John Allen's Message to Industry, March 2017
It’s been a busy few weeks for me, travelling around the country taking part in my Industry Conversations. The most recent of which took place at Ellerslie in Auckland where I recorded another message to you all - you can view it here.
Our current Half Year results show continued improved performance in lifting net profit for distributions. After exceeding Net Profit in the 2015/16 year, distributable profit for the first half of 2016/17 is up again - 6.8% year-on-year. This strong financial result is largely driven by improved margins and good cost management. A more detailed snapshot of our half year can be found here - please note these are not the final numbers and are still subject to audit but give a good indication of our overall position.
I’ve been out talking with people from all walks of racing, and the message is clear - funding levels must be significantly lifted if the industry is to prosper. You’ve also told me you’re tired of hearing about plans. You want to see action. There is no more time for endless relitigation of what to do - we need to take action now.
What I can tell you is that NZRB is responding. Our top priorities right now are to work with the Government deliver the Racefields legislation before this year’s September election, to design and implement the FOB solution, and to drive our Customer and Channels strategic work. We are confident we will deliver an additional $45 million to the industry in 2018/19, rising to an additional $60 million in 2019/20. Our Board is also expected to consider whether they can ‘bring forward’ the distribution of some of the benefits of these initiatives at their meeting later this month.
We understand that there are still some reservations due to historic poor performance. However, this team has already proven its ability to deliver over the past two years - we’ve met or bettered our numbers, we’ve modestly increased distributions year-on-year, we have strengthened our balance sheet, and we’ve begun to deliver our strategic projects, beginning with the Optimus programme which recently successfully implemented one of the biggest technology changes for NZRB in 30 years.
We are confident that the actions we are now taking, balance the need for immediate funding increases to the industry with necessary investment to achieve longer term sustainable profit growth. Expect to hear more from me on this after our March board meeting.