Tabcorp managing director and chief executive-elect Gillon McLachlan has put a national tote pool firmly on his reform agenda, highlighting it as a key ambition of the new strategy he is pursuing at the embattled wagering company since taking the role in August.
McLachlan addressed Tabcorp shareholders for the first time at the company’s annual general meeting (AGM) and set out his agenda for change, saying that while the business foundations are strong, he would be announcing a major structure change in the coming weeks.
“My job is to further simplify the business, be more cost-effective, agile and unlock the opportunities that lie within this outstanding asset base,” McLachlan said.
The prospect of a merged national tote pool has been long rumoured but has yet to be confirmed.
“We support a national tote. I support a national tote. A national tote increases liquidity and provides more options for customers,” McLachlan said.
“It can also deliver a stronger result for our racing partners. I commit to working with all racing bodies and regulators to do all we can to make a national tote a reality. Our assets hold the key to our growth.”
A key plank of that will be the review of the current deal in NSW, currently being undertaken by the NSW government, where Tabcorp seeks to substantially alter the deal it has in place until 2033. It executed a similar strategic switch in Victoria with a 20-year deal agreed late last year under previous CEO Adam Rytenskild.
McLachlan said executing any new deal in that space was a major priority of his first year in charge.
“The NSW review process is underway,” he said.
“It will be difficult but I'm personally participating in this process to deliver a level playing field in which we can compete more fairly and more evenly. This is very important. The tote remains an incredibly valuable offering for TAB.”
Outgoing Tabcorp chairman Bruce Akhurst said the NSW business had driven the lion’s share of the impairments, which impacted Tabcorp’s bottom line in 2023/24.
Bren O’Brien
McLachlan described wagering as the foundation of the Tabcorp business.
“I've got a clear focus on people, capability and execution. A key focus will be bringing in additional wagering capability and experience at the senior leadership levels. Wagering is the foundation of our company,” he said.
“I also want to stress to shareholders that reducing cost and ensuring we have the right operating model is a top priority for me.
“In addition, I'm working with the team on a detailed review of our entire operating cost base as well as our capital spend to identify and execute on further opportunities to reduce our cost base.”
“I'm focused with my team on making Tabcorp a fitter organisation. That requires a reset of team, culture and cadence around the organisation. An organisation that can do more with less because we are a simpler and more focused organisation.”
Tabcorp’s share price has lost nearly half its value in the past 12 months, from 85 cents to 46 cents, with a $1.36 billion loss, driven by impairments in the business's NSW and South Australian aspects, announced for the 2023/24 financial year.
McLachlan assumed the role two months ago. He will be paid a base salary of $1.5 million a year and has already set about making major changes in an attempt to turn around the company’s fortunes.
He said Tabcorp's digital experience was vastly improved and opportunities remained in the retail and media sectors of the business.
Bren O’Brien
“I see significant value in our unique retail business. People are back in the pubs. I'm back in the pub. Cash betting outperformed digital in FY24 and I'm working closely with the team to continue to leverage our retail footprint,” he said.
“The media business is exciting and this is a long-term growth opportunity for TAB. Sky is a highly attractive business with an unrivalled breadth of domestic and international broadcast rights and a global distribution footprint that we will take a hands-on approach in locking further value going forward.”
The CEO-elect also said he felt that there was value to be gained for Tabcorp in a tighter regulatory environment
“I also know the time for talking is over and it needs to be done. There is no doubt there are challenges in a softer market but the wagering sector has long-term resilience and Tabcorp is very well positioned to capitalise with our unique asset base,” he said.
The AGM was the last of Akhurst’s duties as Tabcorp chairman as he handed over to Brett Chenoweth. Janette Kendall was also re-elected as a director.
The board avoided a “second strike” and potential spill after this year’s remuneration report was approved by more than 75 per cent of shareholders.
