Profits Drop for Tatts After Tabcorp Takeover
It has been a year since Tabcorp bought into Tatts and the company doesn’t seem to be doing well. In their recent annual report, Tatts reported that there have experienced a significant drop in profits for the current fiscal year.
The report was published on Monday, and the lottery and betting company report an 83.6% drop in profits to AU$36.2 million. However, the company revenue grew to AU$2.87 billion which is 3.6% growth. The decline in profits is attributed to the impairment charges that totalled AU$149 million. Since the merger, Tatts’ wagering brand UBET has been considered as unnecessary, and the company has been responsible for the systems and processes for the brand.
Affected Divisions in Tatts
Since the merger, Tatts has been implementing Tabcorp’s strategies. These strategies include enhancing digital proficiency. This is done by improving the customer’s online experience and expanding the incorporation of digital tech.
Following the implementation, the lottery business has experienced annual revenue growth of 4.9% to AU$2.1 billion. The growth comes from the digital sales and large jackpots which almost reached 28% with lottery sales reaching 16.8%.
When it comes to betting, the revenue dropped by 0.5% reaching AU$530 million. This mostly comes from tote betting because it experienced a 6.5% drop to reach AU$263 million in revenue. However, other betting divisions such as sports betting have increased in revenue of 11.6% to AU$34 million.
Tabcorp’s Revenue and Profit Growth
Tabcorp, on the other hand, reported a growth in their revenues and profits when they released their report last month. Their company reported a 71.7% increase in earnings to AU$28.7 million and income reached AU$3.83 billion in the current fiscal year.
There has been an introduction of procedures that ensure that there is a fairer playing field in the Australian gambling industry and Tabcorp will do well in this environment. Some of these measures include the introduction of the online point-of-consumption taxes and the ban of synthetic lotteries.