Tabcorp posts €385m losses in H1 of compound AUS challenges

Tabcorp has accrued corporate losses of AU$636m (€385m) as detailed in the interim 2023/2024 accounts of the ASX gambling group.

Statutory losses were attributed to Tabcorp booking impairment charges of AU$731m (€440m) during H1 2023/2024 trading for the reporting period up to 31 December 2023.

As reported: “Non-cash impairment charges relate to certain assets in New South Wales (NSW) and South Australian (SA) Wagering businesses, and goodwill relating to the Wagering and Media Segment.”

Tabcorp notified investors of the key elements factored into the multi-million impairment charges, including higher costs in NSW due to its increased point-of-consumption tax, the impact of higher interest rates on TAB estates, and an overall softer wagering market in Australia – “driven by higher inflation and interest rates impacting consumer spending”.

Period trading saw group revenues drop by 5% to AU$1,210m as Tabcorp’s H1 EBITDA declined by 14% to AU$170m (€100m).

A breakdown of performance saw Tabcorp’s Wagering & Media unit report a 4% decline in revenues and EBITDA down 13% to $134m, with declines attributed to soft market conditions.

Tabcorp continues to invest in revamping TAB’s digital competitiveness, undertaking a rebrand of its flagship subsidiary during H1 trading.

The group’s Gaming Services unit revenues for H124 declined by 14% to $93m, and EBITDA dropped 17% to AU$35m, reflecting a period in which Tabcorp discontinued MAX Performance Solutions and eBet businesses.

The board of Tabcorp stands by the firm’s TAB25 reorganisation strategy to “transform our competitiveness, continuing to improve market share trends and creating a more efficient and effective organisation.”

H2 developments see Tabcorp reserve AU$600m (€360m) in debt facilities, needed for the company to take charge of the exclusive Victoria retail wagering licence for TAB estates.

Group CEO Adam Rytenskild said: “Tabcorp’s transformation is on track. TAB’s improving market share trend highlights this, and the broader operational result demonstrates the substantial progress we have made as a company.

“We continue to focus on the three pillars of our strategy: Invest in customer and competitiveness to win back the Australian market; Level the Playing Field for fees, taxes, and regulation; and reshape our cost base for efficiency and growth.

“Total market share and digital market share grew compared to the prior half. This is another positive step having stopped the decline. We are seeing positive signs from targeted investment in product, brand, data, technology, and retail as we start to leverage the strength of an extensive integrated wagering and media network throughout the country.”