Tabcorp’s Financial Performance Post-Demerger: An iGaming Overview for FY23
Tabcorp has unveiled its comprehensive financial performance for the financial year ending 30 June 2023 (FY23). This assessment delineates the first complete financial year following the Demerger, which took place on 1 June 2022. It is essential to understand the performance within the framework of the two predominant arms of Tabcorp Group’s business within the iGaming landscape: Wagering and Media, and Gaming Services.
For FY23, the Group reported revenues of AU$2,434.4 million (£1.28 bn/US$1.5 bn/€1.46 bn), marking a 2.6% growth compared to the previous fiscal year. Notably, there was a reported statutory net profit after tax (NPAT) of AU$66.5m. This figure, however, includes a non-cash impairment charge of AU$49.0m related to the Gaming Services branch. For perspective, the previous fiscal year registered a statutory net loss after income tax of $118.4m.
When diving deeper into the numbers, the Group’s EBITDA before any significant items was AU$391.0m, a subtle increase from the $381.6m of the previous year. As for earnings per share (EPS), FY23 witnessed 2.9 cents per share, contrasting with a loss of 5.3 cents per share in FY22.
Strategic endeavours during FY23 were evident. Tabcorp initiated significant steps to redefine its foundation, targeting a resilient, competitive, and expanding business model by FY25. This transformation is aligned with their TAB25 strategy. A noteworthy stride in this direction was the launch of the new TAB App, followed by ten subsequent product releases, aiming to augment TAB’s digital standing in the iGaming sector and bridge product disparities.
Furthermore, Tabcorp has been proactive in ensuring an equitable landscape. Progress was observed with reforms in Queensland, ACT, and Tasmania, ensuring consistent wagering taxes and fees for Tabcorp as with online iGaming operators. The goal is to ensure parity across all Australian states and territories.
On the Gaming Services front, there were marked advancements. Notably, the award of a 20-year license to monitor electronic gaming machines in Tasmania, starting from 1 July 2023, and the culmination of the eBET business sale were significant. Post this fiscal year’s end, the sale of MAX Performance Solutions (MPS) was also announced.
Operational efficiency was at the forefront with the inception of the Genesis program, targeting cost management. The capital expenditure for FY23 was recorded at AU$155.4m.
Shifting the focus to capital management, the Group maintained a robust balance sheet with net debt at AU$344.7m and available undrawn debt facilities amounting to AU$950m as of 30 June 2023. In FY23, the Group fortified its financial sources and extended its debt maturity profile through a new AU$425m equivalent US Private Placement (USPP) note issuance, bringing the average debt maturity to 4.7 years.
Concluding with dividends, a final dividend for FY23 of 1.0 cents per share, fully franked, is announced, with payment slated for 18 September 2023. This brings the total dividend for FY23 to 2.3 cents per share, aligning with the Group’s dividend payout ratio target of 50% to 70% of NPAT before significant items.
For a more granulated understanding of the Group’s financial performance and detailed information regarding dividends, readers are directed to specific sections in the official Financial Report.
“The 2022/2023 financial year (FY23) represents the first full year of operation of our businesses following the demerger of the Lotteries and Keno business in June 2022 (Demerger).
“We’re pleased to report that in our first full year following the Demerger we achieved what we pledged to investors we would do and have laid the foundations for growth. TAB launched a new App on time as promised to the market with a record 805,000 active customers in FY23, a level playing field was legislated in Queensland and our Gaming Services business continued its transition to an integrity services model.
“We also launched our TAB25 vision to reshape our Company into a simpler, growing, more valuable business, providing investors with clarity around our strategic goals for the next three years.
“The Group reported a net profit after tax (NPAT) of $66.5 million in FY23, after incurring a non-cash impairment charge of $49.0 million (before tax) relating to the Gaming Services business and other significant items benefit totalling $16.4 million (before tax).
“Revenues were $2,434.4 million, up 2.6% on the previous year. Group EBITDA before significant items was $391.0 million, up from $381.6 million for the previous year,” attributed to Bruce Akhurst Chairman and Independent Non-Executive Director and Adam Rytenskild Managing Director and Chief Executive Officer.