Shares of Tabcorp have dropped over 5% in early trade as H1 results were dampened by Tatts acquisition costs and weaker earnings from their UK start-up, Sun Bets.
The wagering giant posted a statutory net profit of $102 million, which was down 16% from a year ago. This included a $25.5 million charge in significant items related to the Tatts merger costs.
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All together, the Tatts acquisition costs represented a one-off $59.3 million drag to the bottom line.
The company announced a fully franked interim dividend of 11¢ cents per share, payable on March 13.
We expected a much better H1 result for TAH and still believe the merger will prove profitable this year.
As such, we see value in the stock in the $4.80 area and expect the previous high price of $5.70 to be challenged over the medium-term.
Tabcorp
