Tabcorp’s Profit dragged Down by Money Laundering Allegations
The currently ongoing court action that is regarding money laundering allegations, as well as the ambitious plans of Tabcorp to expand its businesses have had a bad effect on its profits. This is because the Aussie giant has seen its profits get dragged down as a result of the previously mentioned reasons. The numbers made this clear as the net profit of the 1st half tumbled by 28% to reach $58.9 million. On the other hand, the underlying earnings witnessed an increase of 5% to reach $102.7 million, which was ahead of the company’s expectation. The company also stated that the legal action regarding the breaches to the counter-terrorism and money laundering allegations cost the company 20 million in the 1st half.
Other Costs That Affected the Net Profit of Tabcorp
It was not only the allegations that affected the profit. This is because there was $17.9 million that was used as start up costs for the joint venture of the UK Sunbet with the Rupert Murdoch's News Corporation. There were also the bid for its rival gaming business Tatts Group, as well as the integration costs for the new gaming technology businesses that the company purchased in 2016, INTECQ. Commenting on such costs, the Chief Executive of Tabcorp, David Attenborough, stated that the company would always continue to invest in its growth. He added that the group will have a suite of licenses as well as a strong investment grade sheet. This would allow the company to be more capable of investment, as well as to innovate so they can compete in an ever growing and an evolving global market.
Tabcorp also witnessed some Positive Numbers
The company is working to get regulatory approvals from the ACCC as well as the racing industry for its bid for its rivaling company Tatts group. It is also expected to do through with the deal, giving the approvals as well as a vote by the shareholders of Tatts group. This is expected to happen by the middle of 2017.
The core wagering business of the company sure benefited from a record carnival punt. This carnival punt increased the revenues of this division by 1.4% in order to reach $987 million dollar. In addition, Tabcorp managed to witness growth in its digital business, amid ruthless competitions in the mobile phone market. The betting turnover of the digital businesses witnessed an increase of 14%. As for the interim dividend, it was increased by 12.5 cents for each share, as the board of the company targets a total payout to itsshareholders this year of ninety percent of the net profits of the company. On the other hand, the investors were not that impressed. This is because the shares of the company witnessed a tumble of 4% to reach $4.57.