You are using an older browser version. Please use a supported version for the best MSN experience.

Tabcorp expects boost from new UK venture

AAP logoAAP 3/08/2016 By Trevor Chappell

Tabcorp expects a new online wagering and gaming business in the UK, expansion of its gaming services business and the release of a new TAB app to strengthen its operations in the year ahead.

The wagering and keno firm's net profit dropped 49 per cent to $170 million in the year to June, from $334.5 million a year earlier.

The bottom-line result was skewed by a $163 million tax benefit in the 2014/15 year and $16 million in one-off items in 2015/16, including $14 million in costs to establish Sun Bets in the UK.

Excluding the one-off items, Tabcorp's annual underlying profit rose 8.5 per cent to $186 million, as digital wagering continued to grow strongly and the keno business returned to growth.

"Recent initiatives such as the proposed acquisition of Intecq and the launch of Sun Bets further strengthen and diversify our operations," chief executive David Attenborough said.

"Sun Bets is an exciting opportunity for Tabcorp to take its market leading wagering capabilities into the $A7 billion UK online gambling market."

Sun Bets was launched this week, and operates in partnership with the News Corp-owned News UK.

Tabcorp is the wagering operator and holder of the relevant gambling licences, and News UK provides marketing and promotional services.

Tabcorp has not given guidance on its expectations of revenue or earnings from Sun Bets, but Mr Attenborough said the business will need a market share of just 1.5 per cent to break even.

It is expected to cost $25 million to run Sun Bets in the 2016/17 year.

Tabcorp has also made a $128 million takeover bid for gaming systems and monitoring firm Intecq, a business it says will complement Tabcorp's gaming machine monitoring and services business Tabcorp Gaming Solutions.

The gaming firm also plans to release a new TAB app before the Spring racing carnival and AFL and NRL finals.

Mobile platforms remain the key driver of the growth in Tabcorp's digital betting business, representing 65 per cent of turnover.

Australian Stock Report head of research Chris Conway said Tabcorp's numbers and dividends were slightly ahead of expectations.

"Bottom line, Tabcorp reported solid results, and their digital business growth is encouraging. However, the company remains in a very competitive space," Mr Conway said.

Tabcorp shares were one cent lower at $4.84 at 1300 AEST.

ONE-OFF ITEMS CRIMP TABCORP PROFIT

* Annual net profit down 49pct to $169.7m

* Underlying profit up 8.5pct to $185.9m

* Revenue up 2pct to $2.19bn

* Final dividend up two cents to 12 cents, fully franked

image beaconimage beaconimage beacon