Image source: © Asolano97 | Megapixl.com

Highlights

  • Tabcorp Holdings operates two segments, wagering and media, and gaming services
  • In 1HFY24, the company registered 5.1% YoY decline in revenue to AUD 1,210 million
  • In FY24, the company expects to spend AUD 150mn on CAPEX

Australia-based Tabcorp Holdings Limited (ASX: TAH) is an entertainment and gambling corporation. The company operates two segments, gaming services and wagering and media. The wagering and media segment offers customised and fixed odds betting, worldwide racing media enterprises and retail wagering networks.

In the first half of the financial year (1HFY24), the company saw 5.1% YoY decrease in its revenue to AUD 1,210 million. During the reported period, EBITDA stood at AUD 170 million, compared to AUD 197 million in previous corresponding period, while NPAT reached AUD 18 million, compared to AUD 47 million in previous corresponding period. In 1HFY24, tab total revenue market share was 33.7%, compared to 32.9% in 1HFY23.

Recent business update

Through an ASX update, dated 14 March 2024, the company notified about the resignation of its Managing Director and CEO, Adam Rytenskild.

Outlook

The company expects to deliver its TAB25 strategy successfully which would result in increased market share and enhanced VC margin. The new Victorian license which would become effective in August 2024, promises competitive gains and substantial earnings.

In FY24, the company expects to do CAPEX of up to AUD 150 million.

In 2HFY24, OPEX is expected to increase by around 1% and the focus is on achieving upper limit of the existing FY24 opex guidance range.

Key drivers for consumer discretionary sector

The data shared by the Australian Bureau of Statistics (ABS) on 14 March 2024, indicated that payroll jobs has increased by 2% in Australia in the month to 17 February 2024. Another set of data shared by ABS highlighted that the arrivals of short-term visitors in Australia has surged by 46.4% annually to 603,770 in January 2024. Both overseas arrival and payroll data bode well with the consumer space, as it would result in increased consumer spendings on discretionary items.

Millennials and generation Z have a preference for experience over material possessions have impacted industry like travel and leisure considerably.

Share performance of TAH

TAH shares closed 4.83% higher at AUD 0.76 apiece on 18 March 2024. Including today’s gain, TAH’s share price has dropped by almost 22.45% in the last 12 months and has increased by 3.40% in the last three months.

The 52-week high of TAH is AUD 1.165, recorded on 5 June 2023, while the 52-week low is AUD 0.61, recorded on 22 February 2024.

TAH Daily Technical Chart, Source: REFINITIV

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 18 March 2024. The reference data in this report has been partly sourced from REFINITIV.