Tabcorp’s $66.5m profit after keno and lottery business demerged

Tabcorp sees a positive year in its first annual financials since the separation of its lotteries and keno businesses, reporting a net profit after tax of $66.5 million.

The boom in its wagering business compensated for the stiffer market conditions the company faced.The company, which offers media and gaming services, posted statutory revenue growth of 2.6 percent, hitting $2.4 billion.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) skyrocketed by 88 percent to $407.4 million.

Major international online bookmakers such as Entain (who own Ladbrokes and Neds) and Sportsbet provide stiff competition to Tabcorp.

The shift from traditional in-person (retail) betting to online sports betting has also presented a challenge.

In response, Tabcorp revealed a new mobile platform that increased its total revenue share from 33.6 percent to 34.6 percent.

In a letter to shareholders, the company reported a 3% increase in active digital customers from June 1 to June 30.

According to a pro forma basis, the group’s revenue rose by a moderate two percent to $2.4 billion.

EBITDA ascended by 8 percent, reaching $391 million when subtracting last year’s lottery segment earnings.

A $49 million non-cash impairment related to the gaming services business impacted the reported net profit after tax of $66.5 million.

In his commentary, Tabcorp CEO Adam Rytenskild highlighted that the gaming giant was the only local large-scale wagering operator to clock an uptick in both revenue and EBITDA in the last fiscal year.

He attributed the success to the Genesis cost-cutting initiative, which notably reduced operating expenses by one percent for the year.

Mr Rytenskild underscored the robustness of their wagering ecosystem, even maintaining a relatively stable digital revenue share amid a distorted market and competitive threats.

The financial report coincides with the announced departure of CFO Daniel Renshaw, who resigned for personal reasons, at the end of the month.

Tabcorp announced a fully franked final dividend of 1 cent per share.

The company attributed this success to its new wagering focus and boosted online presence.

Tabcorp has a long-standing history in the Australian gaming and wagering industry.

Its roots go back to the Horseracing Totalizator Board (TAB) established in Victoria in 1961.

The company has since grown and diversified, managing several lotteries and sports betting services in its portfolio.

In 2011, Tabcorp demerged its former subsidiary, Echo Entertainment Group, focusing on gaming, entertainment, and hospitality.

The exit from the lotteries and keno segments is an extension of this strategy, allowing Tabcorp to focus more on its digital wagering and media operations.

Industry analysts suggest the move allows the firm to manage regulatory complexity and shifting consumer demands better.

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