In Queensland, Tabcorp will make $150m in payments to the government by March 2023, conditional on legislative reform. In return, the company’s tax and fee structure will be harmonised such that gross profit could increase by up to $30m.
In NSW, the government has signalled its intention to level the playing field and allow for a tax transition allowance, to ensure Tabcorp is not worse off.
Credit Suisse points out there is a risk that Tabcorp fails to secure necessary reforms in NSW or extend transition payments and in that case it could be worse off by about -$16m in gross profit from FY25. Outperform retained. Target rises to $1.30 from $1.25.
Sector: Consumer Services.
Target price is $1.30.Current Price is $1.07. Difference: $0.23 – (brackets indicate current price is over target). If TAH meets the Credit Suisse target it will return approximately 18% (excluding dividends, fees and charges – negative figures indicate an expected loss).