JJ Flash Posted July 7, 2020 Share Posted July 7, 2020 3 July 2020 The Racing Industry Transition Agency (RITA) approved the organisation's Half-Year Financial Statements 2020 at its most recent Board meeting. The net profit result of $75.5 million was $0.8 million below budget and distributions to the racing codes were $82.3 million. Like most businesses across the globe, RITA has experienced the disruption and uncertainty of COVID-19 during this Financial Year. In March this year, we indicated we would not meet our previously forecast net profit target of $165.8 million. This reflected the mass-postponement and cancellation of the majority of domestic and international sporting fixtures and racing events which underpin our product offering. However, the effects of Covid have been confined to the second half of the year. Management accounts for the first six months to January 31 showed an improvement against the same period last year, but were marginally down against Budget due to reduced turnover based on reductions in high value retail activity, an accounting error in the treatment of Bonus Bets and a delay in delay to implementation of new products. The subsequent impact of Covid during the current half of the year will be already apparent to most. In particular, the announcement of the Government’s $72.5 million support package for the racing industry outlined the serious underlying structural issues within the industry, and the TAB business. Detailed analysis on performance in the second half of the year will be made available in our Annual Report due after the conclusion of the racing season. Like a lot of businesses, the timing of COVID-19 impacted a number of our business as usual activities, including finalising the voluntary reporting of our half year accounts. Dean McKenzie Executive Chair Detailed HighlightsManagement Statements (Six Months to January 2020) Betting and Gaming Turnover Total Turnover (Betting & Gaming) of $1,500.0 million was $90.0 million (6.4%) above last year and $47.9 million (-3.1%) below budget. An increase in betting turnover vs last year (7.3%) was largely driven by Promotions which were solely offered on Fixed Odds. This resulted in churn to lower margin products. Gaming turnover continued to grow at +2.2% to $263.3 million ($0.5 million or 0.2% above budget) driven by successful TAB refurbishments and EGM conversions. Revenue Total Revenue of $187.1 million was $3.6 million (2.0%) above last year and $1.2 million (-8.0%) below budget. Performance against budget was largely driven by lower betting turnover from Elite and VIP customers combined with unfavourable results experienced in Racing and Sport fixed odds during the half year. Growth in Gaming revenue of $0.4 million (+1.8%) was partly offset by a decrease in New Zealand racing shown overseas (-$0.9 million or -7.4%) compared to the same period last year. Net betting margins were healthy at 11.9% but 0.4ppts below budget and last year due to product mix and unfavourable results. Other revenue increased by $0.4 million (+3.0%) on last year; key movements in this category included growth in merchant fee revenue of $0.5 million (+20.8%) and racing services income of $0.6 million (+8.0%) offset by a reduction in various other revenue items of $0.6 million (-22.2%). Expenses Turnover related expenses increased by $4.0 million (+11.3%) on last year, saving $0.5 million (1.3%) against budget. Performance includes higher National Sports Organisations payments of $2.1 million (+47.7%) as a result of higher Sports betting turnover and $1.9 million revenue share fees and performance margin due to higher gross betting revenue year on year. Operating expenses remained flat year on year (saving $0.6 million or 0.9% against budget) which include increases in technology costs due to managed services (up $1.4 million); interest costs due to comparatively higher balances of external borrowing (up $0.6 million); and merchant fees (up $0.8 million) resulting from increased credit card transactions by customers; these are offset by savings realised in staff costs of $3.0 million which reflects RITA's continued disciplined cost management. Distributions Total betting distributions to the racing Codes was $82.3 million, up $1.2 million (+1.5%) from last year which is consistent with Budget. Total gaming distributions of $9.2 million, up $0.5 million (+5.7%) on last year, includes $7.8 million funding to the racing industry and $1.4 million grants to Sporting Community Organisations. Quote Link to comment Share on other sites More sharing options...
Chief Stipe Posted July 7, 2020 Share Posted July 7, 2020 About bloody time. Only 87 days late! Now for the analysis. Hang on a mo - where's the detail? The devils always in the detail!!! Quote Link to comment Share on other sites More sharing options...
curious Posted July 7, 2020 Share Posted July 7, 2020 I see Noodlum is editing your posts again Chief Stipe. Quote Link to comment Share on other sites More sharing options...
Joe Bloggs Posted July 7, 2020 Share Posted July 7, 2020 I'm moving all my horses back to NZ.......it's going to be a utopia......... 1 1 Quote Link to comment Share on other sites More sharing options...
Joe Bloggs Posted July 7, 2020 Share Posted July 7, 2020 Is Peter Foster the auditor by chance.....if you don't know who Peter Foster is, try google. Quote Link to comment Share on other sites More sharing options...
Chief Stipe Posted July 8, 2020 Share Posted July 8, 2020 JJ Flash - yep as the more enlightened amongst us suspected RITA were in the shit, knew it and did nothing about it. I think Mackenzie's use of the word "Highlights" is an embellishment! Quote Link to comment Share on other sites More sharing options...
nomates Posted July 8, 2020 Share Posted July 8, 2020 So if this is supposed to suggest that all is well down on the farm why the delay , and , leaving industry participants in the dark , leading to supposition and suspicion as to why this delay . Are people playing games or just the usual lack of respect to those participants that have a right to know the financial position of the industry . There is still a smelly rat in the room . I don't believe the above report is a clear indication of the industry position , it's certainly not the panacea we require . There is a lot of change required to put it back on a stable position . 1 Quote Link to comment Share on other sites More sharing options...
Chief Stipe Posted July 8, 2020 Share Posted July 8, 2020 2 minutes ago, nomates said: I don't believe the above report is a clear indication of the industry position , it's certainly not the panacea we require . There is a lot of change required to put it back on a stable position . What it does show is what we all suspected that there was a high level of doing NOTHING! They were lucky Covid-19 intervened! For example NO action was taken on staff expenses in fact they were OVER budget! 1 Quote Link to comment Share on other sites More sharing options...
Chief Stipe Posted July 8, 2020 Share Posted July 8, 2020 3 hours ago, JJ Flash said: Total betting distributions to the racing Codes was $82.3 million, up $1.2 million (+1.5%) from last year which is consistent with Budget. How is that a highlight or even a goal when you sold the silver and then borrowed money to achieve it!!!? FFS! Does any company in the real world borrow money and declare it as profit!? 1 1 Quote Link to comment Share on other sites More sharing options...
Chief Stipe Posted July 8, 2020 Share Posted July 8, 2020 Net betting revenue comparison for the same six month period: 2018 $153m 2019 $143m 2020 $147m Ok up $4m from 2019 but still down $5m on 2018. So much for the new betting platform. Quote Link to comment Share on other sites More sharing options...
Chief Stipe Posted July 8, 2020 Share Posted July 8, 2020 Total Operating Expenses UP $4.5m on the same period in 2019. Quote Link to comment Share on other sites More sharing options...
curious Posted July 8, 2020 Share Posted July 8, 2020 7 minutes ago, Chief Stipe said: Total Operating Expenses UP $4.5m on the same period in 2019. And that's all come in the second quarter. They were down 1.1m as of end October. Quote Link to comment Share on other sites More sharing options...
Chief Stipe Posted July 8, 2020 Share Posted July 8, 2020 There is no balance sheet information so one can only extrapolate..... To fund the distributions they needed to borrow another $15m. Taking their Equity position to $9m. Technically not-solvent however if you consider the future distribution commitment (stakes) as a liability then yes they were insolvent and now it is worse. 1 Quote Link to comment Share on other sites More sharing options...
JJ Flash Posted July 8, 2020 Author Share Posted July 8, 2020 30 minutes ago, nomates said: There is a lot of change required to put it back on a stable position . No kidding Einstein, shall we get John and Glenda back to sort it ? Quote Link to comment Share on other sites More sharing options...
Chief Stipe Posted July 8, 2020 Share Posted July 8, 2020 1 minute ago, curious said: And that's all come in the second quarter. They were down 1.1m as of end October. So the NEW management were still purchasing brooms in order to sweep clean? Quote Link to comment Share on other sites More sharing options...
Chief Stipe Posted July 8, 2020 Share Posted July 8, 2020 2 minutes ago, JJ Flash said: No kidding Einstein, shall we get John and Glenda back to sort it ? So what say you about the new RITA team? Concrete evidence to show they did NOTHING but make the situation worse. Quote Link to comment Share on other sites More sharing options...
Chief Stipe Posted July 8, 2020 Share Posted July 8, 2020 39 minutes ago, nomates said: There is a lot of change required to put it back on a stable position . Simple really. Either slash costs and/or slash stakes. Revenue is dead in the water - hasn't been going anywhere for some time. The new betting system hasn't produced anything more. To break even without slashing costs you would have to reduce Stakes by $30m. That assumes of course that they can negotiate the roll over of what is now north of $40m in due debt. By the way the benefit money from Winnie wouldn't have reduced that debt. 1 1 Quote Link to comment Share on other sites More sharing options...
Chief Stipe Posted July 8, 2020 Share Posted July 8, 2020 A serious discussion needs to be had with the Racing Codes regarding Stakes. A come to Jesus meeting and reality check. Before you even think of it - the All Weather Tracks are NOT going to improve things i.e. generate MORE net revenue. They ADD more cost NOT reduce it. The Surplus Assets grab isn't going to help either. Not only will it take time to go through that process but who in their right mind would sell good earning assets to fund consumption e.g. Stakes? Ideally you would convert the surplus assets into investments that increase revenue but that will take time. Operationally there is NO ROOM to move in terms of extra revenue. It is obvious from this half-yearly report that fees from overseas bookies are not the white rabbit honey pot!! 2 2 Quote Link to comment Share on other sites More sharing options...
curious Posted July 8, 2020 Share Posted July 8, 2020 (edited) 31 minutes ago, Chief Stipe said: It is obvious from this half-yearly report that fees from overseas bookies are not the white rabbit honey pot!! No. Despite that and the duty relief, net loss after distributions which are static has gone from -15m to -16m for the half year and this was pre-Covid. Edited July 8, 2020 by curious 1 Quote Link to comment Share on other sites More sharing options...
curious Posted July 8, 2020 Share Posted July 8, 2020 59 minutes ago, Chief Stipe said: Simple really. Either slash costs and/or slash stakes. Revenue is dead in the water - hasn't been going anywhere for some time. The new betting system hasn't produced anything more. To break even without slashing costs you would have to reduce Stakes by $30m. That assumes of course that they can negotiate the roll over of what is now north of $40m in due debt. By the way the benefit money from Winnie wouldn't have reduced that debt. Might be about right with the reduction in distributions to $140m? Quote Link to comment Share on other sites More sharing options...
Chief Stipe Posted July 8, 2020 Share Posted July 8, 2020 15 minutes ago, curious said: Might be about right with the reduction in distributions to $140m? I think so. It was an off the top of the head calculation - you know on the back of Winnies cigarette packet. However $140m doesn't reduce the debt issue. LOL venues will be surplus because there won't be sufficient revenue to hold the number of races relative to the number of horses.....unless of course you reduce the individual stakes which has some merit - especially redistribution from the top end. Quote Link to comment Share on other sites More sharing options...
Chief Stipe Posted July 8, 2020 Share Posted July 8, 2020 I berate myself for appearing negative, doom and gloom - the reason why Reefton stopped posting. I was told early in my career when working for an Organisation that was following the same game plan as NZRB/RITA has that - "Doug the problem with this company is it believes its own propaganda." In my naivety (honesty) I presented a well researched analysis of the business and a plan to improve its position. I didn't know at the time the company was already to go to the stock exchange to raise capital to keep going. The prospectus they used I had just proven to be wrong. All my work was deleted and I lost my job. That company was called Applefields. 3 Quote Link to comment Share on other sites More sharing options...
nomates Posted July 8, 2020 Share Posted July 8, 2020 1 hour ago, JJ Flash said: No kidding Einstein, shall we get John and Glenda back to sort it ? As usual JJ good at dishing out a barb , perhaps you could get hold of them on your direct line , cause i'm sure you could . How about you respond to some of the other things in my post . Or better still put up a few initiatives of your own . Plus you were the one that put the thread up and called out the Chief , how about you respond there , or you still recovering from the last mauling , flea . The infomercial lives on . 4 1 Quote Link to comment Share on other sites More sharing options...
nomates Posted July 8, 2020 Share Posted July 8, 2020 1 hour ago, JJ Flash said: No kidding Einstein, shall we get John and Glenda back to sort it ? Also i'm assuming you posted the report as way of letting everybody know that we are in a stable position , but agreeing that's there still a lot to be done . Which is it . 1 Quote Link to comment Share on other sites More sharing options...
nomates Posted July 8, 2020 Share Posted July 8, 2020 1 hour ago, Chief Stipe said: So what say you about the new RITA team? Concrete evidence to show they did NOTHING but make the situation worse. Still waiting for the results of the review into the upper management , not going to hold my breath there . Quote Link to comment Share on other sites More sharing options...
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