Tabcorp in ‘strong recovery’ after COVID challenges

22 February, 2021 by Andy Young

Tabcorp is working on a strong recovery after the challenges of operating in the COVID-world were laid out in its results for the first half of its financial year.

Overall group revenue was down 1.5 per cent while EBITDA was down 6.2 per cent on the prior corresponding period, which the company said was primarily due to COVID-19 impacts. But looking forward, Managing Director David Attenborough said that all businesses within the group are well positioned for the second half.

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“We are experiencing a strong recovery following the recent market challenges,” Attenborough said. “The COVID-19 pandemic continued to impact Tabcorp’s group earnings in 1H21, with the retail closures and restrictions, especially in Victoria, having a material impact.

“However, we are pleased with the way our teams and partners responded to the substantial operational challenges the pandemic presented.

“COVID-19 has clearly demonstrated the importance of serving customers with a seamless, multi-channel experience. Investments made to modernise our digital offering in recent years drove significant benefits.

“Our Lotteries & Keno business delivered strong digital growth and an excellent performance across the whole portfolio, including the refreshed Set For Life and Saturday Lotto games. Over the last three years we have demonstrated a strong track record of refreshing and relaunching lottery games to grow customer engagement and rejuvenate the player experience.

“Our Wagering & Media business also delivered strong digital growth; however its earnings were impacted by the COVID-19-related shutdowns and restrictions, especially in Victoria. These factors also heavily impacted Gaming Services and substantially diminished its ability to generate revenues in the period.

“After taking actions to reduce costs, preserve cash and strengthen the balance sheet over the past 12 months, Tabcorp is emerging from the COVID-19 challenges in a stronger financial position. This has allowed us to resume paying dividends to shareholders. Eligible shareholders will receive an interim dividend of 7.5 cents per share fully franked, in line with the previously announced revised dividend payout policy.”

With social distancing regulations in place in gaming rooms nationwide, and various lockdowns it is perhaps no surprise to see Tabcorp’s Gaming Services division impacted in the first-half, with revenues down 51 per cent to $73m and EBITDA down 66.7 per cent to $22m.

Tabcorp said: “Gaming Services suspended all material fees during the shutdown in support of licensed venue partners. With venues operating again, fees are being scaled up progressively to return to pre-COVID-19 levels.

“In parallel, the business is executing against its turnaround plan, addressing its cost base and significantly reducing capital expenditure. Gaming Services will continue to prioritise lifting profitability and performance, while also supporting licensed venues to emerge strongly from COVID-19.”

In the group’s other divisions, Wagering & Media revenues were $1,189m, up 0.8 per cent, and EBITDA was $227m, down three per cent. Digital turnover grew 43 per cent and digital revenue grew 34 per cent on the pcp.

Lotteries & Keno revenues were $1,609m, up 1.6 per cent on the pcp, and EBITDA was $311m, up 5.4 per cent on the pcp.

Attenborough added: “Tabcorp has an improved financial position and outlook as we emerge from the challenges of COVID-19.

“All three businesses are well positioned for the second half and we will continue to unlock digital growth, drive operational improvements and optimise costs.

“We are committed to working with our industry partners to help them recover from the disruption COVID-19 has had on their operations. We are also committed to helping our industry partners reconnect with their customers and reinvigorate venues and racetracks across Australia.”