TAB New Zealand Performance Update - July 2021

26 August 2021

TAB New Zealand (TAB NZ) provides the latest monthly trading update for the 2020/2021 financial year, with the results and highlights for July 2021. Consistent with previous months, July saw continued strong performance by TAB NZ.

Please note the figures referenced below are provisional only. They are based on management accounts, and are subject to the normal financial year end audit clearance by PwC.

Although the TAB continues to operate successfully through its online channels during Alert Level 4, the current lockdown will have revenue-related impacts due to domestic racing being shut down, as well as the TAB’s retail and gaming networks. These impacts will be quantified in our monthly performance update for August, which you can expect to receive in a month’s time.

 The TAB is in a much more robust position financially than during last year’s nationwide lockdown, however, this is an evolving situation and we will continue to focus on the business at hand while keeping our stakeholders up to date.

Summary

Reported Profit for the month was $15.1m, which was $3.1m above Budget. This is made up of; Betting Reported Profit $13.4m (+$2.5m vs Budget), Gaming Reported Profit of $1.7m (+$0.0m vs Budget) and RIU Reported Profit of -$0.0m (+$0.6m vs Budget).

July saw the transfer of the Racing Integrity Unit (RIU) to the new Racing Integrity Board (RIB) entity and this will no longer be consolidated within the TAB NZ Profit & Loss. As part of the transfer there were some accounting adjustments driven by transferring the RIU to RIB, which included recognising a loss in the transfer of RIU assets to RIB for nil consideration, offset by the transfer of the RIU annual leave liability to the RIB. 

Excluding one off/exceptional items, TAB’s Normalised Profit for the month was $15.1m, which was $3.1m above Budget. Normalised Operating Expenses were $10.0m for the month. 

For the year to date, Normalised Profit is $174.2m, which is $42.5m above Budget. Reported Profit is $178.3m, which is $46.6m above Budget. 

Wagering Performance Summary 

In July, the key performance results for TAB were strong, with turnover, gross betting revenue and net betting revenue all above Budget for the month. Turnover of $215.5m was $15.9m above Budget and $18.1m above last year. The strong performance against Budget was driven by sport (+$22.6m vs Budget), assisted by the number of quality sporting events being broadcast globally. 

Total Gross Betting Revenue was $35.6m, $4.1m above Budget and at a margin of 16.5 percent.

Racing

Average NZ thoroughbred starters per race was 10.2, below the FY21 average of 11.3, while the peak turnover for a domestic meeting was $1.96m on 3 July at Ruakaka.

Harness average starters per race was 9.8, below the FY21 average of 10.8, while the peak meeting turnover of $1.2m on 23 July at Addington.

For greyhound racing, the average starters per race was 7.6, matching the FY21 average, while the peak turnover for a domestic meeting was $456k on 1 July at Addington.

The total margin for all New Zealand racing was 18.3 percent, in line with the FY21 New Zealand racing margin of 18.2 percent.  Overseas racing margin was 19.5 percent, slightly above the FY21 average of 19.2 percent.

Sport

A variety of sports events took place this month. The highest sports event by turnover was the Euro 2020 final between Italy and England ($0.97m) while the All Blacks tests against Fiji and Tonga, and the third State of Origin match made up the top 5.

The margin on options selected by customers across sports continued to vary with the in-play sports delivering a gross betting margin of 7.1 percent with football taking over as the major driver of in-play performance, accounting for 26 percent of in-play turnover at 5.9 percent. The pre-match singles margin was at 16.1 percent, with football and rugby league accounting for 44 percent of pre-match turnover and both running margins just over 20 percent.  Sports Multi margin was 26.6 percent.

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July Operational Performance 

  • Net Profit (normalised) for the month was $15.1m, which was $3.1m above Budget.
  • Operating Expenses (normalised) were $10.0m for the month, which was $0.2m below Budget. 
  • Full Year (1 Aug 2020 to 31 July 2021) Reported Profit (normalised) was $174.2m, which was $42.5m above Budget. 

Full Year (1 Aug 2020 to 31 July 2021) Operating Costs (normalised) were $118.7m, which was $1.5m below Budget. 

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July Distributions

Racing Codes were paid $14.4m in distributions and other payments for July versus $12.1m budgeted. This consisted of TAB NZ Betting Profit (listed as Fixed Distribution in the table below), Offshore Bookmaker Commission Fees, which are based on actual turnover (termed Betting Information Use Charges (BIUC) in the table below), and Betting Duty/Levy repeal.

Top 10 Racing events by turnover

Date

Venue

Race No.

Race description

Turnover

24-Jul

New Plymouth

R5

Powerworx Opunake Cup

$386K

17-Jul

Ruakaka

R8

Hirepool

$334K

3-Jul

Ruakaka

R8

Northbeam Timber Beams and Posts

$326K

10-Jul

Te Rapa

R8

Valachi Downs Foxbridge Plate 28/8 1400

$312K

31-Jul

Arawa Park

R5

Taumarunui RSA Gold Cup 2200

$287K

10-Jul

Awapuni

R8

Bayleys Feilding 1400

$286K

24-Jul

New Plymouth

R7

Sinclair Electrical & Refrigeration

$286K

3-Jul

Hastings

R10

Thank You HBRI Stewards 1400

$282K

17-Jul

Ruakaka

R5

ITM/GIB Whangarei Gold Cup

$279K

3-Jul

Ruakaka

R7

Mountfield Quarry

$278K

 

Top 10 Sporting events by turnover

Date

Code

Event

Turnover

12-Jul

Football

Italy v England

$972K

10-Jul

Rugby Union

New Zealand v Fiji

$802K

3-Jul

Rugby Union

New Zealand v Tonga

$640K

14-Jul

Rugby League

New South Wales v Queensland

$621K

17-Jul

Rugby Union

New Zealand v Fiji

$611K

21-Jul

Basketball

Milwaukee Bucks v Phoenix Suns

$581K

8-Jul

Football

England v Denmark

$556K

18-Jul

Basketball

Phoenix Suns v Milwaukee Bucks

$533K

9-Jul

Basketball

Phoenix Suns v Milwaukee Bucks

$512K

11-Jul

Rugby League

Cronulla Sharks v New Zealand Warriors

$509K