Tabcorp Holdings Releases Its Half-Year Results for FY 2019

Australian gambling entertainment company, Tabcorp Holdings Limited (ASX: TAH) has released its first results for FY 2019. The company has reported a statutory revenue of $2,787.4 million for 1H FY 2019, which is 108.3% higher than the previous corresponding period (pcp). Further, the proforma revenue and EBITDA of the company are 6.1% and 9.0% higher than pcp, respectively.

The statutory Net profit after tax (NPAT) of the company increased by $24.6 million to $182.5 million in 1H FY19 as compared to pcp. While commenting on the half-year results, the company Managing Director and CEO David Attenborough told that the company has delivered a strong financial result in 1H FY19 on the back of the diversification benefits from the combination with Tatts.  Currently, the company is focusing on ensuring a strong and aligned risk-aware and performance culture centered around its new purpose of ‘Excitement with Integrity’ According to Mr. David, the company is well positioned for 2019 and beyond.

During the half year period, the Lotteries & Keno revenues increased by 18.1% to $1,409.2 million as compared to Pro-forma pcp. Further, the EBITDA increased by 26.3% to $252.2 million as compared to Pro-forma pcp.

During the half year period, Wagering & Media revenues decreased by 3.8% to $1,221.8 million as compared to Pro-forma pcp. Further, the EBITDA was $230.6 million, down 3.7% vs Pro-forma pcp.

The gaming services revenues of the company came in at $155.8 million in 1H FY19, down 4.0% vs Pro-forma pcp. EBITDA from gaming Services was $73.8 million, down 8.0%, vs Pro-forma pcp.

The Board has declared a fully franked interim dividend of 11.0 cents per share which is having a register date of 19 February 2019 and payment date of 13 March 2019. The FY 2019 dividend payout ratio target is 100% of NPAT before significant items, amortization of the Victorian wagering and betting licence, and purchase price accounting.

For the half-year period, the company has delivered EBITDA synergies and business improvements of $24 million. For FY 2019, the company is expecting the EBITDA synergies and business improvements of $55 million. For FY 2021, the company is targeting EBITDA synergies and business improvements of $130m-145m with cost synergies of $95 million.

According to Mr.  David Attenborough, the company’s priority is to drive business performance through continued investment in customer experience, product and digital innovation. Further, the company is going to maintain a disciplined approach to operating expenditure, capital investment and balance sheet management with a focus on driving sustainable shareholder returns.

On 13 February 2019, the company announced the retirement of its Chief Financial Officer (CFO) Damien Johnston. As per the release, Mr. Damien Johnston has advised that he intends to retire in FY 2020.

In the past six months, the share price of the company decreased by 1.65 percent as on 12 February 2019 and trading at a PE multiple of 251.05x. TAH’s shares traded at $4.560 (-4.403% intraday) with a market capitalization of circa $9.61 billion as on 13 December 2019 (AEST 04:00 PM).


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