The Tabcorp Holdings Ltd (ASX: TAH) share price hit an intraday peak of $1.15 today, up 9.5% after the wagering company reported a $66.5 billion profit in FY23.
According to the Australian Financial Review (AFR), Tabcorp's FY23 results beat market expectations.
The Tabcorp share price retraced this afternoon to close up 4.29% at $1.095.
Let's review the company's report.
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Tabcorp share price among the top risers today
The Tabcorp share price was the eighth highest riser of the ASX 200 on Thursday.
Let's review the highlights of Tabcorp's full-year FY23 results:
- Net profit after tax (NPAT) of $66.5m compared to a loss of $118.4 million in the prior corresponding period (pcp) of FY22
- Revenue of $2,434 million, up 2% pcp
- Earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $391 million, up 8% pcp
- EBIT of $150 million, up 103% pcp
- Operating expenses of $618 million, down 1% pcp and below guidance
- Earnings per share (EPS) of 2.9 cents per share (cps), up from a loss of 5.3 cps pcp
- Total TAB revenue market share of 34.6%, up from 33.6% pcp
- Final dividend of 1 cps fully franked and payable 18 September 2023.
Ord Minnett said the result was better than expected but noted that "4Q23 sport yields relative to competitors negatively impacted the company's sport and total digital revenue market share".
What else happened in FY23?
The re-opening of Tabcorp stores following lockdowns in FY22 contributed to revenue growth.
One of Tabcorp's key challenges is the rise of digital gaming companies.
Its market share of digital revenue fell from 24.9% in FY22 to 24.5% in FY23. Tabcorp's long-term goal is 30%.
However, the number of active digital TAB customers rose to a record 805,000 people in FY23, up 3%.
What did Tabcorp management say?
Managing director and CEO Adam Rytenskild said Tabcorp was one of the only large wagering operators in Australia to increase revenue and EBITDA in FY23.
He said:
Today's earnings and record active customers highlight the successful completion of the foundation year in the TAB25 transformation strategy.
We've built this foundation for growth by creating the right products, policy settings and attracting the people needed to transform our business. Our earnings, revenue and active TAB customers have all increased on last year and these strong metrics lay the platform to achieve our TAB25 ambitions.
What's next for Tabcorp?
Rytenskild said TAB was "a very different business today, compared to a year ago" and that the management team was delivering what was promised to shareholders.
He said:
Not only has the new TAB App been launched, we've followed up with ten new product launches as we rapidly increase speed to market.
Our retail upgrades also commenced with innovative retail fit outs underway in our biggest venues to maximise our advantage of having the only completely integrated wagering ecosystem in Australia.
One of the company's goals is to repackage TAB as a "fresher, younger, more innovative brand".
Rytenskild said:
Our new marketing campaign and branding is now live and will play an important role as we look to grow our customer base in sports betting.
Tabcorp share price snapshot
The Tabcorp share price is down 1.35% in 2023 so far and up 8.4% over the past 12 months.
By comparison, the S&P/ASX 200 Index (ASX: XJO) is up 3.4% in 2023 and 1.9% over the year.
