Tatts booked a reported net profit of $257.6 million for 2007-08, down by 10.7 per cent on the previous year.

However, after excluding a $57.4million tax benefit in the 2006-07 result, net profit was up by 11.4per cent.

The company's wagering operations recovered in the second half of the year after absorbing an adverse impact from the equine influenza outbreak in the first half.

Its lottery operations performed well despite new competition from international giant Intralot in Victoria.

Chief executive Dick McIlwain said, ''Our businesses have all got nice momentum as we move into the new financial year..

''We're expecting this half to be very solid the way things are panning out for us.

''There's nothing on our horizon that gives us any real cause for concern.''

But Mr McIlwain suggested analysts' expectations of 12 per cent profit growth in 2008-09 were unrealistic.

''I don't imagine the current environment would support that kind of outcome,'' he said.

''We're certainly looking more at single digits than high single digits in the current environment, but we're only a month in, there's a long way to go.''

Tatts' reported revenue for the 12 months to June 30, 2008 rose by 27.9 per cent to $3.09 billion.

The company said a focus on cutting costs would help improve its business margins fiscal 2009.

Tatts will also reduce spending on its poker machine operations, given it will lose its Victorian poker machine duopoly with rival Tabcorp Holdings after 2012.

Tatts did not declare a final dividend, but will pay a special dividend of 10.5c in October. AAP