An eventful year sees Tatts post $220.5m profit

25 August, 2017 by Andy Young

The Tatts Group, Australia’s largest non-casino gambling group, has reported a statutory after-tax profit of $220.5m, which is 5.7 per cent down on last year.

Tatts has highlighted reasons behind the drop including a strong year in 2016, plus significant merger costs ($23.4m net of tax), a $137.8m revenue ‘hit’ from a markedly lower jackpot run (with only 31 major jackpots compared to 45 last year), and, poor weather on the racing calendar.

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On a continuing operations basis (before merger costs) the Group reported an equally robust result – booking an after-tax profit of $244.6m.

In announcing the result Robbie Cooke, Tatts’ Managing Director and CEO, said: “To say it has been an eventful year at Tatts would be an understatement.

“The combination of winning our bid for the Victorian lotteries licence for a further 10 years, successfully commencing the roll out of our new monitoring platform for the +90,000 slot machines in New South Wales, doing all things possible to beat FY16’s record lottery result, opening more than 320 refurbished UBET outlets under our retail renewal program, installing about 2,200 new wagering point of sale terminals, commissioning almost 270 UBET cash handling self-service terminals, launching our new charitable games operating unit to further lift our contribution to good causes, and a host of other business initiatives, all made for an extremely busy and exciting year.

“Add to that mix the proposed merger with Tabcorp – an activity which of itself was all consuming – and I can say with no hesitation the team at Tatts has been operating at maximum capacity. We have absolutely not allowed the uncertainty that transformational M&A inevitably brings disturb our momentum.”

On announcing the result, Tatts noted its powerful start to the 2018 financial year – benefiting from an Oz Lotto jackpot run leading into the new year underwriting a 25 per cent lift in after-tax profits for the month of July.

Looking ahead, Cooke added: “As in past years we are not providing specific profit guidance for FY18. However, in terms of how trading performance year-to-date is concerned I can say we have started the year extremely well with our continuing operations net profit after tax for July – based on unaudited management accounts – up 25 per cent on last year.

“This performance has benefited from the Oz Lotto jackpot sequence in July which culminated in a $50m jackpot on the 18th of the month. Clearly how the balance of the year plays out will very much depend on the jackpot roll and it is too early to make a definitive call.”