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Australia’s Tabcorp has post phenomenal revenue this year

Australia’s Tabcorp has finally some good news to share. The company disclosed its revenue for the last financial year which ended on June 30 and it has racked up Aus $5.5bn or USD$3.71b. The growth is impeccable if one notices and it is believed that the lottery revenue has offset the struggling revenue of Wagering and Media division.

The result looks more promising when it is done pro forma basis. The combined result of Tabcorp and Tatts year to year is 8.7%. On 14th December 2017, the Tatts Acquisition was closed and the result of 2017-18 of Tabcorp reflected the closure of Sun Bets Joint Venture as well. From that point, the revenue is up by 45.9%. The net profit for Tabcorp is now AUD$362.5m.

The lottery and Keno Divisions are the primary earners for the Tabcorp’s revenue. The revenue reflects, AUD$2.9b came from these divisions which are accounted for 52.2% of total revenue and an increase of 22.8% on year on year basis for the company as well. However, Powerball game has been reinvigorated in the Australian market and it has been the standout performer for Tabcorp as well. It accounted for 28% of the revenue. David Attenborough, Chief Executive and Managing Director of Tabcorp said that the company has invested and focused on sustainable growth for digital and Retail channels along with game innovation.

The cross-sell to other games has also significantly increased as a result of it. One can find the example on Monday and Wednesday Lotto Draws, it accounts for 27% revenue with Saturday lotto draws. The Set for life has 87% of revenue to quote one of the other examples for the same. Digital revenue has seen mammoth growth and is growing at 73.5% on year on year basis. It now accounts for 23.5% of the lottery revenue. The active players have also increased to 3.3m which is an increase of 22.2% in the last year.

Wagering and Media have suffered a big dent this year, however. The Pro-forma revenue was down by 3.6% to AUD$2.3b on year on year basis. Tabcorp had a joint venture with Victoria Racing Industry and if that is factored then the revenue is AUD $2.4b which is 4.4% lesser than last year. The turnover for the Wagering and Media also fell by 1.2% to AUD$16.1b this year. The rise of digital turnover, however, has offset the loss. Digital turnover grew by 7.7% and now the Digital accounts for 44.6% of TAB revenue.

It did not look good for the UBet which was acquired through Tatts merger. The revenue was down by 7.7% to AUD$517.1m this year. However, it is still the retail first for TAB and only 34.1% is accounted for digital revenue from UBet. David Attenborough said that UBet is one of the focus for the company and it should be aligned with the Tabcorp by the second half of 2020 financial year. Apart from UBet, Max gaming services also saw revenue fall of 3.5%, but the expiry of contracts to Victoria may have been the major factor for that.

Once, all the revenue related costs are out of the equation, then the variable contribution of Tabcorp is UD$2.0b for this year which is 3.9% more than the previous year. The operating cost has increased by AUD$914.5m and the revenue is up by 7.6 % on a Pro-forma basis after equating the tax, depreciation, and amortization out.

As per David Attenborough, the EBITDA Synergy of $64m has been delivered over the year for merging of the business of Tabcorp and Tatts. The mid-year target of it was $55m.

Source: https://www.igamingbusiness.com/news/lottery-offsets-wagering-weakness-tabcorp-fy-results

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About the author

Debopom Sanyal

Debopom Sanyal

Debopom is a web journalist and news enthusiast. He has been writing about world politics, science, health, finance, and technology. An avid sports enthusiast, Debopom has done his Masters in Finance and Bachelors in Engineering.

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