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TATTS Group (ASX: TTS) has posted a full year net profit loss of 5.7 percent and a revenue decline of 8.4 per cent as it absorbs some of the cost of its controversial planned merger with Tabcorp Holdings (ASX: TAH).
The gaming company's net profit for the financial year to 30 June 2017, came in at $220.5 million which is down from $233.7 million in the 2016 financial year. Revenue declined from $3.03 billion in 2016 to $2.78 billion in FY17.
Australia's largest non-casino gambling group blamed much of the profit and revenue decline on a $137.8 million revenue 'hit' from a significantly lower jackpot run, with just 31 major jackpots compared to 45 in the previous financial year, as well as poor weather which impacted the racing calendar in which 347 races were cancelled.
"To say it has been an eventful year at Tatts would be an understatement," Tatts managing director and CEO Robbie Cooke (pictured) says.
Cooke pointed to the company's winning bid for the Victorian lotteries licence for a further 10 years and the refurbishment and renewal of 320 UBET outlets, along with the controversial and drawn out planned merger with Tabcorp.
"Add to that mix the proposed merge 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," Cooke says.
"We have absolutely not allowed the uncertainty that transformational M&A inevitably brings to disturb our momentum."
Tatts and Tabcorp are in the middle of a merger deal which would create an $11 billion entity making it the largest gaming and gambling company in Australia and, as a result, it has faced opposition from the consumer watchdog and its rivals.
In June, The Australian Competition Tribunal (ACT) granted authorisation for the Tabcorp-Tatts merger, ruling the deal would create substantial public benefits.
However, online betting company CrownBet joined the consumer watchdog, the Australian Competition and Consumer Commission (ACCC), in calling for a judicial review of the proposed merger.
The ACCC contends the ACT may have made three errors of law in its decision.
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