Tabcorp (TAH) H2 2024 earnings summary

Executive summary

• Leadership transition with new CEO and CFO focused on unlocking value and accelerating turnaround.

• Company is midway through a transformation, with significant changes in execution and strategy underway.

• Group revenue declined 3.9% year-over-year to $2,338.9m, with EBITDA down 18.7% to $317.7m amid a soft wagering market and cost inflation.

• Statutory NPAT was a loss of $1,359.7m, driven by significant non-cash impairments of $1,376.4m after tax, mainly related to NSW and SA wagering assets.

• Company remains focused on market share growth, cost control, and leveraging omni-channel assets despite not meeting previous TAB25 targets.

Financial highlights

• FY 2024 EBITDA was AUD 318 million, down 19% year-over-year, driven by a 3.9% decline in group revenue.

• NPAT before significant items was AUD 28 million; statutory net loss after tax was AUD 1.36 billion due to impairments.

• Final unfranked dividend of AUD 0.003 per share declared; payout ratio 60%.

• Operating cash conversion at 94%; capex $151m, with 64% allocated to growth and transformation.

• Net debt at $860m; pro-forma net debt/EBITDA 2.0x; undrawn facilities and cash of $615m.

Outlook and guidance

• Macroeconomic and regulatory environments expected to remain challenging in the near term.

• Market softness and cost headwinds likely to persist into FY 2025; company will not meet FY 2025 OpEx guidance.

• CapEx expected to reduce to approximately AUD 140 million in FY 2025.

• New Victorian licence expected to provide EBITDA uplift; opex to rise in FY25 due to inclusion of VRI opex, inflation, and regulatory costs.

• Cash tax expected to be nil in FY25 due to carried forward losses and R&D offsets.