NZ Lotteries Ltd today posted a 15.9% drop in net profit to $159 million on the back of $782.3m sales revenue for the year to June 30, with executives blaming the luck of the draw.NZ Lotteries' chief executive Todd McLeay said that record sales in 2009 we
NZ Lotteries Ltd today posted a 15.9% drop in net profit to $159 million on the back of $782.3m sales revenue for the year to June 30, with executives blaming the luck of the draw.
NZ Lotteries' chief executive Todd McLeay said that record sales in 2009 were largely driven by two massive "Must be Won" jackpots.
Without that help, sales for 2010 were $12.3m (1.6%) ahead of budget but $125.4m (13.8%) down on the $907.7m in 2009. Mr McLeay said the revenue was $4.3m (0.6%) ahead of the "more comparable" 2008 sales, and the company's financial performance continued to be strong.
Net profit was down on 2009 by $30.3m, but $2.2m (1.4%) ahead of 2008.
"We are pleased with our performance, given the tougher retail climate and the lower jackpot runs in this financial year," said Mr McLeay.
The company is budgeting for sales of $825m for 2011 -- a lift of 5.46% on 2010 -- and aiming for a profit of $155m, down 2.52% on 2010, figures which Mr McLeay labelled a "challenging target".
Mr McLeay said the $159m had been transferred to the NZ Lottery Grants board for distribution to community, sports, arts and cultural groups -- ahead of its budget of $152.5m for a profit transfer.
Results for the current year had been good, boosted in recent weeks by a big Lotto powerball jackpot, which was expected to hit $27m on Saturday.
Powerball's previous biggest prize was $22.4m, won by a South Auckland family after a "lucky feeling" led them to buy their winning ticket from Manukau supermarket.
Mr McLeay said that for every dollar spent on Lotto, 56c was handed out as prizes, 20c was transferred to the NZ Lottery Grants Board, 10c was paid in taxes, another 7c went to the retailer as commission, and NZ Lotteries used 7c to pay its operating costs.
"We have seen a steady lift in base revenues and profit, with sales increasing by more than $60m over the past four years, and profits available for transfer to the NZ Lottery Grants Board growing by $26.4m," he said.
Lotto games were the best performer of all the company's brands, with sales of $521.1m, $20.9m, (4.2%) ahead of budget.
A temporary jump in Big Wednesday sales immediately after the $36m jackpot shared by Masterton families was not maintained throughout the year, and sales finished at $117.1m, $2.8m (2.3%) below budget.
A relaunch of Instant Kiwi in May lifted weekly sales too late to prop up the full year result of $103.6m, which was $9.5m (8.4%) under budget.
"The 'impulse purchase' nature of this product makes it more susceptible to the economic downturn," Mr McLeay said. Total Keno sales of $26.2m were $3.9m, (17.4%) above budget.
A total of $447m in prizes was won in the 2010 financial year, leaving $20.5m in the prize reserve fund -- compared to $32.6m the year before -- to boost prizes through jackpots and special promotional offers.
