TAB New Zealand Update on Trading Performance - August 2020

29 September 2020

Monthly Trading Performance Update

TAB New Zealand (TAB NZ) today provides a trading update for August, the first month of the 2020/21 financial year. Moving forward, TAB NZ will provide regular updates on wagering performance and key operational highlights.

Wagering Performance Summary
Despite the ongoing impact of COVID-19 on its business and the wider industry, TAB NZ’s key results for the month were ahead of budget and last year.

Starter and field size numbers were particularly good for both equine codes contributing to positive year-on-year domestic racing turnover growth. Encouragingly, total racing turnover continues to be strong, with year-on-year growth (+10.1%) with no significant growth in the volume of racing being broadcast. Analysis of customer behaviour shows that many bet on domestic racing only prior to lockdown have maintained their overseas racing activity while their domestic racing activity has returned back to prior levels.

Sports turnover was strong (+36%), benefiting from the condensed nature of the sports calendar at the moment, with a number of sports seasons overlapping where they traditionally would not, eg. NBA taking place in August. This is helping to drive customer engagement levels. 

Customer numbers responded positively with 94,000 customers for the month, with days active comparable to the peak November period (Melbourne Cup and NZ Cup Week and major World Cups in the past). 

Retail operations and customers have also been shown to be resilient, notwithstanding the recent Greater Auckland Level 3 lockdown. Retail turnover in Auckland returned, almost immediately, to pre-lockdown levels. The Board  recognises the significance of a Level 3 or 4 lockdown on our gaming business is considerable given the absence of being able to provide a  comparable online offering. This presents risk to the funding of racing integrity, racing enhancement and community sport which Class 4 Gaming currently enables. Extra vigilance of gaming performance is therefore required to manage the ongoing risk of COVID-19.

The Board is encouraged by the trading performance for the month however it remains cautious at this early stage of the season on the ability to meet full year projections. This is given the ongoing uncertainty presented by COVID-19 and the potential for further disruption to domestic and international product supply.

August Operational Performance Highlights 

  • Net Profit for the month was $12.8m, which was $1.7m above Budget and $1.4m above Last Year. This is made up of; Betting Profit $11.9m (+$2.2m v Budget), Gaming Profit of $1.4m (-$0.5m vs Budget) and Racing Integrity RIU (RIU) of -$0.5m (in-line vs Budget). The result was primarily driven by a strong trading month from turnover due to increased product supply with margin and continued cost management being in-line with Budget.
  • Total Gaming Revenue is $0.6m below Budget and $0.7m (-26.3%) below Last Year due to Auckland sites being closed for 19 days during Covid-19 lockdown. All other stores overall were in line with Budget.
  • Operating Expenses are $0.2m below Budget and $2.6m (+21.1%) below Last Year. 

August Distributions

  • Actual distributions of $11.5m for August were paid to the Racing Codes vs $10.7m budgeted.  This consists of TAB NZ Betting Profit, Betting Duty relief and offshore bookmaker commission fees (Betting Information User Charge (BIUC) in the table below), based on actual turnover.

August Wagering Performance Highlights

  • Account bettor customers were slightly up  (+1,200) on July’s numbers, with both racing and sport bettor numbers increasing: Racing customers were up 4% in July and sport customers were in line with July.
  • Turnover of $208.2m is $21.8m above Budget and $27.1m (+14.9%) above Last Year impacted by strong performance in International Racing and Sport.
  • Domestic racing accounted for $54m in turnover, with overseas racing product made up $82.2m of the month’s total turnover and sport delivering $71.7m in turnover.
  • Gross Betting Revenue of $32.1m is $3.1m above Budget and $1.6m above last year due to higher turnover. 

August Events

Top 10 Racing Events by turnover

22-Aug

Randwick

R7

Winx Stakes (G1)

$434K

15-Aug

Riccarton

R8

Winning Edge Presentations 123rd Winter Cup (G3)

$425K

15-Aug

Riccarton

R10

Racecourse Hotel & Motor Lodge Handicap

$388K

8-Aug

Te Rapa

R10

See You @ Valachi Downs Foxbridge Plate Day 1400

$324K

1-Aug

Matamata

R7

Well Done Jamie Richards & Team 100 Winners

$323K

22-Aug

Matamata

R11

Happy 60th Russell Wright Handicap 2000

$287K

1-Aug

Ashburton

R9

Brand & Gunn Want The Return of Trackside Radio

$285K

22-Aug

Matamata

R9

Cunningham Decorating Services Handicap 1200

$281K

1-Aug

Matamata

R5

Price Racing 1400

$268K

1-Aug

Ashburton

R10

Barnswood Farm Stakes Day 18th October

$259K

Top 10 sport events by turnover

9-Aug

Super Rugby

Crusaders v Highlanders

$645K

1-Aug

Super Rugby

Chiefs v Crusaders

$608K

7-Aug

NRL

Manly Sea Eagles v NZ Warriors

$599K

14-Aug

NRL

NZ Warriors v Penrith Panthers

$575K

20-Aug

NRL

Parramatta Eels v Melbourne Storm

$552K

30-Aug

NRL

Canberra Raiders v Canterbury Bulldogs

$542K

27-Aug

NRL

Parramatta Eels v South Sydney Rabbitohs

$519K

8-Aug

Super Rugby

Hurricanes v Chiefs

$519K

13-Aug

NRL

Sydney Roosters v Melbourne Storm

$518K

29-Aug

NRL

NZ Warriors v Newcastle Knights

$518K