Leading gambling entertainment company Tabcorp Holdings Limited (ASX: TAH) owns a suite of assets including tab.com.au, Luxbet, Sky Racing, and Keno.
The $4 billion company has just released its financial results for the year ending 30 June 2015.
Result Highlights:
- Revenue from continuing operations increased 6% to $2.15 billion.
- Earnings before interest and tax (EBIT) from continuing operations grew 4% to $334.6 million.
- Net profit after tax from continuing operations but before significant items jumped 14.7% to $171.3 million.
- Earnings per share gained 9.6% to 21.7 cents per share (cps).
- A final dividend of 10 cps has been declared with an ex-dividend date of 18 August and a payment date of 24 September. This brings the total ordinary fully franked dividends for the year to 20 cps; a special dividend of 30 cps was also paid in March.
- Net debt increased slightly to $988 million.
- Turning to the divisional results – Wagering and Media was the stand-out performer with EBIT rising 5.6%; Gaming Services also performed well with EBIT increasing 4.8%; while Keno lagged, registering a decline in EBIT of 8.1%.
Outlook:
The outlook for the gaming sector appears mixed at present with Echo Entertainment Group Ltd (ASX: EGP) reporting strong results yesterday but James Packer announcing he will step down as Chairman of Crown Resorts Ltd (ASX: CWN) today. Likewise, gaming machine manufacturers Aristocrat Leisure Limited (ASX: ALL) and Ainsworth Game Technology Limited (ASX: AGI) are experiencing divergent share price performances.
With no specific guidance provided, investors will have to factor in the growth benefits from the recently acquired ACTTAB business and initiatives being undertaken to improve performance across Tabcorp's asset base.
With the share price down just 0.6% in late morning trade to $4.67, the stock is trading on an implied historic price-to-earnings multiple of 21.5 times which is perhaps more a reflection of the group's defensive asset quality than of its growth potential.
