Tabcorp wagering and media revenue rises 34% as bidders circle

Digital revenue in Tabcorp’s highly sought after wagering and media division rose by 34% year-on-year in the first half of 2020/21 as digital turnover jumped 43%. However, overall revenue in the wagering and media division flatlined at less than 1% to A$1,189m (£664.8m) due to Covid-19 shutdowns and restrictions, which also led to a 28% decline in retail turnover. The operator’s betting arm has been in the spotlight over recent weeks with Entain keen to acquire the business, which includes offerings from TAB and UBET. Australian press reports suggest Entain made a A$3bn (£1.6bn) offer for the division. US-based asset management fund Apollo Global Management is also interested in pursuing a deal.

Tabcorp CEO David Attenborough said it was “no surprise” the wagering and media arm was being mooted as hot property, although he remained tight-lipped on a potential divesture strategy for the division. “The details of these approaches and proposals remain confidential and are indicative and non-binding in nature,” he said. “They are also highly conditional and subject to numerous requirements including due diligence, financing and various regulatory and racing industry approvals. “The board will take the appropriate time to carefully consider all of the relevant issues and strategic options that arise in respect of these matters.” Outside of dealing with suitors, Tabcorp said it will look to strengthen and expand its digital product, while also increasing interaction between its digital and retail business going forward. Several influential Tabcorp shareholders have thrown their support behind a sale at the right price as it would leave investors with Tabcorp’s profitable and stable lotteries business. Releasing its financial figures for H1 2020/21, the ASX-listed operator highlighted an annual group revenue decline of 1.5% to A$2,87bn (£1.6bn). Company EBITDA also shrank during the period, dropping 6.2% to A$560m (£313.1m), a decline which Tabcorp attributed to the impact of the pandemic. Tabcorp’s lottery and keno division remained flat at 1.6% during the period as revenue hit A$1.6bn (£890m) amid a 5.4% rise in divisional EBITDA to A$311m (£174m). Digital Lotteries turnover grew 30%, with the percentage of lotteries turnover taken up by digital operations increasing to 32% during the period. Tabcorp’s gaming services division reported the biggest decline during H1, with revenue down 51% to A$73m (£41m) amid a 67% decline in EBITDA. “Tabcorp has an improved financial position and outlook as we emerge from the challenges of Covid-19,” Attenborough said. “All three businesses are well positioned for the second half and we will continue to unlock digital growth, drive operational improvements and optimise costs. “We are committed to working with our industry partners to help them recover from the disruption Covid-19 has caused on their operations. “We are also committed to helping our industry partners reconnect with their customers and reinvigorate venues and racetracks across Australia,” Attenborough added.