The annual report issued Monday by Tatts shows revenue rising 3.6% to AU$2.87b (US$2.1b) in the 12 months ending June 30, but net profit after tax from continuing operations tumbled 83.6% to AU$36.2m, primarily due to AU$149m in impairment charges.
Those charges stemmed from the ongoing mothballing of Tatts’ wagering brand UBET, which was deemed superfluous following Tatts’ acquisition by rival Tabcorp that took effect last December 22. Merger expenses also played a role in making Tatts look bad in its final standalone report.
Tatts’ mainstay lottery operations reported annual revenue up 4.9% year-on-year to AU$2.1b, thanks to a solid run of large jackpots and digital sales rising nearly 28%, pushing digital’s share of overall lottery sales to 16.8%.
Wagering revenue slipped 0.5% to AU$530m, with tote betting blamed for the decline. Tote revenue was down 6.5% to AU$263m, spoiling solid performances by fixed-odds racing ($233.3m, +5.6%) and sports betting (AU$34m, +11.6%). Digital turnover was up 12.9%.
UBET reported positive revenue growth in the second half of Tatts’ fiscal year, but Tabcorp has been busy deploying its own systems and processes into UBET’s operations, with the TAB brand set to usurp UBET after the Spring Racing Carnival in the current fiscal year.
Following the union with its former rival, Tatts said it has adopted Tabcorp’s strategies for the current fiscal year. These include enhancing its digital capability by improving the consistency of its customers’ online experience, while deepening integration of digital tech into its retail network.
With Tatts’ operations now under its wing, Tabcorp reported record revenue and profits when it released its own annual results last month. Both companies had long railed against their more nimble online competition, and were ecstatic to see the introduction of new online point-of-consumption taxes and outright bans on the activities of lottery betting operators.