Tabcorp Holdings Limited (TAH) Earnings Call Transcript & Summary

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Tabcorp Holdings Limited Full Year Results 2023. [Operator Instructions] Please be advised that today's is conference being recorded. I would now like to turn the call over to your first speaker today, Mr. Adam Rytenskild, MD and CEO. Thank you. Please go ahead.

Good morning, and welcome to Tabcorp's FY '23 Full Year Results. I'm CEO, Adam Rytenskild, and I'm joined on the call by our CFO, Dan Renshaw. As you know, we announced this morning that Dan will be standing down as CFO for personal reasons. I want to personally thank Dan for the role he's played in the successful demerger and foundation here is new Tabcorp. Dan will remain as CFO for next week's roadshow and assist with the transition. I'm pleased that Damian Johnson will step in as interim CFO while we complete a search to replace Dan. We'll take you through the presentation we lodged with the ASX this morning, outlining our results and then we're happy to take your questions. Today is about updating you on the business performance in FY '23 and marking it against our TAB25 ambitions. As always, we'll provide a breakdown of each business unit performance and outline our plans for FY '24 as we continue to invest in our transformation. Since our demerger 12 months ago, I've been very clear that we're creating a simpler and more nimble business that delivers more value for you, our shareholders. In our foundation transformation year, we generated enormous change at Tabcorp. We disrupted ourselves in the market. Tabcorp is a very different business today than it was a year ago, and it will be different again by the end of FY '25. As you know, TAB25 is our vision and plan for our 3-year transformation. Year 1 was about building the foundations, getting the product, the policy settings and the people right so that by the end of FY '25, we have a transformed business. With year 1 now under our belt, I'm confident in creating TAB25. Yes, the market has softened since we set those targets, but we have our structural reform levers for how we'll create 10% ROIC. We're one of the few companies in the sector that have multiple growth relievers right now, and we're focused on delivering them. By the end of FY '25 will be a very different company with more customers and more profit. You'll have a clear view of the profit potential understand the ambition for our strategy beyond TAB25 and have confidence in our ability to deliver it. FY '25 is the year you will see what this company really looks like. I'm pleased to report that we've delivered on our FY '23 priorities of laying down the foundations for sustainable growth. Despite challenging market conditions, we've grown revenue and grown earnings. We've got our product growth with a new app and 10 subsequent updates in 9 months that have closed product gaps with our competitors and enabled us to grow our active customer base. We've proved we can match-speed the market, and we've given our customers an innovative and simple product to use. We delivered critical structural reform in Queensland with a level playing field now legislated. And since the level playing field was implemented on 1 December, Queensland has outperformed the group on almost every metric. Victoria will become a level playing field from August 2024 and New South Wales has commenced the process. We have a talented team and have enhanced it by hiring key people from across the support, communications, banking and wagering industries. Our extended leadership team is smaller and highly capable. We've reduced the team from over 50 general managers a year ago to around 35 today, more than 1/3 of new talent who have brought new capability and a winning culture to the business. And Gaming Services is now very much an Integrity services business with the new Tasmanian monitoring license now operational and the sale of eBet. And today, we also announced the sale of MAX Performance Solutions or what remains of the old TGS -- this further simplifies our business. Getting these foundations right has laid the platform for how we'll deliver TAB25. I'm pleased to report we delivered strong FY '23 financial results against the tide of a softer consumer market. Despite increased sales and marketing spend by our competitors, we've remained strategic and disciplined. We grew group revenue by 2% to $2.43 billion, reduced costs in line with our TAB25 target range and delivered 8% growth in group EBITDA to $391 million as well as increase in group EBIT by 103% to $150 million. Dan will provide a more in-depth overview of our financials shortly. But before he does that, I think there's merit in recognizing the significance of our F '23 financial performance. We demonstrated our disciplined approach to sustainable growth making us the only big 3 Wagering business operating in Australia to report growth not only in active customers, but also growth in revenue and growth in earnings. As you all know, TAB's digital transformation is well underway. We've reshaped the business, and it will continue to evolve. We're going to win the game with market-leading offers and products and backed by a simpler and more agile operating model. We'll shape the game with level playing field reforms, continuing to lead the market in customer and community care and pivoting from gaming services to integrity services and will change the game with a renewed culture and values as a company. Now make no mistake that we are driving a cultural revolution within Tabcorp. Culture is critical and it will underpin the success of our transformation moving forward. The days of old Tabcorp were defensive behavior and underperformance were rewarded are now gone. We've had 10 updates to our app in 9 months. In old Tabcorp, that would have taken over 2.5 years. I'm proud that in FY '23, we sparked change. Our largest competitor responded with marketing spend increasing by over 20% while our marketing spend increased by just 4% in the second half of FY '23. Despite that, we grew total share. We grew turnover share. We grew rating revenue share, grew customers and we grew both Sport and Racing multis. This gives me confidence that we're on track and our transformation is working. There's no secret that the macroeconomic and regulatory environment is becoming more challenging. We're adapting to this environment positively, and we ultimately see it as a key advantage for our business. We embrace the role that regulators play and will continue to adapt our business to meet their requirements across every jurisdiction. Ultimately, though, we believe that their regulations and controls should apply to every operator to take bets and advertise in the markets that they regulate. And that is why we've advocated for nationally consistent regulations. From a business perspective, we have scale across Digital, Retail and with our vision rights to withstand economic impacts. Scale and channel diversity presents the opportunity to reach more customers across more footprints in venue, at home and on our apps than any competitor. As you can see on the screen, we're better connecting our customers, be it at home on a device or in a venue. We'll continue to ensure these core pillars connect even more closely to enhance the customer experience. This is our key advantage and every decision we make will align with the graph you see on your screen. This result highlights that our key customer metrics are heading in the right direction. It shows we're now trending up in the right areas, and we're on track to grow market share over the next 2 years. We have a record 805,000 total active customers, a 3% increase on last year, and that has been achieved in a disciplined way in conjunction with earnings growth. We're not pursuing market share growth at any cost. We're being targeted and disciplined in our approach and investing in growing share by enhancing customer experience. This is evident in TAB continuing to grow as the first betting app of choice for customers. Increasing to 29% and growing preference amongst younger demographics with a 3-point increase year-on-year. The launch of Same Game and Same-race multis, are a game changer for our business. Active multi users have increased by 14% and multi turnover has increased 10%. These are high-yielding products, and most of that growth was at the back end of the financial year. We're confident we'll see a continuation of that growth in the start of FY '24. To our key metric of market share, Total revenue share for TAB increased to 34% from 32.5%. It's terrific to see total share increasing, and this demonstrates the strength of our Wagering ecosystem. This, combined with the share increases across turnover in sports was pleasing. Our Digital revenue market share metric has remained relatively stable at 24.5% and slightly lower than last year's 24.9%. In context of the other metrics, I'm pleased we're holding share, given aggressive generosity and marketing spend from our competitors, and pricing decisions made by smaller operators attempting to prioritize profit in a more challenging market. Our revenue share metric was negatively impacted by sport yields in the fourth quarter which grew slower than our competitors. We get asked regularly if we'll achieve our TAB25 target of 30% through excessive generosities at the expense of earnings. Our FY '23 financials demonstrates -- that might be the case. They also demonstrate that we can grow total revenue share and earnings in challenging market conditions. Despite spending less on generosity and marketing than our competitors, the strength of our new product offering has been highlighted in our results today. All key levers have grown, which give me confidence that we'll see this translate to digital revenue market share growth within our TAB25 time frame. Now we've been very clear that to grow, we must do better in sports. I'm pleased to say our key sports metrics have improved. Active digital customers are up 3% but most importantly, 8% in the second half of the year. Turnover has increased 17% as has net revenue. Our Same-game multi-products are growing rapidly with a 33% increase in turnover and 45% for the second half of the year. We expect that to continue to grow in FY '24. This shows that more customers are becoming aware of our new product offerings. And as our new brand camp highlights Sport is our support. Tabcorp has the best Wagering ecosystem in Australia. We're the only company that can connect digital, retail and venue and media into one complementary ecosystem. FY '24 will be about implementing a new innovative retail network. We'll have 50 venues in Phase 1 and we'll then evaluate their performance and customer feedback before launching a second round of venue upgrades. We're confident our new win -- venues will increase foot traffic better connect that have experience and be a bedrock for our future growth. We want to be the best sports entertainment company in Australia, and our retail upgrades will be part at the heart of that. You can see the slide on screen, one of our newly refurbished venues, the [ Zagami Core Field ] in Victoria. FY '23 highlighted that TAB will be far more competitive in an environment with a level playing field. Queensland was our best-performing state after the implementation of the level playing field in December 2022, outperforming the group in key metrics. Importantly, leveling the playing field has also been better for Queensland and for racing. So an all-around win-win outcome for the industry and why we think level playing fields will be implemented across the country. Our Queensland active customer growth was 9% higher than the group turnover was 5% higher than the group. Net revenue was 4% higher and VC growth was 26% higher. We see this as an indicator of what TAB will look like once level playing fields are implemented nationally. Make no mistake, it's a game changer for our company. Queensland has shown just how quickly we can grow with a level playing field, and we expect those figures to be mirrored as other states implement reforms, which assists us to achieve our TAB25 targets. TAB continue to lead the public debate for industry reform in Australia. We know the Australian community expect more from wagering operators, they are sick of being bombarded with gambling advertising. We welcome the Federal parliamentary inquiries recommendations to reduce gambling advertising and the recommendation for a federal regulator. A federal regulator will ensure all Wagering operators are governed by the same standards, and this is essential to ensure safety for Australians in a socially responsible wagering market. I've said many times over the last year that growth will not be at the expense of customer care. In FY '23, we highlighted that with a new groundbreaking partnership with Mindway AI who will use cutting-edge technology to allow our people to intercept and help potential problem gambler sooner. There will be no [ set ] to get in this area, and we'll continue to invest. Our Gaming Services business has pivoted to Integrity services. We're now monitoring all electronic gaming machines in Tasmanian pubs and clubs as we do for all machines in New South Wales. We've sold eBet. And as I mentioned today, we announced the sale of MAX Performance Solutions or the old TGS business. Our EBITDA across Integrity Services has increased 36% -- this is an outstanding achievement for the company, and we have CPI-linked price increases for New South Wales monitoring from 1 July this year. Our Integrity Services business is a valuable asset and will become more valuable as a regulatory focus for increases on gaming machines. You can now value it more easily. Dan will now provide you more detail on our financials. Thanks, Dan.

Thanks, Adam, and good morning to everyone on the call. As Adam mentioned, I'm stepping down as CFO for personal reasons. I've immensely enjoyed the last 11 years. And today, I'm really proud to talk about a strong set of numbers after the first year of new Tabcorp. On Slide 16, it shows you the group results for FY '23 compared to the FY '22 pro forma and the statutory result from continuing operations. Compared to the FY '22 pro forma, we generated 2.4% revenue growth translating to 8% EBITDA growth as we delivered OpEx below the F '22 pro forma and below the guidance. D&A of $241 million was down on the PCP and I'll give some more detail on D&A shortly. EBIT more than doubled to $150.5 million. The waterfall chart on Slide 17 shows the components that drove that 8% EBITDA growth. As you can see, VC increased in both Wagering & Media and Gaming Services. As our revenue rebounded from the COVID impacted prior period, and we grew total revenue market share. This was partly offset by a decline in the digital wagering market and we increased generosity in the period in a competitive market. We benefited from a reduction in group OpEx, which was a pleasing result given the inflation that's evident in the economy, and we're seeing good early progress from the Genesis program. Speaking of Genesis and turning to Slide 18 on OpEx. We had a very tight focus on cost for the period, given the backdrop of inflation and a softer top line environment. Now cost performance was really driven by two things: firstly, what I would call in-year reductions driven by vigorous BAU cost control. This was particularly evident in our technology area, where we reduced managerial layers and we reduced the use of high-cost contractors. In marketing, Jenny Barnett has previously spoken about the opportunity to change the mix of our spend and do less above the line. And in doing so, we increase the efficiency of that spend during the period. The second driver was that there was more structural changes from our Genesis program, which began to deliver benefits, particularly in the second half. As you can see in the chart, our F '23 cost performance has placed us within our FY '25 target range already and created capacity for us to accelerate investment in FY '24. In particular, in FY '24, we're going to be investing in our brand. We're going to be repositioning it to capture the opportunity we have in sport and in a younger audience, and you'll see that in the first half. We also continue to invest in capability, particularly our data and analytics team to drive personalization, conversion and efficiency. As a result, we expect F '24 OpEx to increase by around 3% to between $630 million and $640 million before it declines again in F '25 back into that $600 million to $620 million range. Turning now to the balance sheet on Slide 19. Our net debt closed to $204 million, with cash conversion of 104% after adjusting for some one-off items including the $160 million race in Queensland settlement payment in the first half, which is what delivered the level playing field in that state. Investing cash flows included our investment in Devil the final Queensland license installment and the proceeds from the sale of EBIT and EGMs in addition to normal CapEx. As you can see on Slide 20, we're in a strong funding position to pursue our TAB25 transformation. Post the settlement of the USPP in March, our average maturity extended from 3.7 to 4.7 years. And we ended the year with $950 million of undrawn debt facilities. Leverage is sitting at 0.9x, and that's slightly below our current target of 1 to 1.5x. On Slide 21, CapEx for the year was $155 million, slightly ahead of the $150 million guidance due to the timing of some initial spend for our next-gen retail upgrades and the accelerated digital product development, including 10 product releases that you heard Adam referenced earlier. We continue to increase the proportion of CapEx invested in growth and transformation as well as in the sustainability and risk bucket. FY '23 D&A was $241 million, as I mentioned before, and it was below the guidance of $250 million to $260 million. The variance between those two is attributable, firstly, to the final mix of capital spend between shorter life, what I call digital features and the longer life technology and product assets relative to our prior expectations. This was in addition to the MPS business being classified as held for sale, which paused the D&A during the period. Turning now to the divisional performance on Slide 23. FY '23 was a somewhat distorted year given we saw unsustainable promotions from a new entrant. And our largest competitor increased marketing and sales spend by 23% in the second half. We increased our generosity in FY '23. However, we kept our combined generosity and marketing spend to 4% growth with a higher weighting to the first half as we invested in the new TAB App. Still on Wagering and Media on Slide 24, you can see the strong rebound in cash revenue, up 25% as our customers return to socializing and bidding at venues following the COVID impacted prior year. Digital wagering revenue was down 12% as the Digital Revenue market declined in F '23. VC margin was flat, and that included a 150 basis point increase in Wagering VC margin in the second half when you compare it to the first half, and that reflected the benefits of the Queensland license reform. Media and International VC increased due to cycling of subscription relief provided to venues in the PCP, along with increased vision export revenue and the benefit of new digital vision distribution agreements. On Slide 25, you can see total turnover increased 4.7% in F '23. In the second half, we saw a turnover decline of 1.8% with a 5% decline in racing turnover and that more than offset a 14% turnover growth in sport. Our net yields in digital were impacted by generosity spend in FY '23. And while our generosity levels remain below competitors, we did make the decision to increase customer investment in what was a competitive market during the year. Moving now to Gaming Services on Slide 27. EBITDA increased significantly, driven primarily by strong cost performance and the cycling of COVID in the PCP. On Slide 28, you can see Integrity Services revenue and earnings increased strongly in the year. This was driven by higher monitored EGMs, price increases and the previously mentioned cost control. Integrity Services CapEx of $21 million was higher than the PCP as we spent capital in preparation for the Tasmanian monitoring license, which is now live. We've entered into a sale agreement for the MPS Gaming Services business for $21.3 million. This follows the sale of the eBet Gaming Services business and is in line with our strategy. What we are now left with is a Monitoring Business, which is high-quality Integrity Services business, and it's easier for the market to value. The MPS business was marginally profitable in F '23, delivering less than $3 million of EBIT as a significant number of EGM contracts rolled off from August 2022. MPS incurred CapEx of $12 million in F '23. You'll see in the financial statements, the MPS business is held for sale at year-end, and we have taken a $49 million impairment as a result. The sale is subject to regulatory approvals and is expected to complete by the end of calendar year '23. And I'll now hand back to Adam.

As you can see, we've delivered on our F '23 priorities, and we set the foundation for achieving our TAB25 targets. Despite soft market conditions and increased competitive response to our strategy, we delivered growth in active customers, revenue and earnings. We're the only one of the big 3 Wagering companies to grow revenue and EBITDA and we've been demonstrated that we'll be disciplined and waiver from the implementation of our plan. These are all signs that our business is heading towards achieving its goal of being a more valuable company for investors. FY '24 is the important middle leg of our 3-year transformation. Having closed the product gap with competitors will seek to become a product leader with innovative new opportunities for customers. We'll launch a new brand campaign in the first half of the year. We'll complete 50 next-gen venues in Phase 1 of our retail upgrade. There will be a Victorian license outcome and will successfully transition into a new era regardless of the outcome, and we'll continue to work to deliver level playing fields in New South Wales and South Australia. FY '23 highlighted that Tabcorp is delivering on what we say we'll do. We've launched new products, increased speed-to-market, level playing fields, pivoted our gaming services business and achieved our cost reduction strategy. Our FY '24 priorities are clear, and we look forward to updating you on that journey this year. Tabcorp is becoming a more valuable company, and I can't wait to show you the fruits of the strong foundations when we reach TAB25. Thank you, and I'm happy to take your questions.

[Operator Instructions] First question comes from the line of Bradley Beckett from Credit Suisse.

Well done a really strong cost performance. Are you able to share any early feedback that you've received from those next-gen venue upgrades that are already in place in Victoria and New South Wales?

I can -- look, it's very early days. We actually -- the first 1 was actually only updated about 4 weeks ago, and the first ones are in Victoria. I think we've got 4 or 5 in market at the moment. What I can say is that the response has been really positive and consistent across the in performance uplift across the months that have opened in foot traffic and turnover has been really positive. So without putting a number on it, we're really encouraged. The other thing that we're encouraged by, it's not just cannibalization from venues around them. So early days, but positive so far.

Yes. Okay. And secondly, is the CapEx going to skew a bit more heavily into the second half? With that 50 venue target, you've still got the Victorian license to be announced in November. So you're going to sort of wait until that decision or it's just going to be -- keep deploying through first half?

It's Dan here. I'll take that one. No, it won't skew particularly to the second half. The good thing about having a strategy that's well in place and well set -- it means that all of our programs are largely in train. So a lot of the spend in FY '24 remains geared towards digital and product. And so that should keep the CapEx profile reasonably smooth.

Next up we have the line from Simon Thackray from Jefferies.

Thanks, Dan. Thanks, Adam. You hear me okay? Yes. Fantastic. Just in terms of the -- again, on CapEx, Dan roughly the buckets you've seen the bucket this year? Are they ostensibly the same sort of proportion in '24 between maintenance growth and sustainability?

Yes, Simon. Look, it will be roughly the same. Everything skewing towards growth and transformation and risk and sustainability. And that's really appropriate for both our strategy and the environment we're in. But you'll see, as I said just before, a lot of spend on digital and product, and you'll see the spend on retail upgrades.

And Dan, just for complete clarity, the D&A for MPS, which you've sort of indicated in the slide is about $15 million, was that in or out of the $240 million that you delivered?

Yes. No, the $15 million in the $240 million, but what I did call out was that it was about $4 million or so of D&A reduction as we change the classification of the MPS business to held for sale.

Got you. Got you. That's helpful. Okay. And then, Adam, just in terms of the competitive intensity, which is -- have been written about, talked about in the fourth quarter in particular. Can you talk about the current market environment in terms of competitive intensity? And what you're seeing from -- in terms of competitor spend and generosity, et cetera?

What I will say is when you launch a transformation strategy as typical, the market response, and we saw that during the year. We saw a better launch probably before they wanted to with a pretty disruptive strategy. We saw our biggest competitor massively increased their marketing spend into the second half. We've seen [indiscernible] trying to disrupt the market we stuck to our guns, just focused on delivering and really happy that we've done that, been disciplined. The market remains certainly competitive, but there's no -- you've seen Sportsbet's results and [indiscernible] results. It's no secret that the market gets soft. So it's competitive, I expect it to increase in competitiveness going into the footing finals and into spring racing, and we're just focused on delivering the second leg of our plan.

Thank you for the questions. Our next question comes from the line of Rohan Gallagher from Jarden Group.

Good morning, everybody. Can you hear me? .

Yes.

Can you hear me?

Yes.

Thank you for your time today. Two questions, if I may, operationally, Adam, there seems to be a disconnect between the digital CapEx investment with the refreshed new products, like of market share gains and the lack of market share gains. Is that a function of timing, exposure to key end markets? If you could unpack that, that would be greatly appreciated.

Sure. I think the first thing I'd say, I'm actually really comfortable with our market share metric -- we grew total share. And you can see our customer metrics there, there's a lot of green shoots and that's new for us as a business. So I'm really, really comfortable with what it's delivering. I don't think there's a disconnect at all. It does take time to create momentum, and we're absolutely on track. So look, I think the function of growth is a combination of things. It's new product the brand we're relaunching at the moment and also our spend on generosity and marketing in an environment where our competitors were significantly increasing their spend on generosity and marketing and us staying disciplined while focusing on our customer experience. I'm really comfortable with where we're at. The other thing I'd just say is that market share metric is alive on the Hill. I've said this before. We're focused on achieving it. But the real purpose was to change the focus and the culture and the plans of this company and turn us into a digital competitive organization. And it's absolutely doing that. You can see that right throughout our results, throughout our initiatives, through our focus on CapEx and how we're spending it, and frankly, even in our retail upgrade and how we're connecting the two. So I'm really happy with how it's going and got confidence in TAB25 and how we're going to deliver it.

And Dan, first of all, best wishes in your new ventures. In relation to the OpEx guidance, $630 million to $640 million seems to have been a little bit elevated on the pathway back towards your stated and maintained FY '25 OpEx guidance. Is that a function of spending money to make money? Is that a function of specific new products or projects? Or is it just a function of conservative guidance?

Thanks, Rohan. Look, I wouldn't describe it as a conservative guidance. What I would say is that underlying the cost base will continue to trend down through '24 and '25 with the benefits of Genesis. Now I should highlight the Genesis program exited F '23 with a run rate of savings of $20 million a year. That will continue to build through '24 and '25. But we have got a reasonable cost inflation environment. And we're also then reinvesting quite strongly in two areas. So the brand that we've talked about a couple of times already on the call, that's a repositioning of the brand for sport and for younger audience so that we can really drive our competitiveness. That comes at a cost. And that's really smart to do at this point in time given where we landed in F '23. We're taking that chance reinvest a little. The second area is in capability around data and analytics. And I think the Investor Day in May, the market heard from Amy Shi-Nash who we brought in, and she's really driving that data and analytics capability, and we're going to keep investing there.

And whilst I've got you, just in regulation to your interest rate exposure. Can you just comment about what's fixed and what's variable and any sensitivities to interest rate movements at the moment, please?

Sure. So the USPP is fully drawn at $425 million. That's fixed at just under 8%. So there's about a $33 million per annum interest expense attached to that. And then the rest, you've got lease expense, which will be, call it, mid-single digits. And then you've got the floating rate exposure on the normal bank debt after that.

[Operator Instructions] The next question comes from the line of David Fabris from Macquarie.

And if we just flip to Slide 9. I was wondering if you could share some comments or maybe data points for the exit rates? Or even trends in the June quarter or the second half, just so we can sort of look at the trajectory of the business over the period.

Sorry, David, we lost you at the start of that question. Could you just go again, please?

Yes, Just referring to Slide 9 and looking at some of those metrics you put out there on a fiscal year basis. I was wondering if you could share some comments or data points if we think about maybe the fourth quarter or the second half, just so we can think about how the business is trending?

Sure. I don't think we've shared exit rates, but I think they're pretty consistent with what you're seeing there. Going into what we've seen so far. I mean the market's soft overall. But in terms of those metrics, I'll be comfortable to say they're pretty consistent with what we've seen at the start of the year.

Okay. Fair. And look, I know you made comments in your prepared remarks around the regulatory environment in respect to the banning of advertising sponsorships. I mean, you've got a pretty different position to your competitors. Do you think the regulators opening to move to your position? Is there anything happening with government currently? Or is it kind of just pause at this juncture?

Look, all I'd say is that we took that position very consciously because we believe in a sustainable Wagering market. And a safe ecosystem for Australians as part of that market. We don't think it's sustainable having overburden gambling advertising exposed to at -- times where families are exposed. So that's why we took the position. We stand by that position and we're here for the long term and for a sustainable market.

Yes. Got it. And just one last question for me. Great cost containment in FY '23. Can you just help me understand, was there movements between above the line and below the line there or something else? And is there a risk we see the same thing happen in FY '24?

David, it's Dan. I'll take that one. No, no movements between above the line and below the line. We were clear that we were starting a Genesis program and that we're bringing in some external help, and you can see in the significant items page there, we've called that out. And so the costs in that area are really redundancies and the cost of driving that program.

I was just curious, were they originally within the guidance and you move them to below the line there?

No.

The thing I was going to add just for interest with Dan leaving that we've got a Chief Transformation Officer and Rob Fraser, who owns the Genesis program. And to the second leg of the journey. So Genesis continues, and we're on target for our TAB25 cost target.

Our next question comes from the line of Rohan Sundram from MST Financial.

Just the one for me. Around the cash turnover. I noticed the second half is implying about a mid-teens year-on-year decline. I'm not sure if that's accurate? But if so, I appreciate it was a tough comp, but can you just talk us through how you're seeing the foot traffic into the retail and the consumer environment and whether that was a partial driver or if it was just largely the comp?

Rohan, it's Dan. I'll let Adam talk to foot traffic. But no, your implied run rate number is not right. It was basically flat year-on-year in the second half.

Venue foot traffic is strong. And our focus on -- from a venue perspective, cash is 1 measure. But digital customers and conversion and active customers is something we're also very focused on. But in pubs and clubs foot traffic is -- continues to be strong even currently.

Okay. Just on the second half, calc, it was -- I noticed first half cash turnover up about 60-odd percent by the full year, it was up about 25%. Are they correct? And if so, what that implies for the second half. But I'll have a look at my numbers, happy to revisit.

Yes. No, we'll take it offline, Rohan, but no, standby what I said before.

Our next question comes from Joseph Koh from Blackwater Investment Partners.

Just had a few questions on the MPS sale. You mentioned $4 million of D&A was avoided if you could put up a help for sale. Was there much OpEx related to that or that was avoided during the year from that?

Sorry, can you just repeat the question, please?

So you mentioned that I think $4 million of D&A was sort of avoided because MPS was put up as held for sale. Just wanted to know any offsets as well that was related to that, that was also not put into the above the line because it was to cut the sale?

No. When you move to held for sale, it doesn't affect that line. Only effects the D&A line.

Right. And can I ask what is the total OpEx for MPS then for the full year?

Yes, there's about $5 million of direct costs and $12 million to $15 million of allocated overhead.

Okay. So I'm just wondering, if MPS is now going to be sold at some point, should that not reduce FY '25 target OpEx from the original $600 million to $620 million, by $5 million to $20 million. If it's been another for excluded in FY '25?

It's not material because if you think about what I just said, this only what's leaving is $5 million of direct costs, the allocated costs don't go anywhere.

Right. Okay. So you should have been just only $5 million, but not material in the same basis.

Well, it keeps you within the range of $600 million to $620 million is my point.

Right. Okay. And then $12 million to $15 million of allocated costs that will just go into wagering or corporate [indiscernible] is that right?

And integrity services.

Thank you for the questions. I would now like to hand the call back to Adam for closing remarks.

Thank you. I'd just like to reiterate that we're in a 3-year transformation. We're really happy with year 1. We're now really focused on year 2, and we look forward to meeting with you over the next coming few days. Thanks, everyone.

That does conclude today's conference call. Thank you for your participating. You may now disconnect.