Tabcorp stands down 700 as it reins in costs

Tabcorp is looking to join the queue of companies wanting a government handout as it stands down hundreds of workers.

Tabcorp CEO David Attenborough Picture: Stuart McEvoy

Gaming giant Tabcorp is looking to join the queue of companies wanting a government handout as it stands down hundreds of workers to combat coronavirus-led shutdowns of hotels, clubs and major sport events.

The company announced on Tuesday it was standing down more than 700 employees, mostly from TAB betting booths and ­licensed venues, while other full-time workers will be forced to take at least one day’s leave a week from now until June 30.

Chief executive David Attenborough, who will take a 20 per cent cut to his fixed remuneration, said the company was exploring its eligibility for the government’s $130bn JobKeeper wage subsidy, which will pay workers $1500 a fortnight and is expected to pass parliament this week.

While Mr Attenborough did not give any financial guidance, the interest in JobKeeper is telling. Companies wanting to access the scheme must show a 50 per cent plunge in revenue if their annual turnover is more than $1bn.

“This continues to be a very challenging time for our people, businesses, partners and the community,” Mr Attenborough said.

“Our focus is on retaining jobs for the long term. We are committed to working proactively and collaboratively with all our stakeholders so that we can collectively emerge from the COVID-19 ­period as strongly as possible.”

Mr Attenborough said other full-time workers would take at least one day of leave per week until June 30 and the company would cut the number of technology contractors by 40 per cent

Chairman Paula Dwyer and other board members will take a 10 per cent fee cut.

Mr Attenborough said Tabcorp could not reliably quantify how much the COVID-19 pandemic would hit its earnings.

While the coronavirus has led to the suspension of major sporting codes, Mr Attenborough said the company’s lotteries and Keno division and wagering and media digital channels continued to operate, with thoroughbred, harness and greyhound racing continuing across Australia, except in Tasmania.

“Tabcorp is seeking to mitigate the impacts of COVID-19 on the group’s businesses and financial position by reducing operating and capital expenditure and reviewing various commercial arrangements,” he said.

Tabcorp has reduced its capital expenditure program from a forecast $160m to $120m. It is also gaining liquidity support through a six-month deferred settlement of state payroll, Keno and lotteries taxes, which normally total more than $40m a month.

It follows Tabcorp expanding its banking facilities through an additional $226m short-term facility, payable in July 2021, late last month. As of last week, the company said it had undrawn facilities of $100m and unrestricted cash of $649m.

“Other than the US private placement of $171.5m, fully hedged, which matures in December 2020, there are no other debt maturities until April 2022,” Tabcorp said in a statement to the ASX.

Tabcorp has also suspended payment from licensed venues of fees owed relating to Sky Racing, TAB, Keno and MAX contracts.

The suspension will initially be for the month of April.