Big Challenges Ahead, Says NZ Racing Board

Tuesday, 16 November 2010 07:15

The New Zealand Racing Board has reported turnover and profit growth in the year to July, but has warned turnover in the first quarter of the new year is tracking 5.5 per cent below budget.

The board, which runs the TAB, reported strong turnover in the first half of 2009-10 but the second half was slower, proving the ongoing effects of the recessions, it said.

However, overall turnover and profit growth exceeded budget - turnover was up 4.5 per cent $NZ1.58 billion and profit 7.7 per cent to $NZ128.4 million.

"In the back half of the year we certainly noticed the ongoing impact on household spending, and therefore betting turnover, but a strong first half enabled us to achieve a solid full year result," board chief executive Andrew Brown said.

Since July, the flat economy, consumer restraint over the GST increase and an unusually wet spring causing a number of abandoned race meetings, had affected turnover to the extent it was 5.5 per cent below budget.

"... and while we believe New Zealand's growth economy will move back into growth over the medium-term, recovery will be slow and the 2010-11 season will be extremely challenging," Brown said.

The board was taking this seriously and adapting its operating and capital expense plans to mitigate the turnover pressure, he said.

The TAB experienced a bumper year in sports betting, with soccer's World Cup helping drive a 40 per cent increase in punting, exceeding profit targets by 70 per cent and gaining more than 34,000 new betting account customers.

But domestic racing tote turnover was down 5 per cent on the previous year. It was offset by betting on international racing and a 23 per cent growth in fixed odds turnover, leaving total racing turnover up by 0.9 per cent.