Tabcorp flags massive losses due to COVID-19
One of Australia’s biggest betting companies has flagged huge losses caused by the COVID-19 pandemic.
News.com.au reports that Tabcorp has warned the downturn caused by the coronavirus pandemic has slashed the value of its business by more than $1 billion.
In an update provided to investors on Monday morning, Tabcorp said its financial results for the year ended June 30 would incur a $1 billion to $1.1 billion non-cash impairment charge.
It said the charge had dented the value of it goodwill and was a direct impact of government measures imposed to curb the transmission of COVID-19.
A large proportion of Tabcorp’s sports betting and lotteries businesses were impacted by venue closures and the suspension of sporting fixtures across Australia.
The company also noted the expense to the business was partly a result of accelerated retail contraction and uncertainty about how long the pandemic would last.
Tabcorp’s outgoing chief executive David Attenborough said COVID-19 had materially impacted its wagering and media business.
“We are facing into a challenging and uncertain environment, and the current operating conditions and those expected into the future are relevant factors in assessing the value of the goodwill in those businesses at this time,” he said.
The group has tipped its profits and earnings for the 2020 financial year will be lower than the previous corresponding period in 2019.
Tabcorp expects to post a net profit between $267 million and $273 million, approximately $130 million lower than the previous financial results in 2019.
It also expects earnings before tax and interest will be in the range of $990 million to $1 billion, which is lower than the $1.124 billion reported in 2019.
“We remain confident in the strength and resilience of Tabcorp’s diversified portfolio of assets and are pleased that integration is now substantially complete,” Mr Attenborough said.
“We are focused on supporting our people and partners during these challenging times, while ensuring Tabcorp emerges strongly post COVID-19.”
Tabcorp CEO to retire next year
Gambling operator Tabcorp has announced David Attenborough will retire from his roles as chief executive and managing director in the first half of 2021.
European Gaming reported in July that Tabcorp will embark on a global search for a new chief executive officer after Mr Attenborough announced his retirement.
The search comes as the company announced that board member Steven Gregg would succeed chairman Paula Dwyer as the company’s chairman when she retires from the board at the end of the year.
“The combination with Tatts is now largely complete and, as such, now is the right time to start the process to appoint the next CEO who can work with the board and management team to take the company forward,” Mr Attenborough said.
“Until then, I am totally committed to steering Tabcorp through the COVID-19 pandemic and ensuring that our businesses are best positioned for the future,” he added.
Tabcorp, which merged with Tatts in 2017 in an $11 billion deal, announced the changes to the Australian Securities Exchange last Thursday.
“With the integration of Tatts nearing completion, the time is now right for a new chairman to lead the Tabcorp board into the future.
“The appointment of Steven Gregg will provide continuity of leadership and an orderly transition as the company identifies and transitions to a new management and chief executive officer,” Mr Dwyer said.
“I look forward to working with my board colleagues and executive team to realise the opportunities Tabcorp has following the Tabcorp-Tatts combination: to drive shareholder returns and the continued trust of our customers, business partner, employees, governments and the broader community,” Mr Gregg said.