Since launching a new app and getting closer towards an even playing field with their online competitors, Tabcorp Holdings (ASX: TAH) has reported a big revenue boost and a surge in profits as the wagering giant claws back from the 2021 COVID lockdowns that decimated their in-venue wagering operations.
“Our business has rebounded strongly from a COVID impacted first half last year to experience strong growth in Group revenue and EBITDA,” said Tabcorp Managing Director, Adam Rytenskild.
“The COVID lockdowns presented an opportunity for digital only operators, but our retail customers have quickly returned and our digital transformation is amplifying that opportunity.”
Rising market share for Tabcorp comes on the back of strong growth in revenue for the period ending 31 December 2022 (H1 FY23) where it reported an 11% gain to $1.2 billion. Earnings also saw a notable 24% hike over the period to $197 million.
The distinguished growth was thanks to the increase in cash-wagering revenue as customers returned to retail venues as the nation slowly transitions back to normality following COVID lockdowns – but mainly as Tab continues to maintain a burgeoning 25.1% market share in digital revenue despite the presence of new entrants into the market, including their own demerger in May 2022 of The Lottery Corporation (ASX: TLC).
This Half Year not only reaped benefits for Tabcorp but maintained shareholder optimism with the announcement of a 1.3 cents per share fully franked dividend – though still a decrease from the 1H22 dividend of 6.5 cents per share, which is inflated due to the discontinued contributions of TLC.
Over the past few months, Tabcorp has invested significantly into a complete digital overhaul transformation, launching a new TAB App while also acquiring a 20% stake in online racing and sports bookie Dabble.
The company aims for 30% digital revenue market share by FY25, and aims to achieve this by cutting depreciation & amortisation guidance between $250-$260 million, while also cutting down its operating costs to between $600-$620 million, its largest expense.
The recent demerger from The Lottery Corporation continues to progress smoothly after raising $450 million via debt from US-based Private Placement markets which is expected to strengthen its funding position even more throughout 2023 and bears ahead – something that was clearly evident today.
“Tabcorp is doing what we say we will do – we have unshackled ourselves post the demerger with a new energy, capability and offers for our customers. We will continue to build on that.”
Trading Desk Assistant at Emerald Financial
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