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Early signs positive for Tabcorp as Tatts merger spurs FY18 growth

Wednesday, 08 August 2018 14:22
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The December 2017 merger between Australian gaming giants Tabcorp Holdings and Tatts Group saw Tabcorp’s revenue for the year ended 30 June 2018 climb 71.7% to AU$3.8 billion in what Managing Director and CEO David Attenborough describes as a “company-defining year.”

The merger, bringing together two of Australia’s gaming industry giants, has “created a world-class, diversified gambling entertainment group with an attractive portfolio of market-leading brands across wagering, media, lotteries, Keno and gaming services,” Attenborough said in a fling to the Australian Securities Exchange on Wednesday.

“The integration of the two businesses is on track, with initial business improvements and cost initiatives implemented.”

Although the merger was directly behind the sharp revenue jump, Tabcorp reported solid growth across most its segments including a 0.6% increase in Wagering & Media revenues on a pro-forma basis to AU$2.5 billion. It included 2.5% revenue growth from the TAB, driven by a 16.3% increase in digital turnover to AU$5.1 billion, which offset a 3.3% decline in retail turnover to AU$6.0 billion.

In the Lotteries & Keno segment, lotteries revenue climbed 4.9% to AU$2.1 billion on a pro-forma basis with digital sales up 27.8%. Keno revenues were AU$220.1 million, up 3.5%.

Gaming Services revenues held steady pro-forma at AU$315 million.

Looking ahead, Attenborough said Tabcorp would continue to focus on building the newly merged entity.

“The delivery of EBITDA synergies and business improvements from the integration of Tabcorp and Tatts is on track,” he said. “Initial synergies and business improvements of AU$8 million of EBITDA were delivered in FY18 and all decisions have been taken to deliver AU$50 million in FY19. The target remains at least AY$130 million of EBITDA from synergies and business improvements in FY21.

“We remain very focused on unlocking the benefits from the Tabcorp and Tatts combination for our many stakeholders. A key part of bringing the two businesses together involves building a strong and shared organizational culture. We’re making good progress on this priority.”

Tabcorp has announced a fully franked final dividend of AU$10.0 cents per share, payable on 14 September 2018.





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