Tabcorp revenue up to $5.68bn as business readies for demerger

Revenue from the soon-to-be-demerged Lotteries and Keno business came to $3.20bn, a 10% year-on-year increase.

“This was a record profit result, driven by well executed game changes, effective marketing and continued focus on the customer experience and digital innovation,” Tabcorp chair Steven Gregg said.

“As you can imagine, light entertainment has become even more important for many Australians. We saw this in our customer numbers, with active registered customers rising to 3.8 million players”

Wagering and media revenue, meanwhile, was $2.3bn.

“Unlike newsagents and fuel/convenience which could trade in times of COVID-19 restrictions, hotels, clubs and TAB agencies had to shut their doors for extended periods,” Gregg said. “Nonetheless, it was pleasing to see strong revenue growth across each of the three lines of business – wagering, media and international.”

The gaming services division, on the other hand, saw revenue decline 17% to $183m.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was $1.1bn, an 11% year-on-year increase.

Tabcorp’s net profit after tax, meanwhile, was $269m, as the business returned to profit following an $870m loss in 2019-20.

Through its operations, Tabcorp was able to distribute $4.2bn in taxes, levies and payments to state governments.

Tabcorp also provided more information about its upcoming demerger of its lottery operations from the remainder of the business.

The operator launched an operational review in March, looking at a number of options, including potentially selling off its Wagering and Media or Lotteries and Keno business.

After this review, which saw online giant Entain bid for the wagering and media business, Tabcorp decided that the best option would be to keep the wagering arm and to spin off Lotteries and Keno into a new business.

Tabcorp chairman David Attenbrough (pictured) said the demerger would turn Tabcorp into two highly successful businesses.

“This decision to set up two market-leading businesses, will deliver a range of operational and strategic benefits,” he said.

“Through the Tabcorp-Tatts combination, the foundations were laid for both Lotteries & KenoCo and Wagering & GamingCo to deliver long-term growth.

“Lotteries & KenoCo is expected to be a significant business in the lottery category. Its infrastructure-like qualities, low capital intensity, and upside from continuing digital growth make it an attractive business.

“Similarly, Wagering & GamingCo will operate some of Australia’s best-known wagering and gaming brands – TAB, Sky Racing and MAX. It has a strong platform for organic growth supported by its domestic scale and diversified assets and well established and profitable international businesses.”

Gregg will serve as chair of the Lotteries and Keno business, while Tabcorp managing director Sue van der Merwe will be its chief executive. Adam Newman will be the company’s chief financial officer and Patrick McGlinchey its chief legal and risk officer and co-company secretary.

Tabcorp director Bruce Akhurst will be chair of the wagering and gaming business, while Adam Rytenskild – currently managing director for the wagering and media business – will become chief executive when David Attenbrough steps down. Dan Renshaw will be chief financial officer after the demerger.

“Dan has deep experience in wagering, finance and commercial roles and has been with Tabcorp since 2012,” Gregg said.