Tabcorp Shares Plummet 11% Amid Weak FY24 Financial Performance

Highlights:

• Revenue and Earnings Decline: Tabcorp Holdings Limited (ASX: TAH) reported a 3.9% drop in revenue and an 18.7% decrease in EBITDA for FY24, leading to a significant statutory net loss of $1.36 billion.
• Dividend Reduction: The company slashed its final dividend by 43.5%, declaring only 0.3 cents per share, reflecting the financial pressures faced during the year.
• Digital Struggles Amid Positive Developments: While securing a new Victorian Wagering and Betting Licence and upgrading retail venues, Tabcorp struggled with a 2.2% decline in digital wagering revenue.

Tabcorp Holdings Limited (ASX: TAH) Sees Major Decline in Share Price Following Disappointing FY24 Results

Revenue and Profit Decline Significantly

Tabcorp Holdings Limited (ASX: TAH) witnessed a sharp 11% drop in its share price on Wednesday, following the release of its FY24 financial results. The wagering giant reported a 3.9% year-over-year decrease in group revenue, totaling $2.34 billion. The company's earnings before interest, tax, depreciation, and amortization (EBITDA) also fell significantly, down 18.7% to $317.7 million. These declines were further compounded by a statutory net loss of $1.36 billion, driven primarily by non-cash impairment charges amounting to $1.38 billion after tax.

Dividend Slashed Amid Financial Struggles

In response to the challenging financial landscape, Tabcorp declared a final dividend of just 0.3 cents per share, unfranked, representing a 43.5% decrease from the previous fiscal year. This significant reduction highlights the pressure the company faces as it navigates a difficult market environment.

Positive Developments Overshadowed

Despite securing a new 20-year Victorian Wagering and Betting Licence and making progress in upgrading its retail venues, which showed a 19% increase in average turnover, these positive developments were overshadowed by the company's struggles in the digital space. Digital wagering revenue fell by 2.2% for the year, contributing to the overall decline in financial performance.

Management's Response and Outlook

Incoming CEO Gillon McLachlan acknowledged the tough year but expressed optimism about the company's future. He emphasized Tabcorp's unique asset base and the potential to create a comprehensive sports entertainment experience. However, he also noted that the company will not meet its TAB25 targets, indicating the need for significant changes to achieve long-term growth.

As Tabcorp faces ongoing cost pressures and a challenging macroeconomic environment, the outlook remains uncertain. Despite a 48% decline in stock value over the past 12 months, management remains focused on revitalizing the business and improving competitiveness in the market.

Customer Notice:

Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.

Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com