Tabcorp expecting results to be up - The Sydney Morning Herald - 23rd October 2008

Gaming firm Tabcorp Holdings Ltd says it expects normalised first half results for fiscal 2009 to be modestly ahead of last year, providing trading conditions do not change materially.

Tabcorp, which reported a normalised net profit before non-recurring items of $261.9 million in fiscal 2008, said that conditions in fiscal 2009 were challenging.

"If trading conditions do not change materially, we expect our normalised first half result to be modestly ahead of the previous year," Tabcorp chief executive Elmer Funke Kupper said at the company's annual general meeting.

"This is after adjusting both years for the additional amortisation charge in relation to our Victorian wagering and gaming licences."

Mr Funke Kupper said, however, that it was difficult to make predictions given global economic volatility.

"As you are well aware, there is considerable uncertainty and volatility in the global economic environment which makes it difficult to make predictions about future performance.

"However, it is no secret that general trading conditions have become tougher."

He said operational improvements the company put in place during fiscal 2008 had put Tabcorp in a good position to weather the economic downturn.

"Tabcorp has both strong operating cash flows and a sound balance sheet," he said.

Mr Funke Kupper said in the first quarter of fiscal 2009, revenues grew by 4.9 per cent and variable contribution increased by 2.7 per cent.

He said casino revenues were flat, gaming revenues were up four per cent and wagering revenues increased 11 per cent in the first quarter of this financial year.

"We expect that the trading conditions for our casinos will remain tough for the remainder of the year.

"Wagering revenues were up 11 per cent, assisted by the recovery from equine influenza, which hit the racing industry in the previous year."

In fiscal 2008, Tabcorp reported an annual loss after booking writedowns of $707.5 million, mostly due to a Victorian government decision not to compensate the gambling firm for the loss of its duopoly gaming licence after 2012.

It reported a net loss of $164.6 million in the year ended June, compared to a profit of $450.4 million in the previous year.

But its underlying net profit for 2007/08 rose 0.3 per cent to $516.9 million, as operating revenue increased 0.9 per cent to $3.92 billion.

Tabcorp chairman John Story told shareholders that the company would not be giving guidance on Thursday on its expected dividends for this financial year.

"In light of the deterioration in global financial markets we have witnessed in recent months it would be inappropriate to give a firm commitment on future dividends."

Mr Story said the board would determine the first half dividend for fiscal 2009 at the end of the first half, taking into account the performance of the company, the economic outlook for Australia, capital market conditions and the need to preserve the current financial strength of the company.

(Credit: The Sydney Morning Herald)

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