Fund Manager Summary
The fund managers believe that Tabcorp Holdings Ltd presents a significant investment opportunity as it shows signs of recovery in the domestic wagering market. In their opinion, the company has made meaningful progress on its turnaround, particularly after a strong May update that highlighted a modest improvement in turnover. This performance stands in contrast to peers like Flutter and Entain, which faced challenges in the first quarter of 2025. The fund managers note that Tabcorp's advancements in retail initiatives, such as In-Play betting, position it favorably for future growth. They assert that the company is well-placed to benefit from operating leverage, which seems to be nearing an inflection point. Overall, the sentiment is positive, with a recommendation to maintain an overweight position in TAH.
Source: Trading View
Commentary From The Managers
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Ten Cap
31 Oct 2025
$1.07
Summary
- Ten Cap continues to hold Tabcorp Holdings Ltd (TAH) due to its compelling mix of cyclical recovery and structural improvement.
- Operational streamlining has created opportunities for margin expansion.
- Improved cash generation is anticipated as wagering conditions normalize.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Ten Cap
31 Oct 2025
$1.07
- Ten Cap continues to hold Tabcorp Holdings Ltd (TAH) due to its compelling mix of cyclical recovery and structural improvement.
- Operational streamlining has created opportunities for margin expansion.
- Improved cash generation is anticipated as wagering conditions normalize.
Summary
Yarra Capital Management
30 Sept 2025
$1.02
- Tabcorp (TAH) has outperformed during the period following a strong FY25 result.
- Delivered a material beat to consensus expectations through cost-out initiatives.
- Lead indicators of TAH’s growth strategy are evident, showcasing market share capture.
- Progress on in-venue, tote unification, international, and media strategies is notable.
- Yarra Capital Management believes TAH is executing well on its turnaround.
- The company is well-placed to benefit from improvements in the domestic wagering market.
- Operating leverage appears to be nearing an inflection point.
Summary
Ten Cap
30 Sept 2025
$1.02
- Ten Cap recently added Tabcorp (TAH) to its portfolio.
- Tabcorp presents a compelling mix of cyclical recovery and structural improvement.
- Operational streamlining is expected to enhance performance.
- There is potential for margin expansion as wagering conditions normalize.
- Improved cash generation is anticipated as the business stabilizes.
Summary
Yarra Capital Management
31 Aug 2025
$0.97
- Yarra Capital Management continues to hold an overweight position in Tabcorp (TAH).
- Tabcorp outperformed expectations after a strong FY25 result, significantly beating consensus forecasts.
- The company successfully implemented cost-out initiatives.
- Lead indicators of TAH’s growth strategy are evident, including market share gains.
- Progress on in-venue, tote unification, international, and media strategies has been noted.
- Yarra Capital Management believes TAH is executing well on its turnaround strategy.
- The company is positioned to benefit from an improvement in the domestic wagering market.
- Operating leverage for TAH appears to be nearing an inflection point.
Summary
Antares Capital
31 Aug 2025
$0.97
- Tabcorp (TAH) delivered a strong FY25 result, exceeding revenue expectations.
- Revenue growth was driven by market share gains.
- The increase in revenue contributed to higher net profit and cash flows.
- Improved cash flows helped to de-gear the balance sheet.
- Tabcorp's strategy of leveraging its omnichannel advantage of digital and cash retail is showing positive results.
- Antares Capital continues to hold due to the belief that Tabcorp is in the early stages of a long recovery.
Summary
Wilson Asset Management
31 Aug 2025
$0.97
- Wilson Asset Management continues to hold an optimistic view on Tabcorp Holdings as Australia's largest wagering and gaming services company.
- For FY2025, Tabcorp reported group revenue of $2.6 billion, marking an 11.8% increase.
- Earnings before interest, taxes, depreciation and amortisation (EBITDA) reached $391.5 million, up 23.2%.
- Key earnings growth was driven by the reformed Victorian wagering licence, contributing $83.7 million.
- Operational cost savings of $39 million were achieved, showcasing strong progress under new leadership.
- Despite a considerable rise in share price post-results, valuation remains low relative to peers.
- There is a belief that the market is underestimating the benefits from strategic initiatives in Retail, Tote, and Media.
- These initiatives are expected to underpin further earnings upgrades.
Summary
Centennial Asset Management
18 July 2025
$0.80
- Centennial Asset Management views Tabcorp as a unique investment opportunity focused on domestic operations.
- Recent management changes, including the appointment of Gill McLachlan, are seen as positive for the company's direction.
- Effective management is crucial in navigating the complexities of state-based operations.
- There are potential cost reductions as the company aims to unify its operations.
- Increased collaboration among tabs could lead to higher volumes and improved financial performance.
- Centennial believes there is significant upside potential in Tabcorp's numbers over the next few years.
- The investment thesis reflects a turnaround strategy in a traditionally conservative sector.
- Current valuation is around 70 cents, with a target of reaching a dollar in the future.
Summary
Airlie Funds Management
30 June 2025
$0.72
- Airlie Funds Management identified Tabcorp as a material detractor, impacting performance by -1.6%.
- The investment thesis was based on the expectation of a levelling playing field with online bookmakers, anticipated to enhance margins.
- While there was some success in this area, underestimations occurred regarding the company's overearnings due to COVID stimulus.
- The stickiness of the cost base also contributed to the miscalculation of sustainable earnings power.
- Consequently, Airlie Funds Management adjusted their position, mostly exiting Tabcorp due to concerns about the balance sheet and the lower rebase of earnings.
- A small residual holding remains post-exit.
Summary
Yarra Capital Management
31 May 2025
$0.69
- Tabcorp (TAH) is currently rated overweight by Yarra Capital Management.
- The company outperformed during the period, particularly following a strong May update.
- Confirmed a modest improvement in turnover, in contrast to peers Flutter and Entain who faced challenges in 1Q25.
- Made progress on retail initiatives, including In-Play betting enhancements.
- Yarra Capital Management views TAH as making meaningful progress on its turnaround.
- The company is positioned well to benefit from an improvement in the domestic wagering market.
- Operating leverage appears to be nearing an inflection point, indicating potential for growth.
Summary
Yarra Capital Management
31 Jan 2025
$0.68
- Yarra Capital Management continues to hold an overweight position in Tabcorp (TAH)
- Outperformance during the period observed despite limited company-specific news
- Progress made on turnaround efforts including the appointment of Michael Fitzsimons as the new Chief Wagering Officer
- Challenges faced include weaker conditions in the domestic wagering market
- Operating deleverage is approaching an inflection point
Summary
Airlie Funds Management
30 Sept 2024
$0.51
- Tabcorp delivered a poor FY24 result, with soft guidance for FY25.
- Prior to this result, Tabcorp’s issues were largely revenue-driven, navigating a cyclical downturn in wagering turnover.
- The FY24 revenue result was reasonable, but issues arose from higher-than-expected costs.
- The cost downgrade was surprising, especially as Tabcorp’s cost base is elevated compared to peers.
- There may be a ‘clearing of the decks’ by the incoming CEO.
- Airlie Funds Management has revised its estimate of sustainable earnings and margins.
- There is now increased balance sheet risk.
- As a result, Airlie Funds Management has substantially reduced its position in Tabcorp.
Summary
Yarra Capital Management
30 Sept 2024
$0.51
- Yarra Capital Management continues to hold a positive outlook on Tabcorp (TAH), despite recent underperformance.
- The company has recently rebased its expectations under new management, which involves removing strategic market share targets.
- There has been a removal of forward guidance for reductions in operating expenses.
- Tabcorp expects lower contributions from the Victorian license in FY25.
- The company has faced challenges due to weaker conditions in the domestic wagering market.
- Operating deleverage is evident, with turnover declining across retail by 0.7% and digital channels by 4.9% during the period.
Summary
Airlie Funds Management
30 June 2024
$0.71
- Airlie Funds Management notes the hiring of Gillon McLachlan as CEO, highlighting his valuable commercial and media expertise.
- The New South Wales Government is initiating a formal review of the wagering tax regime.
- Airlie Funds Management acknowledges that while Tabcorp will need to compensate the Government for any changes to the licence terms, this is a positive step towards a level playing field with online bookmakers.
Summary
Airlie Funds Management
31 Mar 2024
$0.75
- Tabcorp has been the fund’s weakest performer, contributing just under -2% to Fund performance.
- Operationally, the company has achieved milestones in leveling the playing field with online bookmakers.
- The stock has struggled due to a soft wagering market.
- Underestimated overearning during COVID has dampened future return expectations.
- Despite challenges, the stock is considered cheap, trading at around 10x estimated free cash flow.
- Airlie Funds Management remains patient holders of the stock.
- For further insights, refer to the December Fund Update available on the Airlie website.
Summary
Airlie Funds Management
31 Dec 2023
$0.83
- Tabcorp has retained the exclusive retail wagering licence for Victoria, paying $864m for a potential EBITDA uplift of $140m.
- Despite a positive initial share price response, Tabcorp remains the Fund’s weakest performer during the quarter and since inception.
- Airlie Funds Management continues to hold because the wagering operations were previously underearning due to higher tax rates and fees compared to digital-only competitors.
- Management is incentivised to 'level the playing field' and improve profitability as a separate entity.
- Recent changes in Queensland have reduced wagering tax rates from 44.5% to 35%, significantly improving profit margins.
- The Victorian licence win allows Tabcorp to pay the same tax rates as peers, enhancing competitiveness.
- New South Wales is set to review the wagering tax regime, potentially benefiting Tabcorp further.
- Current performance issues are attributed to softness in the broader wagering market post-COVID, but long-term growth is expected.
- Tabcorp's competitive position as the number two player in the market is strong, with increasing barriers to entry.
- As the digital business grows, Tabcorp's financials are expected to align more closely with successful digital peers.
- Current share price does not reflect the potential upside if the investment thesis is validated.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"In a landscape where many stumble, it seems Tabcorp is carving a path forward. With signs of a turnaround and emerging retail strategies, the company appears poised to capitalize on a recovering domestic wagering market—an inflection point worth watching closely."
Last Updated: 31 Oct 2025
Query The Data
Frequently Asked Questions
Who is investing in Tabcorp Holdings Ltd (ASX:TAH)?
Fund managers including Yarra Capital Management, Airlie Funds Management, Centennial Asset Management, Antares Capital, Wilson Asset Management and Ten Cap have invested in Tabcorp Holdings Ltd (ASX:TAH).
Why do fund managers invest in Tabcorp Holdings Ltd?
Fund managers are investing in Tabcorp Holdings Ltd due to its recent outperformance in the wagering sector, highlighted by improved turnover and successful retail initiatives like In-Play betting. The company is seen as making significant progress in its turnaround strategy, positioning it well for future growth as the domestic wagering market improves and operating leverage approaches a critical inflection point.
What happened to Tabcorp Holdings Ltd (ASX:TAH)?
Fund managers are investing in Tabcorp Holdings Ltd due to its strong performance in FY25, marked by an 11.8% revenue increase and significant EBITDA growth driven by market share gains and operational efficiencies. The company's omnichannel strategy, including enhancements in digital and cash retail, positions it for a long-term recovery. Additionally, the reformed Victorian wagering licence and cost-saving measures have bolstered earnings, leading to improved cash flows and a de-leveraged balance sheet. With ongoing strategic initiatives in Retail, Tote, and Media, Tabcorp is seen as well-placed to capitalize on improvements in the domestic wagering market, suggesting potential for further earnings upgrades.