Australian racing and wagering giant Tabcorp has announced a significant net loss after tax of AU$1.36 billion (US$925 million) for the fiscal year ending June 30, 2024. This substantial loss is primarily attributed to a large non-cash impairment of AU$1.38 billion (US$966 million) related to its core Wagering & Media segment. The impairment, which marks an increase from the AU$644.5 million (US$438 million) recognized in the interim results, reflects ongoing difficulties in the Australian wagering market.
Revenue and Profit Margins
The financial performance for FY24 reveals a notable decline in revenue and profit margins. Tabcorp’s total revenue for the year amounted to AU$2.34 billion (US$1.59 billion), representing a 3.9% decrease compared to the previous year. This decline is attributed to softer market conditions that have affected both revenue and operating expenses.
Operating expenses (opex) saw an increase, and the company is facing expectations of continued cost inflation, which has impacted its overall financial outlook. As a result, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) fell by 18.7% to AU$317.7 million (US$216 million). Net profit after tax also experienced a dramatic decrease, down 66.8% to AU$28.0 million (US$19.0 million).
Wagering & Media Segment Performance
In the Wagering & Media segment, Tabcorp reported a revenue decline of 3.0%, bringing the total revenue for this segment to AU$2.16 billion (US$1.47 billion).
Strategic Response and Future Outlook
Gillon McLachlan, the Managing Director and CEO-Elect, provided insights into the company’s strategic response and future direction. McLachlan acknowledged the tough market conditions driven by high inflation, rising interest rates, and a more stringent regulatory environment. He noted that these factors have led to slower-than-expected recovery in the Australian wagering market and increased operational costs.
McLachlan emphasized that while the company will not meet its TAB25 targets, there is a clear focus on enhancing execution and unlocking growth opportunities. He stressed the importance of maintaining progress in technology and processes to ensure customer safety, especially in identifying problem gamblers.
Dividend Declaration
In light of the financial challenges faced during FY24, Tabcorp has declared an unfranked final dividend of 0.3 cents per share. This dividend is set to be payable on September 20, 2024.
Tabcorp’s financial results for FY24 underscore the significant impact of external market factors and internal challenges on its performance. The substantial impairment and revenue decline reflect the broader difficulties within the Australian wagering market. However, with a strategic focus on improving product offerings, enhancing competitiveness, and ensuring customer safety, the company aims to navigate its current challenges and unlock future value for shareholders.