Gaming group Tabcorp says conditions continue to be challenging after revenue grew slightly in the first quarter of the year.
"In the first quarter of the financial year, our revenues grew by 4.4 per cent, with all three divisions contributing to growth,’’ chief executive Elmer Funke Kupper told the AGM in Melbourne yesterday.
"In light of the current economic conditions, this is a pleasing performance.’’
"We expect conditions to remain challenging in the remainder of the year, with the economy in the early stages of a recovery, intensifying competition in the wagering market and a ramp up in construction activity at Star City,’’ Mr Kupper said.
"Our recent performance puts us in a good position to manage through this period, and the investments we are making give us confidence about our long term future.’’
"In the Casinos business, the Queensland properties were impacted by the slowdown in the local economy and the gaming market.
"Our market share in Queensland continues to improve, which puts us in a good position for when growth returns.
"Revenues at Star City casino were up 11.6% on a normalised basis, which indicates that the improvements we are making are being received well by our customers," he said.
The shares ended up 6 cents at $7.20, or 0.8%, on a day when the wider market eased by roughly the same percentage," The CEO told shareholders.
Tabcorp said it had moved into the second phase of its performance program and would focus on the growth of each of its three operating divisions.
It said its casinos division was entering an expansion phase, its wagering division was repositioning in a much more competitive wagering market, and its gaming business was optimising its performance ahead of the changes in the Victorian gaming industry in 2012.
"The decisions and investments we will make over the next two years will define the shape and long term future of the company,’’ Mr Kupper said.
"Our aim is to arrive in 2012 in the best possible shape, and our strong balance sheet puts us in a solid position to commit to key investments with confidence.’’
Chairman John Story told the AGM that in coming years, the company will significantly increase the investment in its businesses to ensure that it delivers the most exciting gambling entertainment experiences to customers.
"In 2009, Tabcorp commenced the redevelopment and expansion of Star City casino. This $575 million investment will upgrade and expand all major facilities and will transform Star City into a world class entertainment destination.
"In the medium term, we also see opportunities for expansion in Queensland. We would like to invest more in our properties, and particularly here on the Gold Coast, which we consider to be an attractive growth market.
"In Wagering, Tabcorp continues to deliver leading products and services to its customers in New South Wales and Victoria.
"In addition, Tabcorp is responding to the changing wagering landscape by investing in businesses that can operate nationally over the internet and phone.
"Tabcorp’s Gaming business will undergo significant change when the Victorian gaming industry structure changes in 2012.
"In response, the business is accelerating the expansion of Keno in Queensland and New South Wales. In addition, our Gaming team is exploring the market potential for Tabcorp Gaming Solutions, a new gaming services business that can operate in the Victorian gaming market after 2012."
