In Australia Tabcorp Holdings Limited today published its 2009 full year results. Last year the company reported a loss of A$164.6 million but this financial year has made a A$521.7 million profit. The positive revenue performance was driven by solid growth in Gaming, the recovery from Equine Influenza in Wagering and an improved revenue performance in the Casinos division in the second half.

Chairman John Story said: “It has been a difficult and challenging year for Tabcorp, having regard to both the economic conditions and the regulatory environment. In these circumstances, a marginal increase in the normalised profits is a sound result. The balance sheet was strengthened in the second half by raising new equity and issuing Tabcorp Bonds. These initiatives, which were implemented early and effectively, have allowed the company to continue its vital capital investment program with confidence. In support of its capital management program, the company implemented a new dividend policy during the year.”

In Tabcorp’s Casino division there was full-year revenue growth of 2.6%, with second half growth of 5.1%. All four casino properties grew revenues in the second half. Expenses were up 6.8%. Labour and marketing expenses increased as the business progressed with its plans to provide improved customer service and support higher revenue growth. During the year, the Queensland Government announced an increase in Tabcorp’s gaming taxes from 1 July 2009. As previously announced, the financial impact of the increase will be approximately A$30 million per annum before tax from the 2010 financial year.

The redevelopment of Star City casino has been expanded. After a review of the project by Larry Mullin, the new CEO of the Casinos division, the Board approved an increase in the project capital budget to A$575 million. The extra capital will further enhance the entertainment offer, provide additional gaming capacity and improve the operational infrastructure of the casino.

The company’s Wagering division saw a 7.8% increase in revenue. Following a strong first half, the Wagering business experienced much tougher trading conditions in the second half of the year. During the year, the racing industries in each state announced that they would implement new race fields arrangements, under which they would charge product fees to wagering operators for the betting conducted on their racing product. The additional race fields charges reduced Tabcorp’s EBIT by A$20 million in 2009 and is expected to impact it by A$30 million in 2010.

The Gaming division saw business grow in Victoria and an expanded distribution in New South Wales. Chief Executive Officer Elmer Funke Kupper commented, “Revenues held up well. Our Gaming business performed well throughout the year, and it was pleasing to see an improved revenue performance in our Casinos division in the second half. This helped offset the significant revenue and margin pressure that is building in the Wagering business as a result of increased competition.”

He added that 2010 will be a particularly important year for the company. “The 2009 results show that the company is operating relatively well, with revenue growth in each of our businesses. We expect that economic conditions will remain challenging in 2010. At the same time, we will need to absorb higher taxes in Queensland and higher racing industry fees in our Wagering business. In this environment we will continue to focus on the basics to deliver the best possible results.” (E-08.06.09)

© Copyright 2009 CasinoCompendium



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