Tabcorp shares slump after bigger-than-expected loss
Make us a preferred source
Make us a preferred source on Google
More news: Shares in Tabcorp have slumped nearly 12% to 50 cents a share after the wagering giant posted a bigger-than-expected full-year net loss after heavily writing down the value of assets amid softer trading conditions.
Jarden analysts called the numbers a "messy result" with the lack of cost-outs leading to earnings below consensus.
CEO-elect Gillon McLachlan's assertion that the company will not meet its TAB25 turnaround targets also weighed on the stock.
The analysts expect likely market downgrades on higher costs and lower Victoria licence contribution.
Tabcorp swings to bigger-than-expected full-year loss
The news: Wagering giant Tabcorp has swung to a bigger than expected full-year net loss after heavily writing down the value of assets amid softer trading conditions.
The numbers: It posted a net loss of $1.36 billion for the year to June, compared to a $67 million profit a year ago, and wider than a $672.8 million loss expected by analysts. Group revenue dropped 4% to $2.34 billion while group earnings fell 18.7% to $317.70 million.
It will pay a final dividend of 0.3 cents a share, down from 1 cent a share a year ago.
The context: The result was mainly impacted by a non-cash, after tax impairment of $1.38 billion in the company’s main wagering and media business, which it blamed on lower consumer spending and an increase in operational costs amid persistent cost inflation. Earnings in the business were down 18.4%, while those in gaming services slid 20% during the period.
Incoming CEO Gillon McLachlan said it is clear the business will not be able to meet its TAB25 growth targets. The company expects the macroeconomic environment to remain challenging for consumers even as the regulatory environment continues to tighten, meaning the soft wagering market is set to continue in the near term.
The source: ASX announcement
