Tabcorp Holdings Limited (ASX: TAH) has announced their results this morning shortly before market open. The company reported an increase in revenue of 4.4% and EBITDA of 2.1%. Integration between TAB and Tatts continues and remains on track to achieve FY21 target of $130-$145m EBITDA.
Tabcorp Holdings Limited (ASX: TAH) has announced their results this morning. The company came off 4%, despite reporting a 4.4% increase in revenue and a 2.1% increase in EBITDA. (Credit: ASXReport.com).
Lotteries & Keno segment’s revenue grew 12.4%; and earnings 16%, driven by Powerball game change and greater alignment with retail partners, leading to 300k additional active registered players. Wagering and media’s revenue fell 3.7% from soft consumer discretionary spending and cycling a strong pcp which had the Soccer World Cup.
The Gaming Services segment is under review with revenue falling 4.4% and earnings down 14.1%. The decline was due to contract expiries, contract extensions at lower daily rates and reduced project work.
The core business of the company as well as the integration of the TAB and Tatts merger are performing well and in line with expectations. However, the high margin Gaming Services business (5% Rev; 11% EBITDA) has been underperforming, possibly due to a competitive environment leading to contract expirations and downwards pricing pressure.
Investors have sold Tabcorp off this morning, with the stock falling 4% shortly after market open. However, some investors remain attracted to the stability of Tabcorp’s earnings yield. However, to them, it would be advised to remain cautious of the decline in earnings from the Gaming Services segment.
This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
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