1. Company Information
(a) Name: TABCORP HOLDINGS LIMITED
(b) ASX Code: TAH
(c) Address: 5 Bowen Crescent, MELBOURNE, VIC, AUSTRALIA, 3004 (d) Website: http://www.tabcorp.com.au/
(e) GICs Industry Group: Consumer Services
Reference: asx.com.au, company information for TABCORP HOLDINGS LIMITED
2. News Article: Tabcorp meets profit expectations
Date: 9th August 2012
The newspaper article posted on the Sydney morning herald is mainly focused on TABCORP's financial position, its share prices and its revenue goals and targets. It has been clearly stated in the article that TABCORP share prices had fallen down by 5 percent and that they had shocked the market by decreasing their share prices by 5.1% to $3.14. It is also stated that the decrease in net profit from 2011 to 2012 is due to their license of their poker machines and casino businesses as they have already lost their poker license on Victoria. However, Tabcorp have also gotten an opportunity to start a new Keno Business in Victoria and Tabcorp Gaming Solutions in Victoria as well. TABCORP's new animated racing game, 'Trackside', also has good growth over time with its revenue rising by a huge leap of 65.6% to $82.3m due to its expansion in New South Wales and continued growth in Victoria. It is also stated that online growth has been high as customers have moved from using call centers resulting in the betting done via call centers to decrease by 6.8% as well. Finally TABCORP have stated that their final dividend of 11c per share will be put into effect and that their targeted dividend payout ratio is 80% of the net profit excluding the write off from the Victorian gaming goodwill.
3. Income Statement of TABCORP
(a) The Profit margin ratio basically used to calculate the net profit as a percentage of the revenue. It also indicates the profitability of a company and is mostly used for internal use only. The formula for calculating profit margin is: (Profit / Revenue) x 100%. (b) Net Profit Margin of TABCORP HOLDINGS LIMITED
$534.8m x100% = 18.14%
$340m x 100% = 11.18%
The Net Profit after tax for TABCORP HOLDINGS LIMITED for 2012 is $340m. During this financial period TABCORP's revenue was $3038.5m. From this we can calculate the net profit margin for Tabcorp which is 11.18%. This means that for every $1 of revenue tabcorp earns its profit from it will be $0.11 or 11c. The net profit margin is lower than the one in 2011 which was 18.14% which meant in 2011 ever $1 revenue of tabcorp would generate a net profit of 18c. Here we can clearly see that even though the revenue of tabcorp has increased from 2011 to 2012 its profitability has decreased which tells us that their expenses have also increased in 2012 compared to their expenses in 2011. The article provided by the Sydney Morning Herald has shown why the profitability of TABCORP has decreased which is mainly due to the expiration of its poker and casino license in Victoria. Reference: TABCORP HOLDINGS LIMITED Full Annual Financial report 2012, Page 1
4. Statement of financial Position
(a) The total debt of TABCORP HOLDINGS LIMITED has increased from 2011 to 2012, the long term liabilities increased from $1627.6m on 2011 to $1843.2m on 2012. We can see from the statement of financial position posted by tabcorp that the long term payables they had in 2011 have all been payed off. However, Interest bearing liabilities on the long term liability section have increased from $515.2m to $1224m which is the biggest change has which has affected their total non-current liabilities by the largest amount. Furthermore, derivate financial instruments have also increased in their non – current liabilities.
(b) The largest Current Asset of TABCORP HOLDINGS LIMITED: Cash and Cash Equivalent at $151.4m Reference: TABCORP HOLDINGS LIMITED Full Annual Financial Report 2012, Page...
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