Tabcorp FY-2016/17 results show significant losses

Australian land and online betting behemoth Tabcorp has released its FY 2016-2017 figures, reporting a net profit after tax loss (NPAT) of A$20.8 million following significant items after tax that included AUSTRAC litigation costing A$61.8 million; AFP Cambodia investigation A$1.9 million; proposed merger with Tatts A$53.9 million; Intecq acquisition A$4.9 million; Sun Bets operating loss A$47.6 million; Sun Bets assets impairment A$20.7 million and Melbourne premises relocation A$8.9 million.

Our readers may recall that the SunBets enterprise is a joint online gambling venture between Tabcorp and the UK media company News UK, which has incurred heavy losses in its first year of operation. Top management bailed earlier this year, and Tabcorp says it has “reset” the business after EBITDA recorded a loss of A$46.2 million.

Financial highlights in the group’s annual report included the overall NPAT loss and:

* Revenues marginally up 1.9 percent at A$2,229.6 million, within previous guidance;

* EBITDA of A$504.1 million, down 2.3 percent;

* NPAT prior to significant expenses A$178.9 million, down 3.8 percent;

* 6 percent rise in Wagering & Media operating expenses;

* Growth in digital turnover of 13.9 percent, and total TAB fixed odds revenue growth up15 percent, including 20.8 percent growth in racing;

* Final dividend 12.5 cents per share, taking the full year ordinary dividend to 25.0 cents per share.

Significant business developments included:

* Good progress on the merger with Tatts, which is expected to complete by the end of 2017;

* The acquisition of acquired Intecq, a complementary gaming systems and monitoring business;

* The launch of SunBets in the UK;

* Settlement achieved in the AUSTRAC civil proceedings;

* Ongoing digital expansion and stronger retail partnerships through a digital communications model and the launch of a digital Keno product;

* All divisions performed to expectations, with increased investments in technology, capability, marketing, risk and compliance;

* The company has embarked on a review of its cost base;

* Digital and fixed odds metrics were strong in the core TAB division, where digital turnover growth was in double digit territory;

* Luxbet disappointed with a poor performance, recording an EBITDA loss of A$8 million. A strategic review of this business is currently underway

CEO David Attenborough described the year as strategically important for Tabcorp.

“Our plan for FY18 centres on completing the combination with Tatts,” he said. “At the same time, we have a clear set of priorities to drive performance in our core businesses and benefit from the strategic initiatives we delivered in FY17. We will continue to focus on maintaining a disciplined approach to operating expenses and capital expenditure and delivering sustainable returns for our shareholders and partners.”

Related and similar