Tabcorp Holdings Limited (ASX: TAH) today released its half-year results to the market for FY19, with its revenue up 6.1% and EBITDA up 9% on a pro-forma basis. Click here to learn what EBITDA means.
Tab declared a fully franked dividend of 11 cents per share, which was unchanged from the prior period.
Tabcorp is made up of three key business channels:
- Wagering & Media
- Lotteries & Keno, and
- Gaming Services.
Tabcorp’s revenues were up over 100% from $1.34 billion to $2.79 billion and its net profit after tax (NPAT) came in up over 600%, from $24.6 million to $182.5 million from the prior period. However, Tabcorp merged with Tatts Group just before the end of the prior period on 14 December 2017, with Tatts Group contributing just 18 days to half-year results in FY18. The results are skewed.
Lotteries & Keno Results
Tabcorp’s Lotteries & Keno revenue was $1.41 billion and EBIT was $210 million. With the lottery part of the business being derived from the merger with Tatts Group, it is impossible to compare to the prior period when combined with Keno, which Tabcorp held prior to the merger.
Wagering & Media Results
In Wagering & Media, Tabcorp’s revenue was up 22.8% to $1.22 billion with EBIT up 33.8% to $159.6 million. It is again difficult to compare to the prior period as only 18 days of the UBET revenues from Tatts Group were included in the prior period.
Revenue was up 69% to $155.8 million with EBIT up 30.8% to $37.4 million. Once again, it includes the Tatts Max and Maxtech businesses for 18 days in the prior period making it difficult to compare.
Headwinds For Tabcorp’s Wagering & Media Business
The Tabcorp retail shop outlets where people place bets over the terminal with cash are slowly becoming obsolete as customers embrace mobile apps, which quickly allow them to deposit money and place a bet.
Even on-course bookmakers are a dying breed due to the online corporate bookmakers, with people trackside at the races electing to bet on their phones.
Given Tabcorp recently exited its online UK venture Sun Bets at a loss and closed its local online book Luxbet in December 2017 with the merger of Tatts Group, there are questions around Tabcorp’s ability to successfully compete in the online space.
As it is at the moment, Tabcorp is losing the online game to the UK corporate bookmakers Paddy Power and Bet365.
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