Australian racing and wagering giant Tabcorp has announced a net loss after tax of AU$636.8 million (US$417 million) for the six months to 31 December 2023, with the loss resulting from a non-cash impairment charge of AU$731.9 million (US$482 million).
According to details released Thursday, the impairment charge relates to certain assets in the New South Wales (NSW) and South Australian (SA) wagering businesses, and goodwill relating to the Wagering and Media segment, and takes into account softness in the Australian wagering market, the impact of higher interest rates, and higher taxes in NSW following the end of transitional payments to Tabcorp which had been in place following the recent increase in the NSW Point of Consumption Tax (POCT) rate in June 2022.
On a statutory basis, group-wide revenue fell by 5% year-on-year to AU$1.21 billion (US$797 million) due to challenging trading conditions, with Group EBITDA down 14% to AU$170 million (US$112 million).
Despite this, Tabcorp has declared an interim dividend of 1.0 cents per share, which it said reflects the “strong financial position and confidence in the company’s trading outlook.”
In a statement, Tabcorp Managing Director and CEO Adam Rytenskild said, “Tabcorp’s transformation is on track. TAB’s improving market share trend highlights this, and the broader operational result demonstrates the substantial progress we have made as a company.
“We continue to focus on the three pillars of our strategy. Invest in customer and competitiveness to in back the Australian market, Level the Playing Field for fees, taxes and regulation and reshape our cost base for efficiency and growth.
“Total market share and digital market share grew compared to the prior half. This is another positive step having stopped the decline. We are seeing positive signs from targeted investment in product, brand, data, technology and retail as we start to leverage the strength of an extensive integrated wagering and media network throughout the country.
“We have become a more digital business, underpinned by recent investments in AI, data and new technology platforms. Combined with our TAB brand embedded in over 4,000 venues, we see a significant omni-channel opportunity that we are yet to capitalize on.
“The new Victorian License is a game changer for TAB and will generate an immediate step- change in earnings in Victoria from August. Had the license been in place during FY23 EBITDA would have been $140m higher on a pro forma basis.
“We are continuing to become a more efficient and effective business through our Genesis program. An example of this is the recent outsourcing partnership with Accenture for IT and Business Processes.
“These levers have us well placed to create growth and we are confident the market will continue to grow long term.
“Customer care remains central to our business and our partnership with Mindway AI assists us identify and help customers at risk of gambling harm faster. We await the outcome of the Federal Government’s Online Gambling Enquiry and anticipate a reduction of gambling advertising when families and children watch television. We support this.
“Integrity Services is a terrific business and its growth demonstrates its high quality and stable earnings.
“Today’s results are solid given market conditions, but more importantly demonstrate that the Company is on track to significantly improve performance over time. The Australian wagering market is healthy, we’re confident it will return to growth and Tabcorp’s position in it will be much stronger when it does.”
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