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Tabcorp posts bumper profits after Tatts merger

Fri, Aug 16, 7:57am by Staff Writer

Tabcorp has posted mammoth profit increase in its first full-year of combined operations with the Tatts Group.

News.com.au reports that the profit for the gambling giant is 12 times greater than a year ago to $362.5 million.

Revenue rose to $5.5 billion in the 12 months to June 30, a spike of 46 per cent, with its biggest business, lotteries and keno, hitting a record $2.86 billion revenue following digital growth and a string of favourable jackpots on the new Powerball game, as well as at Oz Lotto and Lucky Lotteries.

The lotteries result more than offset a weaker performance by the company’s wagering and media business, which is in the first year of a three-year integration that includes 1,300 UBET retail venues in Queensland, Tasmania, South Australia and the Northern Territory to TAB.

Wagering and media revenues rose 9 per cent to $2.3 billion on a statutory basis, with active customer numbers up 2.5 per cent to 538,000.

Chief executive David Attenborough said the first full year of the Tabcorp-Tatts combination proved the benefits of the merger.

“Our businesses have a clear set of priorities to build on their competitive advantages and drive long-term profitable growth,” Mr Attenborough said.

Tabcorp lifted its final dividend by 1 cent to 11 cents per share, fully franked, for a total dividend of 22 cents.

The result came as chairman Paula Dwyer flagged she would be standing for re-election at the 2019 annual general meeting, but has plans to retire from the role by 2021 as part of a board renewal process.

High-profile director Ziggy Switkowski has also expressed his intention to retire from the Tabcorp board by the 2020 AGM.

The company said on Wednesday its integration with Tatts had delivered $64 million in earnings from savings and business improvements, exceeding the company’s revised mid-year target of $55 million.

The majority of integration activities are expected to be completed by the end of the 2020 financial year, with the company maintaining a target of between $130-145 million in savings in the 2021 financial year, as announced in February.

Tabcorp’s results included a $25.3 million after-tax expense, with compensation from Queensland’s new point of consumption tax more than offset by $24.1 million in implementation costs and $11.8 million in arrangement costs to Racing Queensland.

An extra $20 million after-tax expense could flow if Queensland’s racing body is successful in arguing that UBET underpaid fees following the new tax.

The matter is before the state’s Supreme Court, with Tabcorp and UBET telling shareholders that, on the balance of probability, no further provision is required.

Shares in the company dipped and dived on Wednesday and were trading 0.23 per cent higher at $4.38 on Thursday afternoon.

Keno set for an upgrade with Wave terminal

An American lottery and gaming innovator and one of Australia’s most popular wagering companies are pairing up.

Scientific Games Corporation and Tabcorp Holdings Limited have announced a partnership that will upgrade the popular Keno product.

Las-Vegas headquartered Scientific Games Corporation announced last Friday that the deal will involve some of its Wave retail cabinets, which offer competitors the chance to take home cash prizes worth up to $1 million for as little as a one-dollar stake.

The Global Strategic Accounts President for Scientific Games Corporation Michael Conforti declared that his firm has so far deployed approximately 80,000 of its Wave terminals with partners around the world.

He went on to say that the innovative units have been designed with ‘advanced ergonomics’ and come in ‘a variety of sizes’ in order to help retail clients get the most from their operations.

“With the upgrade to these advanced retail terminals for keno players Tabcorp Holdings Limited is again demonstrating its commitment to enhancing the player experience,” Mr Conforti said.

Melbourne-based Tabcorp Holdings merged with local rival Tatts Group Limited in December 2017.

The Keno General Manager for Tabcorp Holdings Limited Terry Fowler described Scientific Games Corporation as ‘a valuable business partner’ that has already helped his firm’ to develop and enhance our Keno business in Australia.”

“We appreciate Scientific Games Corporation’s global gaming expertise as well as its technology innovation and commitment to responsible gaming. Our Keno players will enjoy a more modern experience with new Wave terminals,” Mr Fowler said.


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