Tabcorp Earnings: Wagering Woes Persist as Costs Climb

We lower our Tabcorp fair value estimate 14% to AUD 0.90. The cut principally reflects higher costs, as previously anticipated savings won’t come, and ongoing wagering market weakness. Underlying fiscal 2024 EBITDA fell 19% to AUD 318 million—about 4% below our prior forecast. There were AUD 1.7 billion in abnormal expenses excluded from the underlying result, most of it AUD 1.5 billion in noncash impairments to wagering licenses and goodwill. This reflects slower-than-expected recovery in wagering market, tightening regulation, and cost inflation that looks permanent. Other one-off costs relate to the Genesis transformation project, the new Victorian license, and demerger and divestment costs.