Australian gaming company Tatts Group (TTS) announced today that its first half net profit rose 23.5% to $133.02 million, boosted by an acquisition. Even so, gaming revenues performed poorly due to the outbreak of horse flu.
Tatts, formerly known as Tattersalls, said their first half profit included the first contribution from the acquisition of Golden Casket Lottery Corp in Queensland, which assisted Tatts Lotteries’ 21% earnings growth.
Nevertheless, the market was not impressed with the result and shares in Tatts fell 5.4% at market open this morning to $3.88.
Tatts said in a statement today that it has come a long way since its merger with Queensland-based wagering firm UNiTAB in 2006.
"Importantly, we have changed our name and put the Trustees dispute behind us.”
“Nevertheless, we continue to encounter damaging allegations about Tattersall’s past business practices.
"These allegations stem from a previous era, and it is noteworthy that there has not been a single allegation of improper or questionable business practices since the merger in 2006."
Tatts said it remains committed to the responsible delivery of its services.
The gaming company reported that revenue for the six months to December 31 was up by 33.4% to $1.53 billion and its poker machine operations achieved revenue and other income of $658.7 million for the first half, up 2.4% on the previous corresponding period.
Tatts said it had been able to withstand the burden of increased levies on gaming machines in Victoria, as well as smoking bans in Victoria and in the UK.
Earnings at the UNiTAB wagering business fell more than 8% as equine influenza interrupted racing in two states.
"Sales have bounced back since racing in South East Queensland and Sydney resumed in December, despite some damage to the program caused by wet weather in both states," Tatts said.
In regards to their disappointing results, Tatts stressed that the second half of a financial year was never as strong as the first because there were fewer days and fewer events to drive spending on recreational services.
Tatts said the major risk factor for the current half would be the potential impact of bad weather on the Easter and Winter racing carnivals.
Tatt’s has doubled earnings since buying betting group UNiTAB in 2006 for nearly $2 billion.
Shares in Tatts fell by 5.61% to close at $3.87.
