Tabcorp (ASX: TAH) has announces some expected FY20 profit numbers and also revealed an impairment charge of at least $1 billion.
Tabcorp has been reviewing the value of its assets on its balance sheet and has announced that it expects to incur impairment charges of between $1 billion to $1.1 billion in FY20.
The impairment relates to the Wagering & Media and Gaming Services businesses. It relates to the COVID-19 impacts on the business, consumers and economy, and the amount of competition and structural change in the Wagering & Media business’ digital market.
FY20 profit guidance
The gambling business announced that it expects FY20 EBITDA before significant items (click here to learn what EBITDA means) will be in the range of $990 million to $1 billion, compared to $1.12 billion in FY19.
Net profit after tax before significant items is expected to be in the range of $267 million to $273 million.
Tabcorp Managing Director and CEO David Attenborough said: “COVID-19 has materially impacted our Wagering & Media and Gaming Services businesses. We are facing into a challenging and uncertain environment, and the current operating conditions and those expected into the future are relevant factors in assessing the value of the goodwill in those businesses at this time.”
Tabcorp is suffering at the moment, but most businesses are right now. I’m not sure how much growth the company can generate into the future. For that reason I don’t think I could invest in its shares. I’d rather go for ASX growth shares, something like Bubs (ASX: BUB).