Tabcorp posts solid profit as online gambling outlook darkens
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Tabcorp posts solid profit as online gambling outlook darkens
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Tabcorp has posted $66 million in full-year net profit, beating market expectations following the demerger with its cash-cow lottery business as gamblers returned to its retail venues after the end of the pandemic.
The wagering industry stalwart increased its earnings before interest, tax, depreciation and amortisation by 8 per cent to $391 million in the 12 months to June 30, while its statutory revenue rose 2 per cent to $2.4 billion. Tabcorp will pay a fully franked dividend of 1¢ a share, the company said in a statement to the ASX on Thursday.
The company’s share price traded 4.3 per cent higher at $1.10 by mid-afternoon.
Tabcorp has long been accused of missing the boat on the boom of online wagering and has lost market share in recent years to global behemoths such as Sportsbet and Entain.
Chief executive Adam Rytenskild has been determined to shift the company’s outlook by improving its online position through putting less emphasis on retail licences, the former backbone of the business, and overhauling its digital arm.
He said Tabcorp was the only local wagering operator to increase its earnings last financial year.
“The question of how Tabcorp would come out of COVID-19 was always going to be about whether we’d lose market share, instead we grew total share. We’ve disrupted the market.”
Tabcorp chief executive Adam Rytenskild
“Despite a distorted market which included the introduction of an aggressive new operator and increased generosity and marketing spend by competitors, our digital revenue share remained relatively stable, highlighting the strength of our new products,” Rytenskild said.
Tabcorp’s cash revenue increased by 25 per cent this year as retail customers were able to bet on sport and horse racing in venues again after the COVID-19 affected year in 2022.
Digital net revenue decreased by 12 per cent due to the softer online gambling market post border closures and the tougher cost-of-living pressures. For the half, Tabcorp’s digital revenue decreased by 9 per cent, while Sportsbet and Entain lost 1 per cent and 3 per cent, respectively.
Rytenskild said he was confident Tabcorp’s current three-year strategy would pay off despite the one-off retail boost and weakened digital performance last financial year, arguing the business increased its overall market share over the year.
“The digital market has declined from its COVID-19 highs. The question of how Tabcorp would come out of COVID-19 was always going to be about whether we’d lose market share; instead we grew total share. We’ve disrupted the market,” Rytenskild said.
Tabcorp announced parting chief financial officer Daniel Renshaw would be replaced by Damien Johnston on an interim basis – subject to probity approvals – from September. The business said Renshaw would step down at the end of this month due to “personal reasons”.
