Tabcorp Manage Modest Profit Despite Lacklustre Wagering Unit

Despite a lacklustre wagering unit and an “unsatisfactory” performance by its gaming services division, Australian gambling operator Tabcorp Holdings managed a modest profit gain in its H1 fiscal.

Figures released Tuesday show Tabcorp’s overall revenue rose 4.4 percent year-on-year to AU$2.91b (US$ 1.95b) in the final six months of 2019 while earnings (before significant items) rose 2.1 percent to AU$596.5 m and net profit after tax rose 2.9 percent to AU$213.5 m.

Tabcorp is still trying to integrate the activities of former lottery and betting competitor Tatts Group bought by Tabcorp a few years ago. Tabcorp CEO David Attenborough told investors that the business was in “the final phase of the long and complex process” of merging the activities of the two companies while promising that the synergies needed were just around the corner.

The main division of Tabcorp’s Lotteries & Keno posted a 12.4 percent increase in H1 sales to AU$1.58b, while earnings increased to AU$295 m by 16 percent. The omni-channel push of the lottery unit is still trying to redress the matter, as digital turnover increased by 39.8%, while retail sales increased by only 5.2%. Online currently accounts for 26.7 percent of lottery revenues, up two years ago from 15.6 percent.

A string of mega-jackpots, including an unprecedented AU$150 m Powerball prize, boosted lottery sales. Revenue from Keno was not able to keep pace but managed a modest 1 percent increase.

The division Wagering & Media is still struggling, with sales dropping 3.7 percent to AU$1.18b and earnings slipping 7.8 percent to AU$233.8 m. It was not a case of lucky punters, as both digital (-3.9 percent) and retail(-9 percent) turnover in the company experienced declines.

Tabcorp has partly blamed the declines on the boost the previous H1 got from the 2018 FIFA World Cup, plus the continuing transfer of consumers from the old Tatts UBET brand to the TAB mothership. Tabcorp aims to complete this transformation before the current fiscal year is over, paving the way for a (finally) fully integrated betting network.

Last August, under the umbrella of Long May We Play, the TAB rolled out its latest’ brand position’ and the company claims to have received a “strong early customer response,” but they did not divulge whether the ‘strong’ response was either positive or negative.

Last year, TAB inked a deal to become the exclusive wagering provider for 1,200 ClubsNSW venues, and Tabcorp says the exclusive retail offerings available on its betting app via the new’ Venue Mode ‘ helped boost digital in-venue betting by more than a fifth year-on-year.

As for the Gaming Services division of Tabcorp, revenue dropped to AU$149 m by 4.4 percent and earnings dropped to AU$66 m by 14 percent due to contract expiries and renewals at lower daily rates. Attenborough called this performance “unsatisfactory” and the firm is “reviewing this business to improve its performance and realise its full potential.”