The New Zealand Racing Board (NZRB) today announced an underlying operating profit for the first half of 2017/18 of $83.4 million, up $2.8 million or 3.4% on last year (excluding the net impact of strategic initiatives costs and benefits of $4.4 million). Including the planned investment and associated benefits from the strategic initiatives, reported net profit was $79.0 million, $1.1 million (1.4%) below last year however this was $2.9 million above Budget.
NZRB Chief Executive John Allen says this good interim financial performance is the result of a strong uplift in digital turnover and customer acquisition combined with ongoing disciplined cost management.
“Successful customer acquisition campaigns, growth in digital channels and increased betting from high staking Elite customers has seen a growth in total revenue to $188.1 million, up 3.2% on last year and a corresponding growth in total turnover to $1.430 billion, up 3.9% on 2016/17,” says Mr Allen.
"Our rolling average monthly active account bettors grew to more than 106,000 per month over the 12 months to January 2018, up 16.4% on the previous 12 month period, and in January 2018 alone there were 112,250 active customers betting, up 19.5% on last year. The Spring customer acquisition campaign run across the second quarter delivered a massive 23,737 new customers, up 28% on target. These newly acquired customers continue to bet regularly with the TAB supported by our CRM initiatives that has contributed to the growth in Betting Turnover and Revenue.
Underlying operating expenses were $68.4 million, up 1.4% on last year largely driven by ongoing investment in technology platforms and PCI regulatory compliance while staff expenses, broadcasting and property costs have all been reduced.
During the first half of 2017/18, the NZRB increased its distributions to the racing industry by 11.5% or $9.1 million on last year to $88.2 million while funding for national sporting organisations also increased by $1.0 million or 22.3% up to $5.5 million and another $1.3 million in grants were paid to amateur sport from gaming.
Mr Allen says the NZRB is on track to deliver its challenging full year underlying operating profit target of $153.9 million in the 2017/18 year and remains committed to lifting distributions to the industry.
“We remain committed to lifting distributions to racing while facing a number of challenges. The industry continues to be plagued by an unusually high number of abandonments - 19 over the past six months (many of which occurred throughout January at Thoroughbred meetings), equating to $1.5 million in lost profit. The cost of these abandonments is also significant to trainers, jockeys and drivers incomes and returns to owners not to mention the flow on effect to other races,” says Mr Allen.
In February, NZRB along with the three racing codes launched a process to address the issues our industry faces around infrastructure - leading the development of a future venue plan to help generate maximum benefits for racing’s stakeholders by delivering strategic investment in fit-for-purpose infrastructure and increased financial returns.
|NZRB Interim Results||HY18||HY17||$ Change|
|Total Turnover (Betting and Gaming)||$1.430b||$1.376b||+3.9%|
|Underlying Operating Profit||$83.4m||$80.7m||+3.4%|
|Reported Net Profit||$79.0m||$80.1m||-1.4%|
|Distributions to Racing||$88.2m||$79.1m||+11.5%|
|Funding for National Sporting ORganisations||$5.5m||$4.5m||+22.3|
The above table is based on NZRB’s management accounts for the six months to 31 January.