Tabcorp struggling to convert punters....

[Ohokaman 5,825]

Tabcorp seeks $600m as wagering falls

 

 

 

The capital-raising comes on the back of falling profits as Tabcorp has so far struggled to transition enough of its customers from retail to digital betting during the COVID-19 pandemic.

The release of Tabcorp's annual report on Wednesday shows that its Lotteries and Keno business has grown while the Gaming, Wagering and Media arms are in decline.

Outgoing Tabcorp Chairman Paula Dwyer opened her address by saying: "The 2020 financial year is defined by the worldwide onset of COVID-19, the pandemic that upended our way of life and had a significant impact on all enterprises, including Tabcorp."

Dwyer also confirmed that Tabcorp is 'seeking to raise gross proceeds of approximately $600 million'.

Those funds, to be raised by a renounceable entitlement offer, will be used to 'pay down existing debt facilities and strengthen the balance sheet to provide flexibility in these uncertain times'.

As foreshadowed to investors at the start of August, Tabcorp announced a significant drop in its net profit after tax of $271m, well down on the $396m profit reported in FY19.

Revenue in FY20 was down 4.8 per cent to $5.224b while EBITDA fell 11.5 per cent to $995m.

"Wagering and Media revenues were $2.084b, down 10.1 per cent, and EBITDA was $371m, down 19.5 per cent," said Tabcorp CEO and Managing Director David Attenborough said.

"Gaming Services revenues were $221m, down 27.3 per cent, and EBITDA was $84m, down 42.5 per cent."

However, the Lotteries and Keno business was a shining light for Tabcorp with revenues up 1.8 per cent and EBITDA up 5.7 per cent to $542m.

COVID-19 has impacted Tabcorp's retail business hard, with TAB outlets across the country forced to close during the nationwide Stage 3 lockdowns.

For the first time in Tabcorp's history, digital wagering turnover, which grew by 3.8 per cent to $7.1b, exceeded retail, which fell 27.9 per cent to $5.4b.

The closure of Tabcorp's 4400 bricks and mortar outlets accelerated an already strong trend to online wagering, with Tabcorp's main competitors experiencing unprecedented wagering growth during the fourth quarter of FY20.

While the pandemic clearly hindered Tabcorp's retail arm, the inability to transition customers to digital is cause for concern.

Attenborough confirmed that 'the pandemic is possibly accelerating the structural shift that we have been seeing for some time from retail to digital wagering'.

"The COVID-19 restrictions heavily impacted our licensed venue and TAB agency partners," he said.

"In response, we have waived more than $100m in fees. We are continuing to work with all our partners to ensure we can emerge strongly post COVID-19."

The impact on retail is only set to worsen in Victoria over the coming months with outlets set to remain shut into the peak of the Spring Carnival as the state battles to control its second wave.

It remains to be seen how many retail punters make the permanent shift online but Tabcorp's competitors are reaping the benefits with many customers switching to competing digital platforms.

Tabcorp is certainly arming itself for battle as retail betting continues to slide. The company has invested heavily in digital transformation, including the migration of UBET customers into the TAB platform and bolstering of its Sky Racing Active platform.

Tabcorp currently holds the retail licences for all states and territories in Australia expect Western Australia, which remains under State Government control.

The first big test for the future of retail betting in Australia will come up in 2024 when the Victorian licence currently held by Tabcorp expires and it's likely the new deal struck will look vastly different.

Tabcorp is currently in a transition phase with both its current Chairman and CEO set to depart the wagering giant and their replacement to face a challenging period. Dwyer will be replaced by Steven Gregg while a global search is underway for Attenborough's replacement.

[Bimbo 734]

8 minutes ago, Ohokaman said:

The company has invested heavily in digital transformation, including the migration of UBET customers into the TAB platform

Move punters to a way worse platform and then wonder why wagering is falling.  Sounds familiar.

[Baz (NZ) 1,722]

It's very interesting you can find a Lotto retail store every turn you make.....try finding a NZ TAB !! 

MUPPET'S running NZ Racing !

[barryb 2,064]

5 hours ago, Baz (NZ) said:

It's very interesting you can find a Lotto retail store every turn you make.....try finding a NZ TAB !! 

MUPPET'S running NZ Racing !

Read the article again Baz, Retail is declining even in Aus. Only an idiot business would invest more in stores when it’s on the way out.

I haven’t been to a TAB outlet in 12 months, why would I need too?. 
Too many connected with this business are averse to progress & change, like outlets, publications, venues etc. For the good of the business they need to be confined to memories.

[Trump 2,741]

2 hours ago, barryb said:

Read the article again Baz, Retail is declining even in Aus. Only an idiot business would invest more in stores when it’s on the way out.

I haven’t been to a TAB outlet in 12 months, why would I need too?. 
Too many connected with this business are averse to progress & change, like outlets, publications, venues etc. For the good of the business they need to be confined to memories.

True. JB HiFi a great result for 2019/20 Fin Yr/ thanks to ONLINE business. Shopfront retail is slowly dying and that includes TAB. Best place for a TAB is in a pub sports bar. Call in, have a beer and a bet. One of my faves is Northcliffe Surf Club at Surfers Paradise. If you’re ever allowed to visit other countries again and get to the Gold Coast, go to Northcliffe for a nice lunch, right on the ocean, great Sports Bar with huge screens - one which is about 6sqm. You’ll enjoy the racing. Otherwise there’s your phone account!