Tabcorp impresses investors with full year results

Australian gambling giant Tabcorp has impressed investors with a return to profitability in its full year report, which included the A$11 billion merger with Tatts.

CEO David Attenborough reported strong growth in the company’s online betting business and online lotteries business, along with the acquisition of 32,000 new punters as a result of FIFA World Cup marketing. The positive report sent Tabcorp’s share price up 7.5 percent Wednesday morning.

Highlights of the report included:

* Digital betting turnover grew 16.3 percent y-o-y to A$5 billion – the fastest rate in three years;

* The company’s marketing efforts over the soccer World Cup contributed to an 8 percent rise in the number of active account-holders with its TAB and UBET betting brands to reach nearly 720,000;

* Underlying earnings soared more than 37 percent to A$246 million;

* The Tatts merger achieved savings of A$8 million in the past 12 months, and the company is on track to deliver A$130 million in savings in earnings by the 2021 financial year.

Rejecting arguments that the Tatts merger had been disruptive of business, Attenborough said:

“The core business is not demonstrating disruption uncertainty in wagering and media, it’s demonstrating growth. That gives us confidence that, one, we’ve got the people right, which we have, but secondly, that we are setting the groundwork for not only capturing the synergies but also getting some fundamental growth in these businesses.”

Attenborough hinted at major advertising initiatives around major sporting events, saying: “Building campaigns around major events is generally what resonates out there. Having a base level of offers and products throughout the year is important, but you build your brand around major events.”

Industry observers noted that any campaigns will have to comply with new and restrictive federal government rules that took effect earlier this year prohibiting gambling advertising from being aired during daytime live sporting events, from five minutes before the opening siren and five minutes after the final siren, between 5 am and 8.30 pm. Tabcorp supported that legislation.

Attenborough said that the company is well positioned to perform in the “improved environment” in Australia – a reference to his company’s successful lobbying which has seen state governments-imposed taxation on online bookmakers and a federal ban on secondary lottery operators.

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