Australia gaming giant Tabcorp has posted a slight revenue gain during its H1 performance despite an “unsatisfactory” performance from its gaming services division.
The firm, which reports total implementation costs of Tatts, acquired in 2017 for approximately AU$11bn, has soared over 40 per cent, posted a revenue increase of 4.4 per cent to AU$2.91nb (2018: AU$2.79bn). EBITDA grew 2.1 per cent to AU$596.5m (2018: AU$584.1m).
David Attenborough, Tabcorp managing director and CEO, asserts that the integration of Tatts and its Ubet brand remains on track to deliver up to $145m of EBITDA synergies and business improvements in FY21.
However, implementation costs are expected to reach $135m, versus a previous guidance of $95m, which the firm states it due to the deployment of additional resources to manage the “increased complexity and associated risk” to ensure a successful migration to the TAB platform.
“We are in the final phase of integration and look forward to realising the full benefits of the combination for shareholders, industry partners and customers over coming years,” Attenborough said.
“We will continue to strengthen our unique omni-channel model, with investments in personalisation, product innovation, digital capability and retail modernisation. In addition, we will advance the company’s strategic agenda in 2H20. This includes the review of gaming services and preparing for a business optimisation program.
“We will also continue to embed the delivery of responsible entertainment in line with our vision to be the trusted gambling entertainment company. As part of this we have increased our support of the racing industry to drive the highest standards of animal welfare. We are also investing in capability that raises the bar on responsible gambling with a trial of artificial intelligence technology to improve age verification in TAB agencies.”
Tabcorp’s gaming service division saw revenue decline 4.4 per cent to AU$149m, with EBITDA down 14.1 per cent to AU$65.9m. The company states that the business is under review to improve performance, including capital efficiency and realise full potential.
Lotteries and Keno revenue jumped 12.4 per cent to AU$1.58bn, with earnings boosted 16 per cent to AU$294.9m. Tabcorp lauded an omni-channel strategy that has “gathered momentum” to grow 39.8 per cent to account for 26.7 per cent of total lottery sales, up from 15.6 per cent two years ago.
The company’s wagering and media segment saw declines across both revenue and EBITDA; the former falling 3.7 per cent to AU$1.17bn with the latter declining 7.8 per cent yo AU$233.8m.
“Tabcorp’s diversified group of businesses delivered a solid overall result in the first half of FY20. We grew group revenues by 4.4 per cent in an environment of soft discretionary spending, while undertaking significant integration activity. We also welcomed another 300,000 active registered customers during the period,” Attenborough added.