Tabcorp posts 28.1 percent decline in profit in FY17H1

Australian wagering giant Tabcorp Holdings Ltd posted narrowed net profit in the first half of the 2017 financial year, down 28.1 percent to A$58.9 million (US$4.5 million).

According to the company’s filing to the Australian Stock Exchange on Thursday, the results, which were below expectation, were largely attributed to significant terms after tax caused by AUSTRAC civil proceedings (A$20 million), UK business start-up (A$17.9 million), INTECQ acquisition (A$4.1 million) and the proposed merger with Tatts Group (A$9.1 million), all of which totaled A$43.8 million

Total revenue for the half year was A$1.2 billion, up 2 percent year-on-year.

Tabcorp CEO David Attenborough, however, remained optimistic about the half-year results.

“All three Tabcorp businesses grew revenues in the half,” said Attenborough, referring to its Wagering & Media, Gaming Services and Keno businesses.

“Wagering and Media continued to respond to the highly competitive environment and TAB had a record breaking Spring Racing Carnival. We launched key initiatives which support our multi-channel strategy and reward our venue partners, such as a new digital commissions model.”

Total revenues in Wagering and Media were A$987 million, up 1.4 percent year-on-year with EBITDA at A$196.1 million.

Attenborough also noted the significant expansion of Tabcorp Gaming Services (TGS) in NSW, through a new partnership with the Panthers Group signed in January 2017.

“This follows the acquisition of INTECQ, which will support our goal of creating the market-leading venue services provider,” he noted.

Gaming Services saw revenues of A$60.2 million, up 13.8 percent, and EBITDA was A$36 million up 6.5 percent.

With regards to Keno, Attenborough also noted that Keno “continues to have good momentum with the implementation of jackpot pooling in Queensland and the launch of Mega Millions.”

The business unit posted A$112.1 million in revenue, up 2.2 percent with EBITDA of A$40.2 million, up 6.3 percent year-on-year.

Regarding its proposed merger with Tatts Group. Tabcorp says it is currently progressing the regulatory, industry and other approvals required for the merger.

“Completion is expected mid-2017,” said Attenborough.