In today’s announcement of its half year results to 31 December 2006, Australia’s Tabcorp Holdings reported that net profit after tax was down 3.6%. However, net wagering revenue was up by 3.7% which offset a weaker performance by the casinos. Smoking bans in Queensland, refurbishment disruptions and higher than anticipated integration associated costs were blamed for the slide in profits.

Managing Director and Chief Executive Officer Matthew Slatter said: “It’s been a challenging first half which has been impacted by a weaker revenue performance in the Casinos division, increased expenses arising from the agreement with TVN and the TAB integration wagering migration project.” He added, “We have established a great portfolio of businesses but unfortunately integration associated costs have been higher than we would have liked in the first half. Now our focus is on driving efficiency programs across the business to get our expense run rate back into line.”

According to the company, the outlook for 2007 remains challenging particularly in the Casinos Division where smoking bans are expected to continue to impact revenue. Performance improvement is expected to be driven by cost reduction and greater efficiency. Interestingly, Matthew Slatter commented that for the next 18 months to two years merger and acquisition activity and international moves are off the agenda until Tabcorp businesses deliver better results.

Commenting that during this time the company would concentrate on getting its excellent portfolio of businesses performing at optimum levels, the Tabcorp CEO said, “In this context, prudent investment decisions, financial discipline and ensuring that our balance sheet is structured to maximise value for shareholders will be the key to Tabcorp’s future success.” (E-02.21.07)

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