The Tabcorp Holdings Limited (ASX: TAH) share price will be in the spotlight today after the gaming company released its half-yearly results for 2021.
Have the results met the market’s expectations?
Tabcorp describes itself as a world-class diversified gambling entertainment company. The group currently has more than 3.7 million active registered customers, and its services are offered at over 9,000 venues.
Tabcorp’s HY21 results
Overall revenue for the group came in at $2.87 billion, translating into a decline of 1.5% from the prior corresponding period (pcp) of HY20.
Group EBITDA didn’t fare as well, falling 6.2% versus the pcp to $560 million.
Tabcorp’s largest division, Lotteries & Keno, generated revenue and EBITDA growth of 1.6% and 5.4%, respectively.
Conversely, Tabcorp’s second-most important division, Wagering & Media, delivered a decline in both revenue and EBITDA of 0.8% and 3.0%, respectively.
Dividend confirmed
The board confirmed eligible shareholders will receive a fully franked interim dividend of 7.5 cents per share, down from the 11 cent interim dividend declared in HY20. This puts Tabcorp shares on an annualised dividend yield of 3.4%, which grosses up to around 4.9% including franking credits.
Tabcorp shares will trade ex-dividend on 22 February 2021.
Management’s commentary
Tabcorp’s Managing Director and CEO, David Attenborough spoke about the group’s mixed results, commenting:
“Our Lotteries & Keno business delivered strong digital growth and an excellent performance across the whole portfolio, including the refreshed Set For Life and Saturday Lotto games. Over the last three years we have demonstrated a strong track record of refreshing and relaunching lottery games to grow customer engagement and rejuvenate the player experience”.
“Our Wagering & Media business also delivered strong digital growth; however its earnings were impacted by the COVID-19-related shutdowns and restrictions, especially in Victoria. These factors also heavily impacted Gaming Services and substantially diminished its ability to generate revenues in the period”.
My view
I continue to hold the view that Tabcorp’s Lotteries & Keno division is the “jewel in the crown”, and that the Wagering & Media side of the business will continue to struggle. You can read more of my thoughts on Tabcorp and the recent media speculation regarding its wagering and media business here.
All in all, I think if we see a period of reduced COVID-19 lockdowns, Tabcorp should see a rise in activity across its venues. However, I believe this will be more of a short term bounce and not an ongoing source of growth.
