Tabcorp's Annual General Gathering Unveils Q1FY23 Business Performance Review
Tabcorp's Changing Landscape
The separation of its lottery and keno businesses marks a new chapter for Tabcorp Holdings Limited, as each division now has the freedom to craft unique strategies for growth. This demerger, as Bruce Akhurst, chairman, highlighted during the Annual General Meeting (AGM), will allow shareholders to recognize the potential of each company individually.
Financial Highlights
During the first quarter of the 2023 financial year, Tabcorp showcased impressive results. Adam Rytenskild, managing director and CEO, reported an astonishing 18.7% growth in group-wide revenue compared to the same period last year. Notable gains were recorded in Wagering and Media, with a 14.2% revenue increase, and a bump in digital revenue market share, now standing at 24.7%.
Revenue growth in gaming services also surged by 91.7%, but this figure is partly influenced by closed venues and fee reliefs due to the pummeling COVID-19 pandemic in the comparative period of Q1FY22.
Tabcorp's future cost growth prediction remains at approximately 3-4% on FY22 pro forma, with an expected rise in 1H23. The company also aims to maintain the FY23 capital expenditure forecast of up to $150 million, and $250-260 million for Depreciation and Amortization.
Leveling the Playing Field
Akhurst's speech also addressed changes in operational conditions, with two significant updates concerning tax reforms in New South Wales and Australian Capital Territory. Both states adjusted their point-of-consumption tax, bringing foreign online operators in line with domestic ones. Queensland also made changes in taxes and implemented other reforms, mostly favoring the industry's long-term sustainability and development, as well as consumers.
Embracing Digital Changes
Figureheads at Tabcorp are determined to increase the company's digital market share, with the sports betting app set to receive a well-deserved revamp. This is only the beginning of a series of sweeping changes intended to bolster Tabcorp's digital presence. Such steps will likely be discussed further in upcoming updates.
It appears that Tabcorp is heavily investing in digital technologies to bolster its online and mobile wagering platforms. Plans include expanding the reach of Trackside, a computer-simulated racing product, and Sky Racing Active, a digital app providing live and on-demand racing content.
Tabcorp Holdings Limited's future appears to be anchored in digital expansion within its core wagering and media segments. Analyst outlook suggests moderate optimism, yet financial performance remains a hurdle in the short term.
[1] Tabcorp Holdings Limited's recent financial results have shown impressive growth across most of its divisions, with the company performing well in Q1 FY23.[2] A revamp of its sports betting app is among the digital changes being undertaken by Tabcorp Holdings Limited to expand its digital market share.[3] Recent tax reforms in states like New South Wales, Australian Capital Territory, and Queensland have aided Tabcorp Holdings Limited by leveling the playing field for businesses operating within the industry.[4] With the demerger of its lotteries business and the sale of its wagering division, Tabcorp Holdings Limited is undergoing significant structural changes to focus on its core segments.[5] Tabcorp Holdings Limited operates in the Wagering and Media and Gaming Services segments, with services encompassing TAB agencies, online and mobile wagering, broadcasting, EGM monitoring, and related services.
- Tabcorp Holdings Limited is adopting strategic shifts to boost its digital market share, such as revamping its sports betting app.
- In an effort to level the playing field, various states have adjusted point-of-consumption tax, enabling foreign online operators to compete on par with domestic ones.
- During the first quarter (Q1) of the 2023 financial year, Tabcorp Holdings Limited demonstrated remarkable growth, with Wagering and Media and digital revenue market share rising significantly.
- Depreciation and Amortization costs are anticipated to be within the range of $250-260 million for Tabcorp Holdings Limited as it moves forward with its digital expansion and focus on its core wagering and media segments.
