Tabcorp is in a court battle and it's killing profitability

Michael Dodge/Getty Images

The cost of fighting court action for non compliance of anti money laundering rules and of launching a new business in the UK have taken a toll on Tabcorp’s profits.

The gaming group’s profit fell by 33.1% to $81.9 million for the six months to December.

The company says it’s been hit by significant costs including $7.2 million relating to civil proceedings by AUSTRAC, Australia’s financial intelligence body, and $8.4 million preparing for the launch of the Sun Bets business in a joint venture with the Sun newspaper the UK.

In the Federal Court, AUSTRAC is alleging extensive, significant and systemic non-compliance with Australia’s anti-money laundering and counter-terrorism financing legislation.

Tabcorp says it will fight the bulk of charges.

In its six month results today, Tabcorp’s overall revenue was up 1.8% to $1.135 billion. TAB Racing, the biggest contributor, was up 2% to $895.3 million.

CEO David Attenborough says the company is well positioned to drive future performance, maintain expense discipline and achieve 14% return on invested capital by 2017.

Tabcorp announced an interim fully franked dividend of 12 cents a share, up 20%.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.