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Australia – Tabcorp expecting a $1bn write-down in the value of its business

By - 3 August 2020

Australian gambling firm Tabcorp could write down nearly $1bn or a third of its value, following a profit fall of at least 31 per cent compared to last year’s net profit of $396m.

The operator will report a net profit for the year to June 30 of between $267m to $273m.

Tabcorp CEO David Attenborough said: “COVID-19 has materially impacted our wagering and media and gaming services businesses. We are facing 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.”

Citi analyst Bryan Raymond said the write-down was not a surprise and ‘was in line with our view that the closure of retail venues for two months in NSW, three months in Queensland and at least five months in Victoria was likely to accelerate the structural shift to online, just as it has across many consumer-facing businesses. We do not expect retail wagering penetration to recover to pre-COVID 19 levels, and consider that the magnitude of this impairment reflects the fair value of the businesses.’

Tabcorp added that along with the direct impact of COVID-19, the write-down also reflected ‘the potential decline in consumer confidence and increased economic uncertainty’ and ‘the possible acceleration of retail contraction and uncertainty regarding any longer term impacts as an indirect result of the pandemic.’

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