Continued Strong Performance From NZ Lotteries

Media Release 14 September 2011

Continued Strong Performance From NZ Lotteries Leads To Record Result And $3 Billion Transferred To Lottery Grants

The strong performance of NZ Lotteries in recent years has continued in 2010/11 with a new record sales result of $925.9 million, and profit of $183.3 million, announced today by Chief Executive Todd McLeay.

“While two large jackpots during the year helped boost sales to new heights, the positive customer response to major game changes to Instant Kiwi and, especially, Lotto and Powerball, made a very valuable contribution to this year’s results.

“Sales for the year of $925.9 million were $143.6 million (18.4%) ahead of last year, which did not have the benefit of extraordinary jackpot runs.

“Profit of $183.3 million was transferred to the NZ Lottery Grants Board for distribution to more than 3,000 organisations and projects around New Zealand.

“These results are particularly pleasing as they also demonstrate the success of our strategy for growth in recent years, especially as the New Zealand retail environment remains very challenging,” says Mr McLeay.

“We are focussing on ensuring our products appeal to as many New Zealanders as possible through product innovation and effective marketing, and on making the purchase experience easy and accessible in our retail network and online. This has provided a solid base for our business that provides strong weekly sales outside of jackpot runs,” he says.

“In 2010/11, the two big jackpot runs helped lead to exceptional financial results. We are optimistic about the results for the current year, but it is unlikely we will do quite as well as we have done in this past financial year.

“What counts in the end is the trend in revenues and earnings over the longer term. In that regard, we are very pleased that sales, profits, and distributions to the Lottery Grants Board over the last five years are up by a third or more, compared with the five years prior to that,” says Mr McLeay.

The profit transfer for the year included $8.2 million which was raised for the Christchurch Earthquake Appeal through a special Lotto draw held on 5 March 2011. A further $6 million was allocated to the earthquake appeal in July from profits distributed to the NZ Lottery Grants Board. In addition, NZ Lotteries contributed $9 million from retained earnings to help fund the REAL NZ Festival.

“These results mean a major milestone has been reached this year – more than $3 billion has now been transferred by NZ Lotteries to the NZ Lottery Grants Board since Lotto began in 1987,” Mr McLeay says.

NZ Lotteries’ 2011 Annual Report can be downloaded from www.mylotto.co.nz

Background information

Of every dollar spent on Lotto: 56 cents is spent on prizes 20 cents is transferred to the NZ Lottery Grants Board 11 cents is paid in taxes (includes GST, gaming duty) 7 cents is retailer commission 6 cents is NZ Lotteries operating costs

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