Tabcorp Holdings, (TAH), 1H19 result showed EBITDA at $360m and 1H NPAT at $132m. These numbers were slightly below consensus. There appears a willingness to reinvesting Lotteries’ based income, into the Wagering business to defend and grow market share.
Cost synergy savings from the Tatts merger was raised to $130-145m, which should help to underpin the stock.
Tabcorp now trades on a forward yield of 5% and we expect EPS growth to track in the 5 – 6% range. We note the recent Algo Engine sell signal going into yesterday’s earnings release.