The Tabcorp (ASX: TAH) share price is up and down in early trading today after the company released its half-year financial report.
The post The Tabcorp (ASX:TAH) share price wobbles on results appeared first on The Motley Fool Australia. –
At the time of writing, the Tabcorp share price is trading down 0.11% at $4.46.
How did Tabcorp perform?
For the half-year ending 31 December 2020, Tabcorp reported a 7% decline in net profit of $185 million. The gaming and entertainment services provider also saw revenue fall 2% to $2.87 billion.
Overall, Tabcorp’s group revenue declined 1.5% for the first half, while earnings before interest, tax, depreciation and amortisation (EBITDA) also came in lower, down 6.2% compared to the prior corresponding period.
Despite challenges imposed by the COVID-19 pandemic, Tabcorp’s Lotteries and Keno division saw strong digital growth, with revenue up 1.6% for the first half. However, the company’s gaming services division did not experience the same resilience. It plummeted 51% to $73 million for the first half, due to coronavirus-related venue restrictions.
In today’s results, Tabcorp highlighted that the company was emerging from the pandemic in a stronger financial position. As a result, Tabcorp declared that it would resume an 80% dividend payout ratio, equating to 7.5 cents per share, fully franked.
What is the outlook for the Tabcorp share price?
Tabcorp’s management also provided an outlook on the company’s recovery post-pandemic.
Tabcorp CEO David Attenborough said the company was “experiencing a strong recovery following the recent market challenges”.
Mr Attenborough said that all three businesses were “well-positioned for the second half and we will continue to unlock digital growth, drive operational improvements and optimise costs”.
Management also addressed the rumours of a potential takeover of its wagering and media business. It noted that the details of any proposal remained confidential, and were indicative and non-binding in nature.
Tabcorp also highlighted that any proposal would be highly conditional and subject to numerous requirements.
At the time of writing, the Tabcorp share price is staying relatively flat after closing yesterday’s trading session at $4.46. The Tabcorp share price has soared more than 13% since the start of the year, fuelled by speculation on a potential takeover of its wagering business.
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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.