Online punting surge softens COVID-19 blow for Tabcorp as profits slide 7%
Wagering giant Tabcorp’s half-year net profit has fallen 7 per cent, with a surge in online betting and growth in its lotteries business softening the blow from COVID-19 shutting much of its retail bookmaking operations.
The $10 billion group on Wednesday morning announced a profit of $185 million for the six months ended December 31, compared to $199 million in the same period a year earlier.
Retail wagering turnover was down 28 per cent in the half, which was recovered by a 43 per cent jump in online betting. Total revenue from Tabcorp’s wagering and media business rose 0.8 per cent while earnings were down 3 per cent, as it had to be more generous with customers amid fierce competition from online bookmakers including Sportsbet and Ladbrokes.
Tabcorp’s lotteries business grew revenue by 1.6 per cent and earnings by 4.9 per cent. Revenue was down 1.6 per cent across the group.
“COVID-19 has clearly demonstrated the importance of serving customers with a seamless, multi-channel experience,” Tabcorp Managing Director and CEO David Attenborough said. “Investments made to modernise our digital offering in recent years drove significant benefits.”
Tabcorp also resumed paying dividends, announcing a 7.5¢ half-year payout, which Mr Attenborough said was the result of the group “taking actions to reduce costs, preserve cash and strengthen the balance sheet” so it could emerge from COVID-19 stronger.
Speculation about Tabcorp’s future has been high after global wagering giant Entain, which owns Ladbrokes, offered to buy its underperforming TAB bookmaking arm for a speculated $3 billion and US private equity outfit Apollo also lobbed a bid.
The offers would see Tabcorp broken up with the listed entity retaining only the booming lotteries arm, which it only acquired three years ago through an $11 billion merger with the Tatts Group.
Tabcorp said on Wednesday that the approaches remained “highly conditional and subject to numerous requirements including due diligence, financing and various regulatory and racing industry approvals”.
“The board will take the appropriate time to carefully consider all of the relevant issues and strategic options that arise in respect of these matters,” the company said.
Business reporter at The Age and Sydney Morning Herald.
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