By Andy Young
Tabcorp has suffered a 33.1 per cent drop in profits as legal fees and the cost of its partnership with News UK hit in the first half of its 2016 financial year.
Tabcorp’s net profit after tax for the first half of the year dropped to $81.9 million, down 33.1 per cent on the prior corresponding period. That figure was hit by $15.6m of “significant items”, namely $7.2m in defending non-compliance claims laid by the federal government and $8.4m for the UK betting partnership.
If those items are removed from the results, Tabcorp’s profits rose to $97.5m, an increase of 7.3 per cent on the same period last year.
Tabcorp managing director and CEO David Attenborough said: “We made good progress against our strategy in the half, executing a number of initiatives that position the business for further growth. The Board has announced an interim dividend of 12 cents per share, fully franked, and up 20 per cent, reflecting our ongoing focus on delivering strong returns for shareholders. We remain well positioned to drive future performance, maintain expense discipline and achieve 14 per cent Return on Invested Capital by FY17.
“Our Wagering and Media business reported increased revenues from racing, which remains the core of our business. This was despite increased competition. We have continued to invest in growth initiatives by delivering new products, such as Partial Cash Out, channel enhancements and the expansion of international vision and pooling.
He added: “During the period we extended Tabcorp’s international reach through a partnership agreement with News UK to launch Sun Bets. This is an exciting opportunity for Tabcorp to take its market-leading wagering capabilities into the A$7 billion UK online gambling market.
“The Keno business returned to growth in the half, benefiting from the brand relaunch and enhanced customer experience. Pleasingly, Gaming Services continues to grow on the back of further venue sign-ups.
“As of 31 December 2015, Tabcorp adopted an enhanced AML/CTF program covering all of our operations. A dedicated AML/CTF team has been established and Clinton Lollback commenced as Chief Risk Officer last month.”
Tabcorp reported that its TAB Racing revenues were up two per cent to $895.3m, while revenues from the group’s Gaming Services business, TGS, were $52.9 million, up 4.3 per cent.
Keno revenues were $109.7 million, up 5.7 per cent and retail turnover was $3,388.4 million, down 1.4 per cent.
The Tabcorp board also announced an interim dividend of 12 cents per share, fully franked, payable on 16 March 2016 to shareholders registered at 11 February 2016.