Tabcorp chair Paula Dwyer

Tabcorp reports flat revenues on last Melbourne Cup before merger

Tabcorp chair Paula Dwyer
Tabcorp chair Paula Dwyer

Last week’s Melbourne Cup provided a thrilling finish when Almaddin edged out Heartbreak City at the winning post, but the amount of wagering on the day was not as exciting.

According to Australian bookmaker Tabcorp, there was $141.5 million (£87.7m) wagered on the 10-race Melbourne Cup meeting at Flemington across the Tabcorp-owned NSW, Victorian and ACT TABs, which was in line with 2015 turnover.

There was $94.5m (58.6m) in turnover on the Melbourne Cup race itself, again in line with 2015, $53.7m (£33.3m) of which was with the NSW TAB and $40.8m (£25.3m) with the Victorian TAB. A further $5.4m (£3.3m) was bet on the meeting with the Tabcorp-owned online bookmaker Luxbet.

Tabcorp took bets across 3,000 retail outlets in the ACT, NSW and Victoria, dozens of racecourses and through and the TAB app. One in four bets on the Cup was expected to have been placed using the TAB app.

Tabcorp Managing Director and CEO David Attenborough said the company took more than 10 million individual bets: “This is a massive operational exercise, which we have delivered thanks to the efforts of our employees and partners. Melbourne Cup Day allows Tabcorp to showcase what it does to millions of Australians and highlights the important role that we play for our customers, venue partners and the racing industry.”

It will likely be Tabcorp’s last Melbourne Cup as a standalone entity if its plans to merge with Tatts goes ahead. Just before the festival Tabcorp chair Paula Dwyer elaborated on the factors driving the combination of Australia’s two oldest betting operators.

She said: “The combined business will be a worldclass, diversified gambling entertainment group with operations across wagering, media, lotteries, Keno and gaming services. It will be an ASX 50 company, with pro-forma revenue of more than $5bn. The combined business will have a national footprint and a substantial presence in each of Brisbane, Sydney and Melbourne.

“Our Board believes that this is a compelling opportunity that will deliver significant value for Tabcorp shareholders. You will benefit from exposure to a more diversified business, including Tatts’ attractive lotteries business. The combined group will have a suite of long dated licences and an expected strong investment grade balance sheet. This will provide more capacity to invest, innovate and compete in an evolving marketplace, and over time position the combined business for growth both in Australia and overseas, creating more jobs and increasing returns to the racing industry.”

She said that once the transaction is completed, the combined group is expected to maintain a target dividend payout ratio of 90% of net profit after tax, before significant items and amortisation of the Victorian Wagering and Betting Licence. This is consistent with Tabcorp’s current payout ratio.

She added: “We currently expect the transaction to complete in mid-2017 following the receipt of required approvals. Until then, Tabcorp will continue to operate as usual and will continue to pay dividends in the ordinary course.”

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