Gaming company Tabcorp Holdings has posted half-year net profit up 2.9% on the first half of 2009-10.
Tabcorp told the ASX yesterday that net profit in the six months to December 31 was $265.5 million, up from $257.9 million in the prior corresponding half year.
Revenue was $2.2576 billion, up 3.5% from $2.1807 billion.
Tabcorp declared an interim dividend of 24c per share fully franked.
Tabcorp said its normalised net profit for the half year was $272 million, up 3% on the prior corresponding half.
Normalised earnings per share were 42.6c, down 2.1%, following a capital raising, the company said.
Investors looked at the figures and liked what they saw, sending the shares up 3%, or 21c, to $7.11.
Tabcorp chief executive officer Elmer Funke Kupper said that each of the company’s three operating divisions was forecasting an improvement in revenue and earnings performance in the second half of the financial year.
The company said the floods cost it $10 million in lost revenue in January.
"The recent floods put some uncertainty in the immediate outlook for consumer spending in Queensland," Mr Funke Kupper said.
"Nevertheless, we are expecting to see positive underlying growth in the second half of the year.
"This gives us confidence that we are on the right path with our investment programs," he said.
Tabcorp said the result was boosted by tax credits totalling $9 million, after credits of $16 million in the prior corresponding half year.
Normalised net revenue was $2262.9 million, up 3.3%.
All three business divisions achieved positive revenue growth, with the strongest growth recorded in Casinos, Tabcorp said.
Casinos: EBITDA $201.0 million, up 5.2%. EBIT $153.9 million, up 4.1%. Casino expenses grew by 5.8%.
EBITDA at Star City in New South Wales increased 4.1%. Revenues were up 6.5% as the business expanded its product offering and opened new gaming areas on the Main Gaming Floor.
The three Queensland properties showed a recovery in performance following a difficult year in 2010. Revenues increased 4.7% and EBITDA grew by 7.0%. All main lines of business showed positive revenue growth.
Wagering: EBITDA $187.7 million, up 3.5%. EBIT $151.9 million, up 3.0%. Wagering revenues were up 2.1%. Variable contribution grew by 3.1%. Expenses increased by 2.6%. They continue to be well controlled, with investments in expansion initiatives offset by savings in other areas.
Gaming: EBITDA $172.6 million, up 3.0%. EBIT $148.4 million, up 2.3%. Expenses were up 4.6%, driven by costs associated with the investment in the Casinos business. Expenses continued to be well controlled in the Wagering and Gaming divisions.
Tabcorp chairman John Story described the result as "sound".
"It was pleasing that all three operating divisions recorded positive revenue and earnings growth," Mr Story said.
"During the half, the company announced further investments in its Queensland casinos and in Wagering. Each of the divisions now has attractive growth programs in place.
“In October 2010, Tabcorp announced that it would pursue a demerger of its Casinos business from its Wagering, Gaming and Keno businesses. The work to implement the proposed demerger is underway and the target date remains 30 June 2011.
"The work to implement the proposed demerger is underway and the target date remains 30 June 2011," Mr Story said.
Tabcorp said it planned to have a scheme booklet available during April 2011, and to hold an Extraordinary General Meeting in late May or early June to allow shareholders to vote on the demerger proposal.
Tabcorp said the recent Queensland floods had affected trading at its Treasury Hotel and Casino in Brisbane, with "a significant downturn in visitation’’ during the floods and immediately afterwards.
"Tabcorp estimates that the immediate revenue impact of the January floods and wet weather was approximately $10 million.
"Despite the impact from the floods, normalised group revenues grew 2.5 per cent in January 2011 indicating good underlying growth,’’ the company said.
Tabcorp said its other casino properties experienced minimal impact and continued to operate normally, with Jupiters on the Gold Coast and Star City continuing with the momentum experienced in the first half.
"The Wagering business was also impacted by the wet weather across Queensland, NSW and Victoria with an increase in the number of abandoned races.”
