Tabcorp sees revenue drop 5.7% for Q1

The company says retail operations are still being hit by the pandemic, especially in Victoria.  

Australia.- Lottery services provider Tabcorp has announced that unaudited financial results for the first quarter of its 2021 financial year show revenue down by 5.7 per cent year-on-year.  

From July to September, lotteries and Keno revenues fell 6.9 per cent in relation to the same period in 2019. The firm said the decline in lottery revenue was due to strong jackpot sequences last year.

Gaming services revenues were down by 55.2 per cent, mainly due to the closure of venues in Victoria due to the Covid-19 pandemic.

Tabcorp saw a 2.9 per cent rise in wagering and media revenues despite the decline in retail operations. It said wagering revenues saw a 47 per cent rise “in a highly competitive market” due to the completion of suspended sports seasons and tournaments.  

Tabcorp recorded net losses of AU$870m (US$613m) for full-year 2020. Net profit after tax and before significant items was AU$271m (US$191m).

Tabcorp admitted the pandemic had “materially impacted” financial results for 2020. Revenue was down 4.8 per cent, to AU$5.2bn (US$3.66bn), and EBITDA before significant items was also 11.5 per cent below the previous period.  

Lotteries and Keno accounted for more than half of the Australian group’s revenues and almost 75 per cent of EBIT. In this sector, EBITDA was up 5.7 per cent in full-year 2020 to AU$542m (US$382m). 

Wagering and media business EBITDA was AU$371m (US$261m), which is 19.5 per cent below the previous year. The company specified that there was partial growth on the online channels while the retail business was hit by the health measures.  

The mandatory closure of hotels and clubs took a toll on Tabcorp’s gaming services unit. It reported EBITDA of AU$84m (US$59m), 42.5 per cent below the prior 12-month period.  

Addressing shareholders, chairman Paula Dwyer said the group had moved quickly to mitigate the immediate fiscal impact and strengthen its position during the pandemic.

Actions included securing financial liquidity, reducing non-essential operating and capital expenditure, and negotiating amendments to commercial arrangements when possible. 

She added: “Other early actions were the temporary standing down of employees where shutdowns meant no work and a reduction in CEO remuneration and chairman and non-executive director fees from April to June 2020.” 

The Australian giant also undertook to raise equity capital, resulting in gross proceeds of approximately AU$600m (US$423m). Those funds were used to pay down existing debt facilities and strengthen the balance sheet. 

They mentioned in many parts of Australia agencies have been able to continue operations under Covid-19 protocols, but in Victoria the venues were not permitted to trade and were closed for the most part of the last eight months.  

She announced no final dividend would be paid to shareholders for FY20 saying, the decision “was made to preserve the Group’s liquidity in this exceptional and uncertain period.”