Tatts Group revealed a strong year for digital lottery sales, up to 14.5% of total sales, amidst a decrease in net revenue (5.7%). The company’s annual financial report also cited a reduction in major jackpots and bad weather during the racing season for the dip. The report follows a busy year which included a landmark merger with Tabcorp.
Tatts defended a reduction in profits as revenues dipped, blaming the large increase in tax as a result of mergers costs. Tatts reported AUS$23.4m in merger costs for the year and claimed those costs as a major impact on their revenues which fell to AUS$2.8bn, a 5.1% drop from the previous year.
Without merger costs the continued operations of Tatts were up after tax to a total of AUS$244.6m.
Lottery digital sales broke the trend of negative growth by increasing its share of total sales up to 14.5% as opposed to only 13.5 % the previous year.
Tatts CEO Robbie Cooke said: “The combination of winning our bid for the Victorian lotteries licence for a further ten years, successfully commencing the roll out of our new monitoring platform for the +90,000 slot machines in New South Wales, doing all things possible to beat FY16’s record lottery result, opening more than 320 refurbished UBET outlets under our retail renewal program, installing about 2,200 new wagering point of sale terminals, commissioning almost 270 UBET cash handling self-service terminals, launching our new charitable games operating unit to further lift our contribution to good causes, and a host of other business initiatives, all made for an extremely busy and exciting year.”
Cooke added: “Add to that mix the proposed merger with Tabcorp – an activity which of itself was all consuming – and I can say with no hesitation the team at Tatts has been operating at maximum capacity. We have absolutely not allowed the uncertainty that transformational M&A inevitably brings disturb our momentum.”