Punters keep Tabcorp smiling
Tabcorp shares closed at their highest since June 2011 on Monday after the company reported that its overall gaming revenues rose by 2.6 per cent in the third quarter to $480 million, with growth in all four business divisions.
Australia's largest wagering operator said it had continued its dominance of the sports betting market, with strong revenue growth for the March quarter despite aggressive share grabs by British operators like Sportingbet and upstarts like bookmaker Tom Waterhouse.
"Tabcorp has continued to deliver a steady trading performance, with third-quarter revenue growth in 2013 broadly in line with the first half," Tabcorp chief executive David Attenborough said.
Its stock gained 5¢, or 1.5 per cent, to close at $3.39 on Monday.
Total revenue from its wagering business, which accounted for 77 per cent of its revenue for the March quarter, rose by 7.7 per cent. However, a new joint venture arrangement governing its Victorian wagering licence means more of this revenue now goes to the state.
As a result, Tabcorp's share of wagering revenue actually fell by 4.7 per cent on the previous quarter to $368.6 million.
NSW will be the company's focus this year as it lobbies to keep its state wagering licence exclusive.
Strong growth in its fixed-odds business and Luxbet, 28 per cent higher to make a combined $113.3 million, offset softer results by retail outlets in NSW and Victoria.
Tabcorp said it had a bigger share in the fixed-odds sports betting market last year with 315,000 customers. Tatts has 230,000 customers, and Sportingbet 172,000. The latter is in the process of being taken over by British bookmaker William Hill.
Tabcorp said its share of the sports betting market increased from 34.6 per cent to 35.2 per cent in the 2012 financial year. However, Merrill Lynch warned recently that Tabcorp's loss of the rugby league sponsorship to Tom Waterhouse indicates the company's profit margins may be under threat from competitors.
Keno was another strong performer for Tabcorp in the March quarter, with revenue rising by 16 per cent to $51.6 million due to to the addition of its Victorian Keno operation in April last year.
Earlier this month, Tabcorp announced that its Queensland Keno licence will be extended from 2022 to 2047 in exchange for a $20 million payment.
In August last year, Tabcorp lost its biggest earner, Victoria's poker machine duopoly, and said it is planning to offset that loss with the new Keno licence in Victoria and the poker machine services business, Tabcorp Gaming Solutions.
TGS reported third-quarter revenue of $24.1 million and year-to-date revenue of $61.9 million.