Tabcorp (ASX:TAH) releases Q1 results ahead of AGM

Tabcorp Q1 results show a continuing downward trend in revenues due to covid-19 measures. However, it remains well positioned for the future.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In preparation for its annual general meeting (AGM) today, Tabcorp Holdings Limited (ASX: TAH) has released its first quarter results, FY21. Subsequently it has revealed a continuing downward trend in company revenue. In particular, a 6.9% reduction in lotteries versus the prior corresponding period, and a 55.2% reduction in gaming services pcp. The company's wagering and media business, however, saw revenues increase by 2.9% pcp.

What went wrong in Q1 results?

Overall group revenue was down by 5.7% pcp in Q1 results. In lotteries, this was due to a series of strong jackpot sequences. For instance, Powerball jackpots of $110 million and $150 million.  In the gaming vertical, it is predominantly due to the closure of venues, in particular in Vitoria. However, in the wagering vertical, Tabcorp has seen increases due to major sports completing suspended seasons. 

This is a continuation of the poor performance seen for FY20 due largely to the impacts of COVID-19. In particular the Fy20 gaming business saw revenues drop by 42.5%, and wagering fell by 19.5% after major sports cancelled seasons. 

However, there were also several positive signs for the remainder of FY21. For instance, the integration of Tabcorp and Tatts is substantially complete. In addition, the company launched $5 million Saturdays from 10 October in an effort to smooth impacts from fewer large jackpots. Finally, the company is seeking to improve efficiency and productivity via a focus on digital for lotteries and wagering, a turnaround program in gaming, and a company wide optimisation program

Undeclared in the Q1 results is the windfall in the sale of the company's 11.6% interest in Jumbo Interactive Ltd (ASX: JIN), for an approximate gross proceeds of $98 million. The company also recently undertook an equity capital raising with gross proceeds of approximately $600m. 

Tabcorp share price performance

The Tabcorp share price is down 25.5% in year to date trading. After today's release of Q1 results it is trading slightly down by 0.1% at the time of writing. Nevertheless, it presently trades at a price to earnings (P/E) ratio of 24.85 and has a trailing 12-month dividend yield of 6.45%.

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why Dateline, DroneShield, Ora Banda, and Pilbara Minerals shares are dropping today

These shares are ending the week in the red. But why?

Read more »

Man pointing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why BHP, Coronado Global, EBR Systems, and Whitehaven Coal shares are pushing higher today

These shares are ending the week on a positive note. Let's find out why.

Read more »

man thinking about whether to invest in bitcoin
Broker Notes

Why Macquarie expects this ASX 200 dividend stock to keep outperforming

Macquarie has tipped this ASX 200 dividend stock to outperform. Let’s find out why.

Read more »

a young woman looks happily at her phone in one hand with a selection of shopping bags in her other hand.
BNPL shares

Up 87% since April, why the Zip share price can keep flying higher into 2026

A leading fund manager expects more outsized gains from Zip shares ahead.

Read more »

Man in mining hat with fists raised and eyes closed looking happy and excited about the Newcrest share price
Share Market News

Why BHP and these ASX dividend stocks are buys

The mining giant and these shares have been named as buys by brokers.

Read more »

a woman holds her finger to the side of her face and looks upwards as she thinks about something.
Share Market News

Where to invest when the ASX 200 hits an all time high?

With the ASX creeping towards a record high, here are some options to consider

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Share Market News

5 things to watch on the ASX 200 on Friday

Will the market end the week on a positive note? Let's find out.

Read more »

Young man with a laptop in hand watching stocks and trends on a digital chart.
Share Market News

Which investment trends drove equity markets in May according to Macquarie?

The ASX 200 increased 4.2% in May.

Read more »