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Based on what exactly? 

They have to be talking the piss to think they will generate an extra near $40m from racing and sports betting net revenues. Only 15% more than last year. Mind you, to sustain the distribution, that is what they need to achieve. If they don't, the remaining reserves of $24m (where this has come from, who knows), will be out the door.

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5 hours ago, mardigras said:

Based on what exactly? 

They have to be talking the piss to think they will generate an extra near $40m from racing and sports betting net revenues. Only 15% more than last year. Mind you, to sustain the distribution, that is what they need to achieve. If they don't, the remaining reserves of $24m (where this has come from, who knows), will be out the door.

Exactly. They are predicting this NBR and the operating savings in doing so to sustain the $25m reserves. There seems to be no explanation as to where this will come from. It would seem more likely that last year's 28m decline in NBR will continue. I think I heard Dean McKenzie say at the AGM they are already collecting 80% of the expected Racefields fees via voluntary agreements, so there's not much to come from there. If you believe the Treasury and DIA estimates and apply a bit of logic, the PoCC is likely to be negative revenue wise. Where the hell is the 40m supposed to emerge from? They could be completely insolvent by the time of the next annual report as far as I can see.

Here's the SOI link for those interested. https://www.rita.org.nz/sites/default/files/documents/SOI_2019_Report_RITA_FINAL%401101.pdf

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I liked this quote from Robbie Waterhouse in a recent "The Optimist" (ironic I know) blog in general reference to the dire state of things in NSW.

" “I bought a racebook at auction the other day from the 1930s, and there was virtually no horse on the card that was owned by more than one person. Today, except for a few owners like the Sheikh, every horse is owned by 20 people. I think they would be better off slashing the prizemoney and bring the price of yearlings down.”

Ten years ago I thought they had a chance to turn things around here with significant structural change. Without drastic change such as the above now, I don't really see any hope and the likes of NSW will lead or follow suit.

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1 hour ago, curious said:

Exactly. They are predicting this NBR and the operating savings in doing so to sustain the $25m reserves. There seems to be no explanation as to where this will come from. It would seem more likely that last year's 28m decline in NBR will continue. I think I heard Dean McKenzie say at the AGM they are already collecting 80% of the expected Racefields fees via voluntary agreements, so there's not much to come from there. If you believe the Treasury and DIA estimates and apply a bit of logic, the PoCC is likely to be negative revenue wise. Where the hell is the 40m supposed to emerge from? They could be completely insolvent by the time of the next annual report as far as I can see.

Here's the SOI link for those interested. https://www.rita.org.nz/sites/default/files/documents/SOI_2019_Report_RITA_FINAL%401101.pdf

 

It is underpinned by a combination of revenue growth including full year benefits from the new Fixed Odds Betting platform, recovery in elite betting activity, growth in gaming and other key revenue initiatives, and a reduction in operating expenses

That's a big ask, to increase  nett betting revenue by 37 mil

Recovery in elite betting ??

Op expenses down, 1.8 mil, Gaming income up 0.5 mil, not huge

What other key revenue initiatives?

I note also that Turnover related Expenses are up from 69 to 81 mil, what's that all about

Staff expenses down 10%, at least that is positive

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1 hour ago, Hesi said:

 

It is underpinned by a combination of revenue growth including full year benefits from the new Fixed Odds Betting platform, recovery in elite betting activity, growth in gaming and other key revenue initiatives, and a reduction in operating expenses

That's a big ask, to increase  nett betting revenue by 37 mil

Recovery in elite betting ??

Op expenses down, 1.8 mil, Gaming income up 0.5 mil, not huge

What other key revenue initiatives?

I note also that Turnover related Expenses are up from 69 to 81 mil, what's that all about

Staff expenses down 10%, at least that is positive

Remembering of course that the NBR referred to is unrelated to PoC or racefields income. And is unrelated to operating expenses or gaming income. So that requires punters betting with the TAB to be prepared to lose an additional $37m on sports and racing betting. I think it's a number plucked out of their arse.

Some of the increase in turnover related expenses may well be due to a hoped for increase in racefields fees payable off-shore (from some of the extra supposed revenue from punters betting on racing).

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4 minutes ago, mardigras said:

Some of the increase in turnover related expenses may well be due to a hoped for increase in racefields fees payable off-shore (from some of the extra supposed revenue from punters betting on racing).

Maybe, or maybe they've been relocated from the general opex reductions?

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Probably BYO sammies and drinks and a gold coin to help keep the power meter going round as well.

At least JA seems to have timed his departure well. They should be able to pay him till the end of the year and scrape up enough for his golden handshake.

A question though. It appears the remaining $25m of equity includes $45m of intangible assets. Anyone point me to a listing or some detailed description of what makes those up? I don't see much in the annual report but may have missed it. Thanks.

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Because they are down in class, with blinkers on and a 4kg claimer steering on a heavy track, I've tightened them in to 100/1 to achieve the budget in the head post. They'll need to get their hands on the penetrometer readings though but should start performing well after Christmas.

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  • 2 weeks later...

The intangibles are up from $8m FY18 to $45m this year. Its the website amd software yes. Page 19 of the annual report.

Nothing unusual about the accounting - a 50 mil project isnt going to be expensed in year 1.

It does however hugely weaken the balance sheet. For one thing it cant be sold. They didnt even engineer it themselves. Intangible assets is an area ripe for abuse even so a lot of the time items in there such as brands can have a realisable value.

I think will we see effective nationisation of the betting operation with govt issuing bailouts to save face avoiding job losses etc while racing continues to operate at a loss. This is for all purposes the same as the industry issuing bonds against the eventual, inevitable, taking of the golden goose of monopoly to market.

My personal view is borrow big and invest in world class night racing to hit asia in the morning their time. Theres no more money to be squeezed from NZ. We are the wealthiest we have ever been and still only punt 20 bucks on a rugby game. Give it up. Needs a strong hand at the tiller to do any such thing we are world class in no single associated process yet (broadcasting, track management, form, integrity, stewards etc etc).

 

 

 

 

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