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Tabcorp AGM

October 26th, 2011 0 comments

I’m off to the AGM again. This year it’s in the Grand Ballroom of the Sofitel Hotel. I’m a bit worried about how my shares are going now that Tabcorp has jettisoned its casino business. And I’m keen to compare the quality of the refreshments on offer with last year at the Tennis Centre. Those lamb cutlets were something special.

It seems to be good news and bad news. They’ve retained the Victorian wagering licence for 12 years, which is good. But it cost them $410 million which is a worry when predicted EBITDA for FY14 is $120 million. So it will take 3-4 years just to pay it off. And the competition from the corporates is a worry, with market share now down to 43%. But taking them on with Luxbet is good. And they are in the Federal Court appealing the decision to allow internet betting terminals in pubs, which is a worry. But they’ve got the Victoria Keno licence for 12 years which is good. And the Betfair case in the High Court is a worry, but the take up of Trackside in NSW is good.

Good news, bad news. Worry, worry. I’m mainly confused. The share price is struggling and is not much above the $2.25 original float price in 1994. But if you look back at 1992/93 wagering revenue was $296.5 million. Wagering revenue in the first quarter for 2012 was $394 million, equivalent to $1.58 billion for a full year. So wagering has grown some five times in 20 odd years. Maybe I should buy some more. But there are more shares on issue so earnings per share have probably lagged wagering growth. Maybe I shouldn’t.

I ponder imponderables over ham sandwiches and party pies for lunch. The pies are popular and not too bad at all. But not a patch on lamb cutlets. As penance for overindulgence I decide to walk back to Flinders Street station where a large crowd has gathered. Her Majesty has decided it is time to board the Royal Tram. I saw her passing by. I wonder if she’ll get party pies for lunch at Guv House?

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