Tabcorp returns to profit on digital sales growth
CEO David Attenborough says “long-term strategies are about integration in the retail environment” despite online revenue increase
Tabcorp swung to a net profit of A$28.7m in 2017/18 driven by an increase in digital sales and betting activity during the World Cup following its merger with Tatts Group.
The Australian wagering giant also reported an annual revenue increase of 71% to $3.8bn, up from $2.2bn last year as EBIT rose to $241.4m from $101.6m.
The upsurge in net profit, up from a $20.8m loss last year caused Tabcorp’s share price to increase by 7.5% in early trading.
The profit figure could have been significantly higher if not for costly outlays of $217.5m, including additional merger costs, an annual loss of $38m for Sun Bets and its struggling Luxbet operation.
Sun Bets ceased trading in July while Luxbet’s online offering was closed in December.
Tabcorp CEO David Attenborough
Online revenue for Tabcorp’s leading wagering brand TAB increased by 16.3% and hit a digital turnover of $5bn, compared to a 3.3% drop in retail revenues.
Digital sales also rose strongly in Tabcorp’s lottery business which was strengthened significantly by the Tatts merger, growing 27.8% and accounting for nearly 18% of total sales.
Despite evidence of a customer shift towards online betting and gaming, Tabcorp CEO David Attenborough has ruled out a change in strategic approach.
He said: “Retail betting is really at the heart of a lot of Australian communities like their local pub and club.
“We do not see a development where you end up with digital without retail, and all our long-term strategies are about the integration within the retail environment,” he added.