Tabcorp reports net loss after tax of $417 million

For the six months ending December 31, 2023, Tabcorp, the massive Australian racing and wagering company, reported a net loss after tax of AU$636.8 million (US$417 million).

This was mostly due to a non-cash impairment charge of AU$731.9 million (US$482 million). The wagering operations in South Australia (SA) and New South Wales (NSW) as well as goodwill associated with the wagering and media industry are subject to an impairment charge.

The difficulties facing the Australian gambling industry are considered in this impairment, along with the effects of increased interest rates and taxes in NSW after transitional payments to Tabcorp were stopped in response to the recent hike in the Point of Consumption Tax (POCT) rate in June 2022.

Due to challenging trade conditions, group sales decreased by 5% annually to AU$1.21 billion (US$797 million); however, on a statutory basis, group EBITDA decreased by 14% to AU$170 million (US$112 million). In contrast, Tabcorp issued a declaration of an interim dividend of 1.0 cents per share, indicating its belief in the company’s financial stability and prospective growth.

The Managing Director and CEO of Tabcorp, Adam Rytenskild, highlighted improvements in TAB’s market share and overall operating results to voice optimism about the company’s transition effort. Increasing customer competitiveness, leveling the playing field for fees, taxes, and regulations, and restructuring the cost base for efficiency and growth are the main focuses of Tabcorp’s strategy, Rytenskild emphasized.

Positive developments, such as a rise in overall and digital market shares compared to the first half, were emphasized by Rytenskild as signs of a reversal of the downward trend. He also saw great opportunities to use the nation’s largest integrated wagering and media network, particularly in the digital space, through the company.

It is anticipated that the upcoming Victorian License will significantly increase Victoria’s profitability starting in August, with an estimated pro forma EBITDA increase of AU$140 million for FY23. Initiatives like the Genesis program and an outsourcing partnership with Accenture for IT and organizational processes demonstrate Tabcorp’s commitment to become a more effective and successful business, which sets the company up for future expansion.

Rytenskild emphasized Tabcorp’s commitment to providing excellent customer service, highlighting their partnership with Mindway AI to promptly detect and assist customers who may be at danger of gambling-related damage. Additionally, he voiced support for potential cuts to casino advertising during prime time for families to watch.

Lastly, Rytenskild expressed optimism about the long-term growth potential of the Australian wagering market and Tabcorp’s better position within it, implying that the company is well-positioned to significantly improve performance over time despite current market conditions.

Original story by: IAG