Tabcorp takes A$1bn hit as Covid-19 ravages operations
Australian operator points to retail closures and stiff competition as it writes off a third of its value
Tabcorp is expected to write down at least A$1bn (£545m) in value due to the devastating financial impact of Covid-19.
In a statement to investors, the ASX-listed operator predicted non-cash goodwill impairment charges of between A$1bn and A$1.1bn in its 2019-20 financial results – representing a deprecation of a third of the wagering giant’s total value.
Tabcorp cited the closure of retail establishments and a competitive online gaming market, as well as future economic uncertainty for the accounting charge.
Elsewhere, the operator anticipates EBITDA for FY20 to range from A$990m to A$1bn, and post-tax profit to fall between A$267m and A$273m, marking a decrease of at least 31% from FY19 (A$396m).
Tabcorp CEO David Attenborough, who will step down in H1 2021 following consistent pressure from key shareholders due to underperformance, admitted Covid-19 had “materially impacted” the business, although he remained optimistic for the future.
Attenborough said: “Covid-19 has materially impacted our wagering and media and gaming services businesses. We are facing a challenging and uncertain environment, and the current operating conditions and those expected into the future are relevant factors in assessing the value of the goodwill in those businesses at this time.
“We remain confident in the strength and resilience of Tabcorp’s diversified portfolio of assets and are pleased that integration is now substantially complete. We are focused on supporting our people and partners during these challenging times while ensuring that Tabcorp emerges strongly post Covid-19,” he added.
Tabcorp’s final full-year financial results will be published on 19 August.