Australian gambling and media company Tabcorp reported a 1% increase in revenue for the second half of its financial year, reaching AU$1.34 billion (US$953.4 million). Announced on Wednesday, the results are a part of the company’s ongoing turnaround strategy aimed at revitalizing its operations. This development is crucial for Tabcorp as it seeks to regain its footing in a competitive market environment, focusing on cost efficiency and technological advancements.
The revenue uptick was driven by growth in Tabcorp’s primary segments: wagering and media, as well as integrity services. However, despite progress, the company’s statutory net profit fell by 14.2% to AU$21.7 million due to certain expenditures impacting the bottom line. The company, under the leadership of CEO and Managing Director Gillon McLachlan, is halfway through its transformation strategy, which includes streamlining operations and enhancing digital competitiveness, following previous challenges in maintaining digital momentum and high costs post-demerger.
Tabcorp has advanced beyond restructuring and is now in the execution phase, focusing on improving underlying earnings and strengthening its financial position. McLachlan emphasized the importance of meeting these strategic goals and highlighted the integrated approach of their digital, retail, and media assets to offer a cohesive customer experience. Products such as TAB Takeover, TAB Time, Mega Pot, and Miss By One are part of this differentiated offering, although the company acknowledges further progress is needed to meet its FY26 objectives.
Reviewing the financial specifics, the wagering sector, along with media services, remained pivotal in revenue generation. The group reported a 0.8% increase in revenue for the first half, totaling AU$1.25 billion. Domestic wagering grew by 1.1% to AU$1.05 billion, attributed in part to reforms in Victoria’s licensing framework, which have provided a boost to revenue streams. Excluding these reforms, domestic wagering would have seen a decline of 2.5%.
Despite a 0.5% dip in digital revenue to AU$536.9 million and a reduction in digital active users by 4.4%, cash-based domestic wagering saw a 2.8% increase to AU$511.1 million. International wagering also rose by 6.6% to AU$115.1 million, supported by customer growth. Meanwhile, media revenue saw a slight rise of 0.2% to AU$192.5 million, driven by strong international export performance. Integrity services revenue increased by 4.1% to AU$91.7 million.
On the cost side, operating expenses grew by 1.1% to AU$350.2 million. Nevertheless, the operational overhaul and cost-cutting initiatives resulted in a 14.3% increase in EBITDA to AU$217.4 million. Depreciation and amortization costs were up 9.9% at AU$107.2 million, but earnings before interest and tax before significant items improved by 18.9% to AU$110.2 million. Net profit after tax but before significant items surged by 61.5% to AU$35.7 million.
Significant items that adversely affected the net profit included costs associated with the remeasurement of the Victorian licence and transformation expenses. Despite these challenges, Tabcorp remains optimistic about future performance, projecting wagering turnover to benefit from major events like the upcoming World Cup, albeit with some additional operational costs.
Looking forward, Tabcorp is committed to enhancing its omnichannel customer experiences and implementing changes to its retail commercial model, expected to yield benefits in FY26. However, these gains are likely to be reinvested to boost customer engagement in venues. The company’s focus remains on executing its strategic plans rigorously throughout FY26 and beyond.
Notably, Tabcorp decided not to pursue its potential acquisition of BetMakers. Initial discussions aimed at leveraging BetMakers’ technology products did not result in a formal offer, highlighting the exploratory nature of the dialogue.
As Tabcorp continues its strategic transformation, the effectiveness of its cost management and digital integration efforts will be closely monitored. Regulatory and market changes will also play a significant role in shaping the future landscape for the company. The next steps involve maintaining the momentum of its turnaround strategy, with an emphasis on achieving fiscal objectives and enhancing market positioning.
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