Tabcorp Holdings Profits Slumps by 3.7%

Submitted by Share Trading on 29 January, 2009 - 12:52

Tabcorp Holdings (TAH) has announced a drop in profit to $263.2 million for the six months to 31st December 2008 by 3.7%. The company has also revealed that it is planning to undertake a $450 million equity capital raise. The result was in line with the previous year with normalised earnings of 49.4 cents per share. Tabcorp declared an interim dividend of 35 cents per share, reflecting a revised dividend policy which is to distribute between 70% and 80% of normalised earnings each year.
The company said its normalised NPAT, which takes out the amortisation charge, rose by 0.1% to $262 million. Tabcorp reported net operating revenue of $2.11 billion up 6.4%. This represented earnings of 49.4c per share, up 4.3%, the company said. Tabcorp said casinos revenues were down, though reported a 13% rise in wagering revenue as the racing industry recovered from the equine influenza.

During the half, the racing industries in each state announced that they would implement new race fields arrangements, under which they will charge product fees to wagering operators for the betting conducted on their racing product, the company said. However Tabcorp has warned that it is uncertain how the implementation of race field’s product fees will impact on finances.

Tabcorp has already paid $7 million in new product fees in the first half of the 2009 financial year and expects the annual EBIT impact of the new charges to be in the vicinity of $30 million from the 2010 financial year. Tabcorp also had to respond to a significant relaxation of advertising laws and competition policies, with bookmakers gaining greater freedom to compete nationally. Reacting to the situation CEO of TAH, Elmer Funke Kupper said, “In the next 12 months, the company will incur significant additional charges against its revenues as a result of new wagering product fee arrangements announced by the racing industry last year and higher gaming taxes for the Queensland casinos”.