Australian racing and wagering giant Tabcorp has reported a net loss after tax of AU$1.36 billion (US$925 million) for the year ended 30 June 2024, impacted by a non-cash impairment of AU$1.38 billion (US$966 million) on its core Wagering & Media segment.
The impairment is increased from the AU$644.5 million (US$438 million) impairment recognized in the company’s interim results and relates primarily to its NSW and South Australian assets.
The increase in impairment, Tabcorp said, is due to a slower than expected recovery in the Australian wagering market observed over the past six months, driven by higher inflation and interest rates which has impacted consumer spending on wagering activity, as well as a tightening of the regulatory environment. The company also noted an increase in opex in FY24 and expectations of persistent cost inflation that has impacted the opex outlook.
Impairment aside, group-wide revenue of AU$2.34 billion (US$1.59 billion) was 3.9% lower year-on-year due to the soft market conditions, while higher costs saw EBITDA fall by 18.7% to AU$317.7 million (US$216 million). Net profit after tax was down 66.8% to AU$28.0 million (US$19.0 million)
Revenue in the Wagering & Media segment fell by 3.0% to AU$2.16 billion (US$1.47 billion), with digital wagering revenue down 2.2%. Media revenue declined 6.2%, reflecting the impact of lower wagering market turnover on domestic digital distribution revenues, Tabcorp explained.
“Tabcorp has a unique asset base which can ultimately create a complete sports entertainment experience for our customers and unlock value for shareholders,” said Managing Director and CEO-Elect, Gillon Mclachlan.
“The challenge of connecting those assets to continue executing on the opportunities they present is what I find appealing about the opportunity for the Company going forward.
“The Company has done a good job at building solid foundations since demerger and there is no doubt TAB is competing better in the market. The product is better, speed to market has improved, the retail offering is being revitalised and we’re achieving structural reforms that will make the company more competitive.
“The foundations to unlock value have been built. But the reality is the company is only part way through a turnaround, and we need to continue to enhance execution to create greater value.
“It is clear the business will not meet its TAB25 targets. It is my job to unlock an enhanced cadence with a focus on people and capability. As we evolve, we’ll be better placed to continue executing on the growth opportunities.
“Today’s results demonstrate a competitive performance in the soft market conditions we face. It shows customers are responding to the improved product offering and there’s no doubt the business is more competitive today than it was at demerger, but it’s not where it ultimately needs to be. It will require change but the goal remains unchanged.
“The building blocks are there to create the complete sports entertainment business. To achieve this, there will be a new cadence at Tabcorp which will ultimately unlock significant value for shareholders.
“Importantly, I want to stress that customer safety is personally very important to me. The evolution of technology and our processes to identify problem gamblers faster will not be compromised as we unlock additional value within the company.”
Tabcorp has declared an unfranked final dividend of 0.3 cents per share for FY24, payable on 20 September 2024.
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