NZ Racing Board To Distribute Additional $6m To Codes
- Wednesday, 20 January 2010 23:00
The New Zealand Racing Board will make a special funding distribution of $6 million to the thoroughbred, harness racing and greyhound codes in March 2010.
Racing Board Chairman Michael Stiassny said on Wednesday he was pleased the Board was able to make the unscheduled pay-out which would benefit the grassroots industry.
“This unscheduled distribution is only possible due to the strong fiscal restraint being achieved by the Racing Board. The distribution is in addition to our budgeted distributions to the Codes which we will continue to make during the remainder of the financial year as scheduled.
“We are currently ahead of budget for the first five months of 2009/10, as a result of having worked to strip out more than $10 million in operating costs, at the same time driving revenues with initiatives such as TAB TV. We are continuing to identify and implement additional operational efficiencies.
“Last year we also paid out more to the racing industry than we earned which depleted our reserves by $22.2 million. However, we recognise that racing clubs are in need of additional support as the country emerges from the economic recession. And, given we are ahead of budget, it makes sense to pay out some of the surplus now rather than wait until the end of the financial year. It’s great to be in a position to help,” he said.
Mr Stiassny said the Board was tracking well ahead of budget for the first five months of 2009/10, with a total net profit of $58.2 million, up nine per cent on the same period in 2008/09.
Total turnover was up three per cent to $678.9 million for the same period, while operating expenses were down 7.3 per cent to $30.4 million.
The New Zealand Racing Board recorded a $119 million profit* for the year to 31 July 2009, despite the effects of the global financial crisis and increasing offshore competition from internet gambling operators.
Coming off a record high in 2007/08, the Racing Board’s total turnover of $1.513 billion was down only 0.9 per cent (or $14.25 million) on the previous year. Operating expenses of $144.73 million were up just 2.95 per cent (or $4.16 million). Importantly, distributions to the industry were up 7.2 per cent, with the three codes receiving $141.2 million.
The result reflects strong financial management through a difficult time, Racing Board Chairman Michael Stiassny said.
“We dipped into our reserves to pay out $22 million more to the racing industry than we earned during the financial year.
“This was a prudent decision taken to help racing weather the economic recession, which meant that our cash reserves were reduced to $41.0 million+ at the end of the financial year,” Mr Stiassny said.
Mr Stiassny said the Racing Board’s full year result was particularly robust given the pressure on discretionary household spending in 2008, the 2.5 per cent fall in GDP and the increasingly competitive environment that the Racing Board is facing.
“We’ve achieved enviable results in the past five years. We have managed a 34 per cent growth in total turnover and a 111 per cent increase in distributions since 2003, but it has not been easy. The threat posed by offshore operators is with us and increasing.
“On current estimates, around $50 million is being returned to overseas operators which otherwise would be available to support the New Zealand racing industry. Additionally these operators are able to offer betting opportunities relating to activities taking place within New Zealand on which legislation prevents us offering betting and therefore competing. Legislatively, we no longer operate on a level playing field.”
Mr Stiassny said the Racing Board was confident about the current financial year as the country emerges from the recession.
“We continue to focus on operational efficiencies while making important investments to improve our product and infrastructure. Investments - including the launch of TAB TV and the installation of the new Typhoon betting system - will help ensure the future health of the racing industry. However, we are under no illusion that we have our work cut out for us trying to head off the massive competition posed by the internet,” Mr Stiassny said.
* Net audited profit before industry expenditure and distributions
+ Excluding betting accounts and betting vouchers trust monies
Picture: Greg Irvine
