Tabcorp Holdings Limited

Tabcorp reported first-half FY26 group revenue of $1.34 billion, up 1%; EBITDA of $217.4 million, up 14.3%; EBIT of $110.2 million, up 18.9%; and NPAT before significant items up 61.5%. Domestic wagering revenue pre-VRI fell 2.5%, while turnover growth for the half was around 0.3% and management estimated about a 15 basis point yield headwind, or roughly $10 million of net revenue versus longer-term averages. EBITDA margin improved 190 basis points to 16.2%, CapEx declined 11% to $51 million, leverage ended at 1.5x net debt to EBITDA, and the interim dividend was $0.015 per share at a 56% payout ratio. For FY26, CapEx guidance remains $120 million to $140 million, cash conversion is expected to be 90% to 100% for the full year, and second-half turnover growth is expected to be similar to the first half; management also flagged about $5 million of additional A&P spend in 2H related to the 2026 FIFA World Cup.

Gillon Mclachlan framed the half as evidence that the turnaround plan is working, while stressing the company is only midway through it and still has more to do. He highlighted stronger execution across retail, MAX, omnichannel products and younger customer engagement, pointing to 14.2% growth in turnover among 18- to 24-year-olds and strong sell-through of TAB Time and TAB Takeover. He also emphasized that Tabcorp is pushing toward a national tote, TAB Live rollout in New South Wales, and a more experiential brand built around sport as well as racing, but remained measured and said the team is “pleased with but not overconfident.”

Mark Howell said the half benefited from modest turnover growth, strategic execution, cost discipline and reduced leverage, while offsetting below-average wagering yields. He quantified the yield impact at about $10 million of net revenue versus longer-term averages, said the reform Victorian wagering licence contributed an incremental $12.2 million of EBITDA in the half, and noted OpEx adjusted for that licence fell 3.7%, driving a 190 basis point EBITDA margin improvement to 16.2%. He also said CapEx was $51 million, down 11%, cash conversion was 86% in the half but is expected to be 90% to 100% for the full year, cash interest was $54.6 million including a one-off $24.9 million Victorian licence payment, and leverage ended at 1.5x after the $300 million AMTN issue at a 5.99% coupon.

Analysts focused on the turnover environment, asking whether second-half guidance referred to growth rates or absolute dollars and whether cash was outperforming digital; management said they were talking about growth and declined to forecast the cash-versus-digital mix. Questions also centered on the new retail commercial model and EBT rollout, with management saying national rollout starts the first week of July and that the terminals will add tap-and-play functionality, compliance improvements and a more seamless TAB app-like experience in venues. On TAB Live, management said ACMA clearance clears the way for New South Wales rollout, with other states to follow through regulatory approvals, and on capital allocation and possible M&A they said any opportunity would need to be strictly on strategy and price-disciplined.