Tabcorp set to lose billions from COVID-19 hit
Tabcorp has warned the economic downturn caused by the coronavirus pandemic has reduced the value of its business by more than $1 billion.
In an update provided to investors on Monday morning, Tabcorp said its financial results for the year ended June 30 would incur a $1 billion to $1.1 billion non-cash impairment charge.
It said the charge had dented the value of it goodwill and was a direct impact of government measures imposed to curb the transmission of COVID-19. A large proportion of Tabcorp’s sports betting and lotteries businesses were impacted by venue closures and the suspension of sporting fixtures across Australia.
The company also noted the expense to the business was partly a result of accelerated retail contraction and uncertainty about how long the pandemic would last. Tabcorp chief executive David Attenborough said COVID-19 had materially impacted its wagering and media businesses.
“We are facing into a challenging and uncertain environment, and the current operating conditions and those expected into the future are relevant factors in assessing the value of the goodwill in those businesses at this time,” he said.
The group has tipped its profits and earnings for the 2020 financial year will be lower than the previous corresponding period in 2019.
Tabcorp expects to post a net profit between $267 million and $273 million, approximately $130 million lower than the previous financial results in 2019. It also expects earnings before tax and interest will be in the range of $990 million to $1 billion, which is lower than the $1.124 billion reported in 2019.
“We remain confident in the strength and resilience of Tabcorp’s diversified portfolio of assets and are pleased that integration is now substantially complete,” Mr Attenborough said.