Lotteries Commission Reports Better Earnings Trend

NEW ZEALAND LOTTERIES COMMISSION

MEDIA RELEASE 14 August 2002

For Immediate Release

Lotteries Commission Reports Better Earnings Trend

The New Zealand Lotteries Commission today reported a better earnings trend, with the fall in underlying profitability year on year reducing from around 10 per cent for the previous 12-month period to just two per cent for 2001-02.*

CEO Ariane Burgess said the earnings result of $113.063 million was a pleasing performance, given the very competitive nature of the discretionary income market and the ever-increasing number of poker machines.

It was equally pleasing that the result was within one per cent of the annual budgeted figure, also a significant improvement on previous years.

“Final earnings have been slightly impacted by the Powerball cycle, with the win just before year-end tipping us slightly below budget. But the underlying result is basically on target,” Mrs Burgess said.

Three factors have contributed to this year’s performance:

- the beneficial impact of Powerball and Strike on the Lotto suite revenue stream;
- tight cost control; and
- an improved cost of sale ratio brought about by the withdrawal of the unprofitable gameshow Risk and the move away from uneconomic Superdraws.

The earnings result was generated from reduced sales of $560.8 million. -

“Support for Lotto continues to reduce, but to a significant extent this has been compensated for by strength in both Powerball and Strike revenues,” Mrs Burgess said.

“Overall, performance of the Lotto suite (Lotto, Powerball and Strike) has been fairly flat, which gives us a reasonable base for the launch of our exciting ‘New Lotto’ product in a couple of months’ time.

“This result means NZLC was able to achieve its agreed payment of $119 million to the Lottery Grants Board for the 2001-02 year, with the balance, as agreed at the beginning of the year, coming from reserves,” Mrs Burgess said.

NZLC has agreed with the Lottery Grants Board to deliver the sum of $105 million for 2002-03, reflecting the continuing challenges and restrictions of the New Zealand lotteries market.

“However, with the launch of ‘New Lotto’ in the second quarter of the year, we are very hopeful that we will better this figure,” Mrs Burgess said.

* Note that all comparisons are based on 52-week years. For the 2000-01 financial year there were 53 Saturdays and therefore 53 Lotto draw weeks.

ENDS

© Scoop Media