Sports back betting hike for Tabcorp
Tabcorp shares closed at their highest since June, 2011 on Monday, after the company reported overall gaming revenues rose 2.6 per cent in the third quarter to $480 million, with growth across all four business divisions.
Australia's largest wagering operator said it also continued its dominance of sports betting with strong revenue growth for the March quarter despite aggressive competition from the likes of Sportingbet and 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's chief executive, David Attenborough, said.
Its stock jumped 5¢, or 1.5 per cent, to close at $3.39 on Monday.
Total revenue from wagering - which accounted for 77 per cent of March quarter revenue - grew 7.7 per cent, but the new joint venture arrangement governing its Victorian licence means more of this revenue now goes to the state.
As a result, Tabcorp's share of wagering revenue dropped 4.7 per cent compared to the previous third quarter to $368.6million. This year, NSW will be the focus as it lobbies to keep its state licence exclusive.
Strong growth in its fixed odds business and Luxbet, up 28 per cent to a combined $113.3 million - offset softer results from its retail channels in NSW and Victoria. "NSW and Victorian retail channels experienced a decline in third quarter turnover ... impacted by softer trading conditions, particularly in Victoria," Tabcorp said.
Tabcorp said it continued to improve market share in the fixed odds/sports betting market last year with 315,000 active customers. This is well ahead of rivals like Tatts with 230,000 customers, and Sportingbet with 172,000 customers.
Tabcorp said its share of the sports betting market grew from 34.6 per cent to 35.2 per cent in the 2012 financial year, but Merrill Lynch warned recently Tabcorp's loss of the rugby league sponsorship to Tom Waterhouse indicates the company's profit margins may be under threat.
Keno was another strong performer during the March quarter with revenue rising 16 per cent to $51.6 million thanks to the addition of the company's Victorian Keno operation in April last year.
Tabcorp has announced its Queensland Keno licence will be extended from 2022 to 2047 for a $20 million payment.
Tabcorp last August lost its biggest earner, Victoria's poker machine duopoly, and said it is planning to offset the loss with the new Keno licence and poker machine services business, TGS, which reported third quarter revenue of $24.1 million and year-to-date revenue of $61.9 million.