Tabcorp (ASX:TAH) executives told investors the company is “midway through” a turnaround plan but said first-half FY26 results showed continued progress, supported by cost and capital discipline, improved execution across its omni-channel wagering offering, and growth in its Integrity Services unit, MAX.
Managing Director and CEO Gil McLachlan said the company has been executing against the “revised game plan” released a year ago and emphasized that “there’s still work to do.” He highlighted strong campaign and product activity through the AFL season and Spring Carnival, including “AFL Miss By One,” “MegaPot,” and “TAB Takeover,” while noting that Spring Carnival wagering yields were historically low due to an “unusually high number of favorites winning major races.”
Customer-friendly results pressured yields, but diversification helped
Management estimated the net yield impact across the period was around 15 basis points, or about AUD 10 million of net revenue, compared with longer-term averages.
First-half financial performance and dividend
Howell said earnings growth in the first half reflected a “modestly improving turnover environment,” strategic execution, and cost and capital discipline. He also pointed to a lower leverage ratio, ending the calendar year at 1.5x net debt to EBITDA.
Key reported figures for the first half of FY26 included:
- Group revenue grew 1% to AUD 1.34 billion
- Variable contribution increased 4.3%
- Reported OpEx decreased 1.1%
- EBITDA increased 14.3% to AUD 217.4 million
- EBIT increased 18.9% to AUD 110.2 million
Net interest expense declined as net debt reduced, and Howell reiterated that the company’s high effective tax rate in the P&L was driven by non-deductible VIP license amortization and the interest discount unwind. Tabcorp’s NPAT before significant items grew 61.5%.
The board declared an interim dividend of AUD 0.015 per share, which Howell said represented a 56% payout ratio and a 50% increase on the prior corresponding period.
License benefit, cost reductions, and capital discipline
Howell highlighted four factors underpinning the period’s earnings outcome, including the full-half benefit of the reformed Victorian Wagering License (compared with only part of the prior corresponding period). He estimated the license reform delivered an increment of AUD 12.2 million of EBITDAR in the first half of FY26.
On the EBITDA bridge, Howell said the incremental earnings uplift from the reformed Victorian Wagering License contributed AUD 21.7 million to variable contribution, offset by AUD 9.5 million of costs, resulting in the net AUD 12.2 million benefit to EBITDA.
Cost actions remained a central theme. Howell said OpEx, adjusted for the reformed Victorian Wagering License, decreased 3.7%. He said underlying costs improved by AUD 13.5 million, reflecting annualization of prior-year actions and continued discipline on discretionary costs. While cost inflation remained a headwind—particularly in technology—Howell said it was more than offset by AUD 13.9 million of cost reductions and AUD 10.5 million of cost benefits related to advertising and promotion (A&P) timing and other actions.
Looking ahead, Howell said Tabcorp expected to incur additional A&P spend of around AUD 5 million in the second half related to the 2026 FIFA World Cup.
Capital investment was also restrained in the first half, with CapEx down 11% year over year to AUD 51 million. The company maintained its FY26 CapEx guidance of AUD 120 million to AUD 140 million, implying a higher second-half run rate tied largely to the rollout of modernized betting terminals under the new retail commercial model.
Strategic milestones: National Tote, TAB Live, retail modernization, and MAX
McLachlan reiterated Tabcorp’s target to deliver a National Tote by the end of the financial year, describing it as a key element of the company’s strategy to increase liquidity and create new product opportunities. He also said a National Tote could expand Australian racing’s global reach through more “World Pools,” and credited Principal Racing Authorities across states for working collaboratively on the opportunity.
He also provided an update on TAB Live, Tabcorp’s replay/in-venue product. McLachlan said the company had recently received ACMA clearance and was building a launch plan for New South Wales, with discussions with other states described as “advanced.” In Q&A, McLachlan said the company had been careful to stay “in lockstep” with regulators and would now actively start rolling out in NSW while working through approvals in each state.
Retail remained “at the center” of strategy, McLachlan said, including a coming rollout of next generation EBTs starting the first week of July. He said the new terminals will deliver aesthetic and functional improvements, facilitate cash use alongside Tap to Pay functionality, and align the terminal experience with the TAB app to support a seamless omni-channel offering.
McLachlan also described MAX as “a consistent and growing business,” noting renewed partnerships during the half and saying Tabcorp was exploring opportunities to expand its footprint.
On brand positioning, management pointed to momentum with younger customers. McLachlan said turnover among 18–24-year-olds was up 14% in the first half, and he characterized the TAB brand as becoming more youthful, sports-oriented, and experiential, citing activations around events such as LIV Golf and the Super Bowl. He also said digital and venue turnover increased 12% for the half, including 26% growth in sport and 42% growth in the 18–24 cohort.
In closing remarks, management said the turnaround plan is on track, with continued cost savings and a strengthened balance sheet. McLachlan added that Tabcorp expects the wagering turnover environment in the second half to be similar to the first half and said the company intends to be “relentless” in executing its strategic agenda through the remainder of FY26 and beyond.
About Tabcorp (ASX:TAH)
Tabcorp Holdings Limited, together with its subsidiaries, provides gambling and entertainment services in Australia. It operates through Wagering and Media, and Gaming Services segments. The Wagering and Media segment offers through a network of TAB agencies, hotels and clubs, and on-course operations, as well as through retail, Internet, mobile devices, and phone. It also provides Trackside, a computer simulate racing product; and international wagering and pooling services. In addition, the company engages in the Sky Racing television channels broadcasting thoroughbred, and harness and greyhound racing to audiences; Sky Racing Active, a digital app providing Sky Racing’s live and on-demand racing content across thoroughbred, and harness and greyhound racing; Sky Sports television channels; and Sky Sports Radio network.
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