Tabcorp Holding, an Australian gambling company, had a loss in profit of nearly 60% just before the company merged with Tatts Group. Tabcorp has stated in its financial statements that the revenue was US$1.07 billion in the last six months of 2017. One of the things Tabcorp has been successful in is maintaining a growth in revenue on a yearly basis. The company had an increase of 18.7% in revenue from the previous year. Even though the revenue increased, the company saw a massive decrease in its net profit after tax (NPAT) by 20% to A$82 million and statutory NPAT had decreased by 58.2% to A$24.6 million.
The transactions that contributed to the decrease in profits is the costs that Tabcorp incurred for the acquisition into Tatts Group for A$57.4 million. The company was also involved in a failed joint venture with Sun Bets, which cost the company A$49 million and a further A$3.2 million for Sun Bets impairment charges. Furthermore, the company incurred losses of $12.4 million from the closure of Luxbet.
What Is the Financial Future?
With all these bad investments accumulating, Tabcorp Holdings would have run into major losses. Fortunately for the company, it received a cash injection of A$72.8 million from Tatts Group for equity swap. Wagering & Media, a division of Tabcorp, had a revenue just over A$1 billion in the last financial year. The turnover for Digital has increased by 16.5% to A$2.55 billion. The majority of the turnover, 71% of it to be exact, stemmed from mobile apps.
David Attenborough, CEO of Tabcorp, stated that he was satisfied with the financial results that the division accomplished in a market that is very competitive. Sun Bets had an increase in turnover of 63.5% A$158.3. The reason for the massive surge is that the company’s website customers increased to 131,000. As a result of the increase in customers, the company’s revenue increased to A$3.7 million. During the merger period with Tatts, which took place in December, Tatts contributed a turnover of A$176.3 million and earnings of $27.3 million.
The future looks bright for the two companies as both firms have managed to garner large revenue in the past and going forward the two powerhouses will merge its knowledge and skills to take the company to new levels.