TAB New Zealand, a prominent betting business, experienced a shortfall in turnover and revenue in May, as economic conditions weakened, offsetting the easing of lockdown measures. Despite aligning with positive trends observed throughout the 2021-22 financial year, the company reported figures below budget expectations.
Monthly Trading Update:
In May, TAB New Zealand’s turnover reached NZ$202.7 million, which was 3.6% below the budgeted amount. Similarly, gross betting revenue (GBR) was down by 4.4% compared to the budget, totaling $32.0 million. The gross betting margin (GBM) of 15.8% slightly missed the budgeted mark by 0.1%. The reported profit for the month amounted to $10.8 million, falling $2.4 million short of the budget. Operating expenses for May were $10.6 million, exceeding the budget by $0.4 million.
Key Performance Indicators:
Despite the challenges faced in May, TAB New Zealand maintained several positive indicators. The average number of thoroughbred starters per race stood at 10.7, slightly surpassing the year-to-date average of 10.6. Additionally, the Campbell’s Infrastructure Cup Day at Arawa Park generated a peak turnover of $1.9 million for a domestic meeting. In terms of sports betting, the top event by turnover in April was the Warriors vs Sharks NRL match, generating $0.58 million. Tennis accounted for 25% of in-play turnover, while rugby league dominated pre-match betting, representing 24% of the pre-match turnover.
Factors Influencing Performance:
TAB New Zealand acknowledged the impact of the Omicron COVID-19 variant on its operations, noting a slight easing compared to April. With New Zealand operating under the Covid-19 Protection Framework’s orange setting, there was a moderate uplift in foot traffic within the retail and hospitality sector throughout May, albeit not reaching the levels observed a year ago. However, softening economic conditions also played a role, as customers adjusted to the rising cost of living, affecting turnover and gross betting margin.
Year-to-Date Financial Performance:
For the period from August 1, 2021, to May 31, 2022, TAB New Zealand reported a profit of $135.2 million, falling $1.6 million below the budgeted amount and $12.0 million below the previous year’s figure. Operating expenses reached $97.0 million, slightly below the budget by $3.3 million but exceeding last year’s expenses by $2.3 million.
TAB New Zealand faced challenges in May as turnover and revenue fell below budgeted expectations due to softening economic conditions and adjustments made by customers amidst rising living costs. Despite these setbacks, the company’s overall performance throughout the 2021-22 financial year remained aligned with positive trends.
The impact of the Omicron variant on operations eased slightly compared to the previous month, leading to increased foot traffic in the retail and hospitality sector. TAB New Zealand continues to adapt to the evolving market landscape, aiming to enhance its financial performance and deliver exceptional betting experiences to its customers.