Bruce Akhurst’s time as Tabcorp chairman was brutal
The wagering giant is fighting to cope with competition, its technology is struggling and shareholders have been critical of its board. The turnaround will be long and difficult.
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Bruce Akhurst will likely be remembered as one of the Tabcorp board members that knocked back a $3.5bn takeover for the wagering and media company.
Tabcorp now has a market capitalisation of about $980m, and Akhurst is gone following the announcement after market close on Thursday that he is stepping down as chairman.
Tabcorp’s performance under Akhurst has been mostly disappointing – some critics have called it abysmal of late – since he became chairman of the company after its May 2022 demerger from The Lottery Corporation.
Profits are down, revenue is sliding, and market share has been lost.
The demerger was designed to unlock the value in the lotteries business (now worth $11.3bn) and to get it away from the underperforming wagering division, a topic that was heightened after Tabcorp’s then chairman Steven Gregg (with Akhurst on his board), rejected $3.5bn takeover bids from Entain Group and private equity for the wagering arm in 2021.
It was the heady days – for the betting industry, at least – of Covid lockdowns when racing kept going and punting peaked. But the Tabcorp board decided to go it alone with the belief they could do a better job on its own than combine with Entain or any other bidder.
It has proven to be a bad decision.
There were certainly regulatory hurdles, including NSW legislation that caps shareholders from owning more than 10 per cent of Tabcorp, but in hindsight the decision to not even have serious discussions with the bidders was wrong.
The takeover offer was still on the table when Akhurst became chairman of the standalone Tabcorp a little less than two and a half years ago, but it is understood phone calls, messages and emails from potential bidders were ignored.
Tabcorp’s share price initially went up, but this year it’s performance has been dreadful.
Chief executive Adam Rytenskild resigned suddenly in March after revelations of alleged vulgar remarks about a female regulator. Meanwhile, inflationary pressures are causing punters to bet less and Tabcorp’s much vaunted technology updates have flopped at times, with its app lately failing during crucial race days.
Its TAB brand is also considered tired and analysts have been critical of the company’s cost base. It needs to make an acquisition or find a way to get some market share from its digital corporate bookmaker competitors, but would have to raise capital to do so. There are clear cultural issues inside the company.
“I’m proud of our achievements since Demerger. We’ve moved quickly to transform the company. We’re a faster, more innovative and more responsive organisation today than we have ever been,” Akhurst said in a statement on Thursday.
He will be replaced at the end of the year by Brett Chenoweth, who joined the board in August 2022 following the demerger.
Meanwhile, newly installed CEO Gillon McLachlan was at pains to distance himself from previous management’s strategy at Tabcorp’s recent results announcement.
But the share price has kept sliding – it is down 48 per cent since January 1 – and feedback from investors has been negative. Akhurst’s resignation has been their prize.
Akhurst has personally backed Tabcorp, accumulating 1.4m shares, and has plenty of respect as a person.
Racing NSW chief executive and industry powerbroker Peter V’landys praised him when approached by The Australian for comment.
“I’m very disappointed Bruce has resigned,” V’Landys said. “He was a very good chairman and with Gill was going to be a formidable team to take Tabcorp forward.”
The power at Tabcorp now clearly resides in former AFL boss McLachlan’s hands.
He has a very big job ahead of him to turn both the culture and financial performance at Tabcorp around.
Originally published as Bruce Akhurst’s time as Tabcorp chairman was brutal
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