New Zealand racing board reflect on strong year at AGM
A year of continued transformation has seen the New Zealand Racing Board (NZRB) recap a year of unprecedented growth for the TAB, attracting a total of 78,580 new customers, improved betting margins and strong cost control.
NZRB Chair, Glenda Hughes said it was strong result in spite of the lack of forecasted revenue from anticipated Racefields legislation, the impact of the Australian Gambling Act and racing abandonments.
“In many regards it has been a challenging year for the Board, which makes it particularly pleasing to report an increase in net profit and distributions to the Codes driven by growth in customer numbers and disciplined cost management.
“There has also been significant progress in our strategic initiatives which will set us up well over the next decade or so. Our customer focus is driving real value for our industry and better outcomes for our punters, racing product is looking great through our vision capture initiative and progress was made toward our fixed odd betting platform and our Anti-money-laundering requirements.”
After successfully repositioning the brand, broadening its wider mainstream appeal and completing a series of successful marketing acquisition campaigns, the TAB has seen a strong increase in the number of active monthly account customers, averaging 114,500, compared with 98,000 for the same period last year. The business has seen a significant increase in its underlying active account customer base, now at 230,000, up 38,000 customers or 20% on last year.
Reflecting on the 2017/18 Financial year at the NZRB’s Annual General Meeting at Petone, CEO John Allen said this record growth was a key result of the NZRB’s Customer and Channels programme, designed to deliver $17 million of additional profit back to the racing industry by 2021.
“When we started this programme in 2016 we had approximately 90,000 active customers and now average around 113,000 active customers per month. That is a phenomenal rate of growth for a wagering business and demonstrates real opportunity” says NZRB CEO John Allen.
“Improvements to our digital channels have been extensive as we’ve worked to dramatically enhance the experience for customers. The TAB mobile app has had a complete redesign and has seen the total betcount reach 11.7 million, up 56% or 4.2 million bets on last year. The total number of unique users is 47,000, up 37%,” says Allen.
“This significant growth in customer numbers, margin improvement and disciplined cost management underpinned another strong year for NZRB. We’ve continued to support New Zealand racing and sport with an operating profit result of $154.9 million, up $6.9 million (4.7%) on last year. Including investment in our strategic initiatives, reported net profit was $145.9 million, $1.9 million (1.3%) ahead of last year.
“As we reported last month, distributions to the racing codes reached a record $148.2 million, an increase of $10.6 million on last year while a further $1 million was allocated from NZRB’s industry enhancement funds. Record commission payments of $10.2 million were made to 34 national sporting organisations, up $1.0 million (10.4%) on last year while our gaming activities delivered $12.8 million in funding applied to racing and $3.4 million in grants to grassroots sport, up 6.8% on last year.
“We believe these results prove there is a huge opportunity to grow the profitability of the New Zealand TAB and we will continue to lift our core business over the coming year, while progressing the key strategic initiatives which will lift annualised net profit to the vicinity of $200 million once fully delivered,” says Allen.
Glenda Hughes acknowledged Racing Minister, Rt Hon Winston Peters for commissioning a review of New Zealand racing which was led by Australian racing administrator John Messara.
“We welcome the Minister’s initiative in setting up the review and we support the majority of recommendations, including refocusing the NZRB as Wagering New Zealand. However, the TAB is a significant and valuable industry asset and we owe it to our customers and the industry to ensure far reaching decisions, such as outsourcing the TAB, are thoroughly analysed and carefully considered before any decisions are made.
“The industry is in urgent need of investment and the resulting revenue from Racefields, repeal of the betting levy, new synthetic tracks and a refocused venue footprint, in addition to the benefit of NZRB’s strategic initiatives will be a game changer for racing.”