press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sue van der Merwe, Managing Director and CEO. Please go ahead.
Thank you. Good morning, and thanks for joining us. I'm Sue van der Merwe, CEO of The Lottery Corporation, and I'm joined by our CFO, Adam Newman. Today, we'll be presenting our financial results for the six months to 31 December 2022, and we'll take you through the investor presentation lodged with the ASX this morning. When we were last on an earnings call six months ago, we had just started life as a listed company and presented a strong, indeed a record set of results. I'm pleased to say that momentum has continued into our first full six months as a standalone entity. A significant step-up in customer numbers and growth across both our retail and digital channels, demonstrating the strength of our customer-led omni-channel approach.
Our focus as a team has been on maintaining positive momentum in the business, progressing key strategic initiatives, setting the business up for success, and driving a full program of activity around separation. We continue to manage the company for long-term sustainable growth with a strategic approach to optimize revenue across our balanced gain portfolio. A good example of that is the accelerated Powerball jackpot sequences, which led to the record AUD 160 million jackpot. We're thinking ahead, and we're driving for that overall portfolio result. We're delivering strategic initiatives such as the innovative Store Syndicates online product, which leverages our omni-channel model. We've set our strategy, our vision, purpose, and principles, and we're seeing very strong team engagement.
One of our principles, dare to find a better way, is about driving a culture where people question, challenge, and strive to be smarter and more effective about the way we do things. To that end, we are focusing on efficiency and managing our costs. It's important to recognize we are a growing business, and our revenue is responsive to AMP, which is one of our biggest costs. What we're doing about that is looking at how we optimize marketing spend. Growing active registered customers, for example, enables us to deliver more effective personalized marketing programs. The investments we've made in building digital capability also continue to deliver benefits. We're now driving our digital media buying through our internal team rather than an outsourced provider, and that's delivering cost savings and quicker response times.
Finally, we've also worked with our new board to review our capital settings and capital allocation framework, and that's led to adjustments to our target dividend payout ratio and leverage levels, which we've announced today. We're also pleased to announce TLC's first dividend today, an interim dividend of AUD 0.08 per share, fully franked, as well as a special dividend of AUD 0.01 per share. The special dividend is for one June to thirty June 2022, our first month as a listed company. Finally, before I hand over to Adam, I think it's worth highlighting this business's pro forma EBITDA in first half 2018 was about AUD 200 million. Today, five years on, we're reporting a first half result of more than AUD 400 million.
As Chief Executive, I couldn't be more pleased with the way the team has come together with passion and drive to deliver this strong set of results, which has set us up well in our first financial year as The Lottery Corporation. I'll hand over to Adam now to take you through the financial results.
Thanks, Sue. Hi, everyone. If we can go to slide six, this provides a snapshot of our first half results. There does continue to be noise within our numbers associated with the impact of the demerger, and we thought it might be helpful to call this out. Consistent with what we presented at year-end, we've provided both the reported numbers and the numbers on a comparable basis, which we consider a more representative of the ongoing business. The reported results include six months of lotteries in both periods. They don't include the Keno results in the PCP. Reported numbers in the current period also reflect the interest on the debt which transferred from Tabcorp at the time of the demerger and is therefore also not included in the PCP.
Consistent with what we presented to you at year-end, we've adjusted our reported numbers to include the full contribution of Keno in both periods, as well as the impact of the fair value uplift on the Keno acquisition when deriving the comparable numbers. The comparable results for the prior period also include a pro forma adjustment for the impact of demerger dyssynergies. This is consistent with what was set out in the demerger booklet. We see significant items there in the reported numbers and for the half. These relate to costs with the separation from Tabcorp. Approximately 80% of these costs were determined to be OpEx, with the remainder considered to be CapEx in nature. We have set out further details with regards to these costs in Appendix one.
If I can now move to slide number seven, this shows the components of the growth in EBITDA on a comparable basis. Lottery's revenue was the biggest contributor to the EBITDA growth, there was also VC management increase in both businesses. In Lotteries that came from three areas. First of all, increased digital sales. Secondly, there was a further step up in fees from the Jumbo reseller agreements, lastly, interest income on the Set for Life deposits. The increase in the Keno VC margin is attributable to New South Wales venues being closed in the prior period because of COVID restrictions. New South Wales is our largest Keno market, our arrangements with our co-licensee means we account for our share of that business' VC as revenue.
You can see that our costs grew a little over AUD 5 million for the half off a small base. This is after adjusting for the dissimilarities that I called out earlier. As Sue mentioned, we remain focused on controlling costs, especially in this unusual inflation environment and tight labor market, noting that people costs represent over half of our OpEx. FY 2023 is a transition year for us as we continue to work through separation and exiting the PSA arrangements with Tabcorp. I'll now hand back to Sue.
Thanks, Adam. So moving on to slide 10 and our lotteries segment results. The lotteries revenue growth number of 6.5% shows the value in how we actively drive our portfolio of games, including jackpot sequences. The benefits from accelerating the jackpot sequence leading up to the record AUD 160 million Powerball draw in October, as well as the lift in digital turnover, were key drivers of the revenue growth. It's worth noting that from a lotteries perspective, we believe the half was free of COVID impacts. Slide 11 breaks down turnover by category and by product. At a category level, we saw a strong outcome from jackpot games in aggregate led by Powerball. Non-jackpot or base games were up slightly on the PCP, with Lucky Lotteries posting a record AUD 33 million super jackpot.
This record run led to 139 draws of this raffle-style jackpot game in the first half versus 40 in the PCP. Saturday Lotto, as our largest base week game, was resilient in the face of the heightened jackpot activity. There were several initiatives the team put in place to benefit from the traffic flows we get from big jackpot draws and maximize reinvestment across the portfolio. This included placing promotional AUD 10 million Saturday Lotto draws to follow big Powerball jackpot draws. Accelerating the Powerball jackpot sequence to get it to AUD 100 million in December to maximize reinvestment into the AUD 40 million New Year's Eve Megadraw. Adding cascade celebrations and double dividend offers to the Monday & Wednesday Lotto game, timed to follow super draws, again to maximize reinvestment.
Turnover from the jackpot games benefited by around AUD 180 million from accelerated jackpot sequences and to a lesser extent, favorable jackpot outcomes. Lucky Lotteries has also now returned to more normal levels after its record jackpot run, and that added more than AUD 50 million in additional turnover in the half. It's also worth remembering there's some seasonality in our results, given Christmas trading and the New Year's Eve Megadraw, which on its own contributed approximately AUD 100 million in turnover. The table on the right shows the impact of COVID tailwinds in the PCP on our base games turnover growth. The three-year CAGR, on the other hand, shows the positive underlying performance and momentum across the portfolio over time, and the benefits that we continue to see from game changes to Set for Life and Saturday Lotto.
On slide 12, we've included the outcome of the simulations we run to assess the actual jackpot run against expected outcome for both jackpot games. Powerball had 2 AUD 100 million draws and a record AUD 160 million draw in the half, contributing to an outcome that was in the 60th percentile in terms of the 100-year simulations. Remember that we did redesign Powerball in 2018 to deliver more frequent AUD 100 mil jackpots. Oz Lotto, on the other hand, had a 15th percentile result. This unfavorable outcome was more than offset by Powerball, which shows the benefit of having a diversified portfolio. Slide 13 looks at the activity in the jackpot segment. During the half, we took proactive action to drive the Powerball results through accelerating jackpot sequences, delivering that AUD 160 million jackpot in two fewer weeks than previously.
There hadn't been a 100 mil jackpot for nine months. We backed ourselves with an AUD 160 million offer, which maximized returns and had a very strong demand from customers. Turning to Oz Lotto, the game changes have only been in market around nine months now. The change has been well accepted by players, with early sales volume strong at the lower end of the jackpot sequence. The majority of the revenue upside is expected when the game gets to those larger jackpot levels. We expect to see those benefits play out over time. Looking at growth across our channels on slide 14. From our perspective, it's a very positive outcome to see turnover growth in both channels against the PCP. Digital as a percentage of overall turnover accounted for 38.4% in the half.
The short-term flattening of digital share growth reflects the post-COVID rebound in retail activity and the fact that COVID brought forward some of that digital growth. Moving forward, we expect digital to continue to grow. However, the rate of growth may moderate. Our focus continues to be about maximizing results and customer growth across all channels through our customer-led omni-channel approach. In fact, we've welcomed 1 million more active registered players in the last four years. One initiative that really epitomizes the strength of our omni-channel model is our Store Syndicates Online product described on slide 15. It's a customer-led innovation developed by our in-house team and brings home the idea of a seamless customer experience. Syndicates are a popular and social way to play, and they've been a staple for our retailers for many years, allowing customers to share in buying that bigger entry.
Our big jackpot and event draws, along with this new innovation, helped grow overall syndicate participation by more than 25% in the half. Allowing customers to now purchase a share in a syndicate set up by their local outlet through The Lott app or website is something we introduced in late November, and it's been a hit. Retailers love it. For one, they can sell 24/7 without labor or other variable costs. We've been really pleased with adoption, with more than 1/3 of retailers offering online syndicates in the first week of launch. Research tells us one of the reasons customers like to play syndicates is because it connects them with the community they value. Slide 16, on to Keno. A strong result as pubs and clubs transition to unrestricted trade in contrast to the PCP.
Queensland, in particular, saw strong growth as footfall increased, we ran a full program of marketing activity to encourage the return to pre-COVID behavior, including practical promotions such as the Play the Numbers You Know campaign. As we mentioned, the result also has the margin impact from the return to trade in New South Wales, which is our largest Keno market. You can see on slide 17, the growth during the half in Keno was in retail. It's worth noting that digital turnover, while down on the PCP, has more than doubled from pre-COVID levels. While COVID brought some of that digital growth forward, we believe there is more upside in this channel. Slide 18. Our new Victorian Keno offer went live yesterday, giving customers an integrated digital and retail experience.
Customers can now use their Keno app, which incidentally has a 4.8 star rating, to play in Victorian venues. Our messaging in market reinforces what our Keno offer is very strong on, and that's its trust in market, Australian ownership, and frequency of real winners. We see real opportunities through this integration with buy-in from licensed venues as they'll receive commissions on digital sales in their venues. Adam will now take you through the next section. Adam?
Thanks, Sue. We foreshadowed at our AGM that we would come back to discuss further our capital allocation framework and how we think about managing shareholders' capital. We are fortunate that we've got a low capital intensity business with defensive earnings stream, along with a track record of generating strong and steady cash flow. This page sets out the framework for capital allocation decisions, or said another way, how we think about allocating cash flow in order to help us drive long-term shareholder value. Firstly, we do intend to translate that strong cash flow into consistent and reliable dividends for our shareholders. Reflecting this, we have increased our target dividend payout ratio from previously 70%-90% to now 80%-100% of net profit after tax before significant items. We also expect our dividends to be fully franked.
This range does provide us with some flexibility and helps balance short-term earnings and cash flow fluctuations that may arise from time to time from jackpot-related volatility. Central to this framework is the financial policy, ensuring both a robust and flexible balance sheet. After discussions with the board, we have adjusted our target leverage range to three to four times over the medium to longer term. The prior half turn was a tight range, whilst appropriate at the time of the demerger, widening it to a full turn is considered appropriate in order to afford us greater flexibility. There's no fundamental change to our views on target leverage capacity, we will look to target the midpoint of the wider range over time.
In terms of uses for the remaining capital post dividends, we'll always look to reinvest that capital at the highest available risk-adjusted return as per the framework. We do continue to assess various investment opportunities, predominantly focused on the existing domestic business. If we don't have suitably attractive uses for those surplus funds, we'll look to return that excess capital to shareholders in the most efficient form available. In summary, our aim is to deliver top quartile total shareholder return performance against the ASX 100, through a combination of fully franked dividends, share price growth, and where appropriate, capital return. If I can now move you to slide 21, we've summarized our key capital metrics there. I wanna start with leverage. You can see that leverage entered the half below our target range at 2.6x .
We'd like to point out that this metric was favorably impacted by working capital movements due to higher payables for large jackpot events, which occurred towards the end of the calendar year, and amounts owing to Tabcorp. These items have reversed in the second half, and if you adjust for them, leverage would've been around the bottom end of our new target range. Today's announced dividend also comprised a special dividend of AUD 0.01, which relates to the June 2022 earnings, being the first month post demerger, consistent with the scheme, demerger booklet rather, and AUD 0.08 in relation to earnings for the six months to 31st of December, and both will be fully franked. A few other key call-outs before I finish. We retain a strong investment-grade credit rating.
Our BAU CapEx was actually relatively low in the first half, given separation activities. We got off to a slow start and spend is expected to skew to the second half. While our CapEx guidance of AUD 65 million-AUD 75 million remains unchanged at this stage. Most of the AUD 149 million in separation expenditure is expected to be incurred this year, and the CapEx component rather of it, is estimated at around 20%. Finally, it is worth noting that over 90% of our debt, which mainly comprises our USPP notes, is fixed, and we are therefore largely shielded from the impact of interest rates increases. In summary, with a strong balance sheet that provides capacity to support growth and gives us flexibility, including for any potential future capital management initiatives.
With that, I'm gonna hand back to Sue.
Thanks, Adam. If I can skip to slide 24, which outlines our vision, purpose, and principles. These were redefined following the separation from Tabcorp, and we announced them at our AGM last year. In short, the framework sets out how we want to unlock the extra potential we see in the business, as well as the ways we want our teams to work to realize that potential. I'm pleased to say that we have a highly engaged team, and that's been validated by an early pulse survey. Ultimately, we want to be a company that people want to work for and do business with, and with a clear aspiration to be the world's best in the category. This includes our commitment to operating with integrity and transparency with all stakeholders, including governments and regulators. Slide 25.
We're very pleased with how the team has been executing our product and omni-channel initiatives, and we've outlined the priorities on this slide. As we've announced, Powerball will be the next game change with a planned AUD 0.10 increase to AUD 1.20 per game, subject to final approvals. It will be the first change to Powerball pricing since 2018. We're also proposing to lift commissions as part of the omni-channel remuneration model we put in place four years ago. Based on FY 2022, we estimate this would give retailers an extra AUD 75 million in commissions each year and circa AUD 25 million-AUD 30 million in EBITDA benefit to us, as we retain the base commission on our own digital sales. Personalizing the customer experience continues to be a big focus.
A lot of this activity so far has been in digital, we plan to uplift our retail technology to unlock some of the personalization benefits in that channel and lift the in-store experience for customers. We're continuing to shift the mix of our ANP spend between above the line, which is more about reminder to purchase and targeting unknown customers, and personalization in digital. Media consumption trends are helping us inform these decisions, that's making our ANP spend more effective. As we conclude on slide 26, we look back on the six months as a very positive start, a winning start for The Lottery Corporation. This is a strong company that's performing well. It generates strong cash flows, has defensive qualities, and long-dated licenses and approvals.
You can see from publicly available information that jackpots for our jackpot games have started relatively slowly in the second half. It's only early days. As we saw in the last task, the jackpot roll can change very quickly. That's one of the benefits of having a diversified portfolio. What's important in this business is to have a portfolio perspective and a longer term view. We're certainly very happy with how we're placed. We expect you'll be interested in our thoughts on the inflationary environment and the economic outlook. We're not immune to the economic cycle. History says demand for our products is quite resilient and relatively inelastic compared to other consumer products. We're not seeing anything in recent trading that fundamentally changes that view.
Finally, I want to point out that we are equally focused on not losing sight of what makes the lottery's model unique around the world. That's continuing to position The Lottery Corporation as a responsible operator that makes positive impacts and runs lottery games that return substantial revenue to governments. For the states and territories, lottery taxes are anywhere between 1.5% and 3% of their taxation revenue, so quite a meaningful contribution. The equivalent of half of the Australian adult population play lotteries each year, many of them buying tickets from their local newsagent or lottery kiosk. They're supporting small businesses who receive a commission as part of that transaction. It's a low involvement purchase with an average weekly spend of AUD 12 per player. Customers tell us they play because lotteries are a bit of fun.
They can dream about what they do if they win, the games support the community. That, in essence, is what lotteries are about. Thank you. We're now happy to open the line for questions.
Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. We kindly ask that you limit your questions to two at a time. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Bradley Beckett of Credit Suisse. Please proceed with your question.
Hi, yeah. Good morning, Sue and Adam. Congratulations on the strong result. Maybe if I can just start with the Victorian online Keno strategy. Are there any sort of initiatives in the pipeline in terms of game innovation, repricing, and would you be willing to cede for larger jackpots? Thank you.
Thanks, Bradley, and thanks for the positive feedback. Look, with Keno in Victoria, we are the leading operator nationally. You know, we have the scale, the trusted brand, we have those retail partnerships, and we think a very strong product offer across retail and digital. Of course, we've also got the jackpot pooling across jurisdictions. We've launched the advertising campaign that I outlined in the presentation, and I think the new offer that went live just yesterday is about really leveraging that retail channel and this omni-channel experience. What it means is that people sitting in venue now will be able to scan a QR code in-venue and play the same Keno offer that they're seeing on the screens in the venue, through their mobile phone.
Of course, that is very powerful because that's about expanding the customer base and expanding the opportunity to play in those venues. Outside of that, there's nothing else that I can share.
Payout ratio. Can I interpret that as being a movement away from a acquisition focus more towards capital management, or are you sort of gonna keep just the flexibility?
Yes. It's... Look, I think we missed the first part of that question. Sorry. there's a bit of a line thing. Can you just repeat it, please?
Increasing the payout ratio to 100%, is that sort of a bit of shift away from the acquisition focus and more towards capital management?
The ratio moved. It was previously 70%-90% of net profit after tax before, we moved it to the range now is 80%-100%. And as I just as I foreshadowed previously, I mean, we'll sit within that range as appropriate at the end of the day. I wouldn't, I wouldn't read anything into the changing of the range indicative of anything more, more broadly than just a revisit of our capital settings along with looking at our capital allocation framework.
Yeah. Okay. Thanks, team. Appreciate it.
Cheers.
One moment for our next question. Our next question comes from the line of David Fabris of Macquarie. Just as a kind reminder, please place yourself on mute when not speaking.
Yeah. Good morning, Sue. Good morning, Adam. Look, I've got a couple of questions. Just firstly, with the cost base, how should we think about it once the TSA expires? Should we be thinking about a notable step up, or is the current trends pretty reflective of where you think they're gonna go after it expires?
Yeah, it's a good question, David. Sort of from an OpEx perspective, we're rerunning through the TSAs with Tabcorp through the course of this year and, I mean, materially completed by then. The TSA arrangements. There's also commercial separation on top of just the TSAs 'cause the TSAs represent, you know, activity that's being provided to TLC by Tabcorp to enable us to operate. The commercial arrangements that have been struck when we were the same entity, we flagged this in the demerger booklet. There will be some increases in cost. At this stage, we're not in a position to be definitive about where they'll land. At the same time, we'll also be looking at ways to ensure that we are able to attempt to mitigate those costs.
Yeah. Okay. Just on capital allocation, I may have misheard you, but I thought you called out that there may be some domestic opportunities around growth. Would that be potentially renewing or extending the Victorian Public Lottery Licence on better terms, or what sort of growth options are you talking about?
We just called out that the focus is on the domestic business. I don't think we wanna get hugely specific, at this point, at the present time, about what those options may be.
Yeah, right. That'd be sticking within your current verticals, right? Lotteries and Keno. You're not looking at moving anywhere else.
No.
Okay. All right. Thank you very much.
One moment for our next question. Our next question comes from the line of Kai Erman of Jefferies. Please proceed with your question.
Good morning, Sue and Adam. Congratulations on the result. Thank you for the additional disclosure. That's really helpful. First question around the Powerball pricing, that step up. Do you have any view on any volume pushback or what sort of levels of pricing traction you'll be able to get from when this is implemented in May?
Yeah, sure. Thanks. Thanks again for the feedback as well. The increase is gonna be a 9.1% increase. Usually we assume a target of around 50%-75% price retention on a price increase. Obviously, that varies depending on the jackpot results that occur after we implement this, particularly on a jackpot game. Based on FY 2022, that's applying about AUD 120 million-AUD 180 million in additional turnover.
Thank you. When you talk about depending on jackpot results, the thinking there be in a period of more jackpots or around jackpots, that you would get more pricing traction there compared to if there were less jackpots?
I mean, there's a high degree of loyalty across the lower end of the sequence. Generally, the majority of those players accept the price increase, and you do see the uplift there. Clearly, with jackpot games, that brings a lot of additional, a lot of additional people into participating in the product, and we see benefit through that as well.
Okay, thank you. Given this is the first Powerball increase in five years, has something changed fundamentally in the ability to push price in Powerball more generally? Is this something we should just think of that happens every circle five years or just something we don't really think about happening again in the medium term?
Look, the way we look at this is to come back to the portfolio view. We're constantly evolving the products in the portfolio so that each of them have the strong position and appeal to our player base. We look all the time at, you know, what the next change should be and on which game. There's no magic sort of timeframe around that. The price increase and the quite significant matrix change that we've put into place for Powerball, back in 2018, was significant, and it was designed to deliver the jackpot through to AUD 100 mil and above, and it's clearly still doing that given the activity that we've just had in the first half. It's really about how the rest of the portfolio is going, how each game's going, and when we think the best opportunity is to make a change and impact the portfolio positively.
Okay. Thank you very much. That's very helpful. I'll pass it on from there.
Thank you.
One moment for our next question. Our next question comes from the line of Ben Brownlow of Jefferies. Please proceed with your question.
Hi. Thanks. Previously, you've indicated what the turnover was with respect to some of the bigger jackpots. I was just wondering on the 100 and the 160 what the turnover might have been, at least directionally, compared to the jackpot. Well, sorry, when you say what the turnover directionally relative to the jackpot, what do you mean?
for instance, in the last Yeah. Sorry, in the last presentation.
Sorry. Go ahead.
You said that, in the last presentation, for the February 22 AUD 120 million jackpot, the turnover was AUD 240 million. I'm just wondering, could you give us an indication on the greater than AUD 100 million jackpots this half, what the turnover might have been?
Yeah. We'll come back to you on it with a bit more detail. I will say that, you know, particularly the 160, that one had record turnover in relation to your number of steps in the sequence. We've had some very healthy jackpot turnovers in recent times.
And then just with the payables, a bunch of that was clients leaving their money and following all of those jackpots. What's happened after 31 December? Have you seen those players buy additional tickets, or is that money still there waiting for another big jackpot? Any kind of trends there?
The payables, you know, we've got obviously the New Year's Eve draw, this year we had the AUD 100 million Powerball. That was it, the 20-29th of December at the end of the day. As a consequence, we had a combination of a number of things that were in payables. It wasn't just customer account balances. Government taxes and GST would be another one that would sit in there, for example. It's a bit mixed, we've definitely seen that payables, the other thing that was in there was a Tabcorp payable, I think, at the end of the day. We've definitely seen that positive movement reverse in the second half.
Customer account balances have probably settled back down to the normal sort of level as to where they are. They do ebb and flow a bit because customers do put money in, into their accounts, waiting for like, you know, for them to buy a ticket and then you get reinvestment at the end of the day of their winnings that they may have.
I might just add to that. I was just gonna add to that from a strategic perspective. You know, this very deliberate positioning that we do of having an event followed by another event on a different game has been really successful for us. As Adam said, we had the AUD 100 million, then we had the AUD 40 million, the Powerball AUD 100 million, then we had the AUD 40 million Saturday Megadraw, then we float that through the AUD 10 million special event the following Saturday. That's all about engaging customers and growing our customer numbers because different games bring different customer groups in.
We take the opportunity to transfer the experience of a customer from one game into the other, and then sort of deploy all of our marketing capability to retain those customers and keep them interested. This is about driving the overall portfolio and growing, I guess, the whole pie.
Thanks very much.
One moment for our next question. As a reminder, to ask a question, you'll need to press star one one on your telephone. Please stand by. Our next question comes from the line of Annie Xu of Barrenjoey. Please proceed with your question.
I was going to ask about Lottery's online penetration, which is flat sequentially from last half. Can you give some further color on that and how you expect that to trend in the medium term?
I think, obviously we saw some flattening off of that uplift. Having said that, we had experienced significant uplift through the COVID period. You know, I think we got a bit of momentum, additional sort of momentum I guess, over and above what we had been experiencing prior to that through that COVID period. I think we're doing a lot to keep driving that digital growth, including leveraging that uplift, that very significant uplift in our active registered customer base. You know, the launch of Syndicates Online is all about engaging players through both our retail and digital channels.
Okay. My next question was on leverage. Just wondering how you plan to move back into the midpoint of the range, as you mentioned.
Yeah, well, that'll happen over time. I think in the construct of the overall capital management framework, if you make those adjustments at, like called out for the half, we're sort of trending towards the bottom end of the range. Look, I think it would just be something that we're continuing to monitor with the board. Do note that in the first half of this year, we didn't have a dividend to pay, so we'll be paying the dividend in the second half. We've also got separation costs that need to be funded in the second half next year because the majority of that wasn't paid for in this past year.
Okay. Just wanted to ask about the payout ratio increase again. Anything else that you would call out regarding how you came to that decision and how you decided that was the right range?
Not really. I mean, we set the original capital settings at demerger in conjunction with the Tabcorp board. You know, subsequent to demerger, we've constituted a new board with TLC. We've now got, you know, the trading history and we did a holistic review in conjunction with the board and the decision was taken that given where we now sit and we knew a few things that we didn't know then previously, we would just adjust the range in the manner that we did.
Great. Thank you.
Yeah. I might just, Annie, I've got those couple of numbers that you're asking for. The 160 had approximately AUD 270 million of turnover associated with it, and the two 100s had averaged around about AUD 150 million.
The AUD 270 is a record result for us.
Yeah.
On Powerball. Highest ever result.
One moment for our next question. Our next question comes from a line of Kai Eerman of Jefferies. Please proceed with your question.
Hi, everyone. Just a follow-up from me. Have you guys seen anything in terms of the impact on rising interest rates and inflation in terms of the balances that customers are leaving in their accounts over periods of time, or has that remained relatively stable?
Look, our business is, as we've said, very resilient in times of different economic cycles. We haven't seen any impact or change to the way customers are behaving from any of those pressures.
Yeah. I'll just add there that it's been pretty stable. It did spike up, both at June and at December with some of those large jackpot activities that we've had, but then it settled back down into more of the norms.
Have we got you there, Kai Erman?
Sorry, I just dropped out for a second, but thank you. That was it from me.
At this time, I would like to turn back to Sue van der Merwe for closing remarks.
Thank you. Thank you all for taking the time to join us. We understand it's a busy reporting day. We appreciate you giving us the time. Have a good day. Thanks, all.
This concludes today's conference. Thank you for participating. You may now disconnect.