Tabcorp Holdings Limited 

TAH Details

Financial performance is impacted by significant items: For FY17, the group reported a 2.1% yoy growth in statutory revenue at $2,234.1 million, while posting a net loss after income tax at $20.8 million compared to a statutory NPAT of $169.7 million for the prior financial year. Although, the Core businesses (TAB, Media, Gaming Services and Keno) performed rationally during the year, results were adversely impacted by significant items after tax of $199.7 million. Significant items include the AUSTRAC civil proceedings and Australian Federal Police Cambodia investigation, the proposed combination with Tatts Group (including the impact of the Tatts cash-settled equity swap), the Intecq acquisition, and Melbourne premises relocation. Excluding significant items, NPAT stood at $178.9 million, 3.8% below the previous year, and EPS was 21.4 cents per share, 4.5% below the prior year. The Group made investments in acquiring Intecq, establishing Sun Bets, and progressing the combination with Tatts Group, which expects to complete by the end of the year. Further, the company has accelerated its digital investment in Wagering and Media and Keno businesses, while Gaming Services continued to expand geographically. The key digital and fixed odds performance metrics in core TAB business remained very strong, with double digit turnover growth, while overall Wagering & Media performance impacted by underperformance in Luxbet and Trackside.


FY17 Financial summary; (Source: Company reports)

The core TAB business performed well as total TAB turnover growth was 1.9% yoy, underpinned by the growth in digital turnover of 13.9% yoy and total TAB fixed odds revenue growth was 15.0% yoy, including 20.8% yoy growth in racing. Notably, in an increasingly competitive landscape, media revenue grew 1.9% and all key racing broadcast rights were secured for continued broadcast on Sky Racing. Gaming Services revenues, which include seven months of Intecq trading grew by 34.2% yoy to $143.9m in FY17, while EBITDA grew by 17.1% yoy to $82.1m. Excluding Intecq, revenues were up 7.8% and EBITDA was up 4.0%, driven by the commencement of several new venues in NSW, including Panthers Group from February 2017. Keno revenues grew by 2.0% yoy to $212.7m in FY17, while EBITDA was $72.0m, up 2.4%. Keno achieved total turnover growth of 3.6%, with robust performance in NSW, Victoria and ACT, which was partially offset by softness in Queensland. A range of new customer initiatives have recently been introduced, including the launch of Mega Millions in NSW and the ACT and a digital offer, including in-venue play in NSW. Importantly, Keno has signed up 13,400 digital account customers. The UK start-up Sun Bets recorded an FY17 EBITDA loss of $46.2m, and following the establishment phase, the leadership and operations have been reset to improve the positioning of the business for FY18 as it is focusing on customer acquisition and product development. The increase in overall group’s operating expenses was driven by the acquisition of Intecq and planned investments in capability, technology, marketing, risk and compliance.
 

TAH Daily chart; (Source: Thomson Reuters)

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