Statement of Performance Expectations - G.44 - Parliament NZ
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G.44
Statement of
Performance Expectations
for the financial year ending 30 June 2017
2 Lotto New Zealand
Headline 1
Headline 2
Xxxxx
This Statement of Performance Expectations sets out the financial forecast of the New Zealand
Lotteries Commission (Lotto New Zealand) for the financial year from 1 July 2016 to 30 June 2017,
and has been prepared in accordance with the Crown Entities Act 2004.
This Statement of Performance Expectations is written on behalf of the Board.
Judy Kirk Tony Mossman
Chair Deputy Chair
27 April 2016 27 April 2016
Table of contents Lotto New Zealand’s strategic direction 5 Performance expectations 8 Prospective financial information 10 Forecast financial statements 11 Directory 19 Crown copyright ©. This work is licensed under the Creative Commons Attribution 3.0 New Zealand licence. In essence, you are free to copy, distribute and adapt the work, as long as you attribute the work to Lotto New Zealand and abide by the licence terms. To view a copy of this licence, visit creativecommons.org. Please note that no logos may be used in any way that infringes on Lotto New Zealand’s copyright. Attribution to Lotto New Zealand should be in written form and not by reproduction of any such logo.
4 Lotto New Zealand
Statement of Performance Expectations 2017 5
Lotto New Zealand’s
strategic direction
Our purpose Powerball jackpots are the largest driver of sales
for Lotto NZ and it is therefore imperative that we
To provide safe gaming that allows New Zealanders
continue to offer a strong Lotto Powerball game that
to play and win while contributing money back to
creates excitement and captures the imagination of
New Zealand communities.
New Zealanders. Given the intangible nature of our
Goals products, loved brands that make New Zealanders
feel good about playing our games and the
In all of our activities, we aim to:
contribution they’re making to the community will
• Maximise profits for transfer to the Lottery Grants continue to be important. In addition to this, we need to
Board for the benefit of New Zealand communities ensure that we have a footprint that reflects changing
• Minimise the harm from problem and underage shopper behaviour and that it remains convenient and
gambling associated with our products. easy to purchase our games, wherever and whenever
our customers choose to play.
Outputs
Lotto New Zealand has one class of outputs – our Growing digital
games. By successfully and responsibly promoting Given the increasing proliferation of digital
and running our games we will achieve our goals. consumption, Lotto NZ needs to keep pace with the
rate of change in the digital space.
Strategic overview
Through evolving MyLotto we will ensure that we are
Lotto NZ exists to generate essential funding to
meeting the increasing demands of our customers
help build strong Kiwi communities. Our goal is to
over the coming years. A new modern MyLotto
maximise profits for transfer to the Lottery Grants
platform, offering new games and engaging
Board for the benefit of New Zealand communities.
content, will facilitate a seamless experience across
The strategies outlined for the coming period focus on
all devices. A focus on mobile reflects the growing
growing sales in order to deliver this goal. However, it
importance of smartphones, as they are increasingly
is fundamental to our success as a business that we
the favoured device for many consumers.
grow in a socially responsible way.
Increasing diversification
Our long-term strategic priorities remain in line with
Over time we need to lessen our dependency
those set out in our 2016 - 2019 Statement of Intent.
on jackpot-fuelled growth and deliver a greater
However, we have refined certain areas of the plan
proportion of our sales from new customers.
to reflect the changing operating environment and
the performance of the business in the 2015/16 year. This will be achieved by reaching more New
This is reflected in greater separation of the strategic Zealanders through extending the appeal of our
shifts we would like to affect (strategic focus), from games and brands to connect with an increasingly
the activities we will undertake in order to meet our diverse market, together with developing our non-
strategic goals (programmes of work). Powerball game portfolio to provide the business
with a greater level of stable sales during times when
Strategic focus we do not have high jackpots.
The strategic focus for the business reflects the shifts
Front-footing disruption
we would like to affect over the coming period.
In the short term, offering a compelling portfolio of
These four areas, where we will focus our resources,
games of chance, available through a convenient
are based on both the external influences impacting
retail network and engaging digital channel, will
the business and the performance of Lotto NZ.
deliver strong performance for the business.
Driving demand
Looking out further we must ensure that we are
We need to ensure that we continue to drive demand
tuned in to social and technology trends and that
for our games in order to deliver positive results in the
we have a comprehensive understanding of how
short term.
consumers’ needs are evolving, in order to remain
relevant to New Zealanders in the future.6 Lotto New Zealand
Programmes of work and Strike being drawn on both Wednesday
and Saturday. The simplification of our offer in
In the 2016/17 year, we will be focusing on the
the large jackpot games space makes product
following activities as we work towards meeting our
enhancements easier in the future and we will be
long-term strategic goals.
exploring opportunities to continue to improve the
Technology enablement proposition of our core game. We will look to drive
The current MyLotto platform was launched in 2008, improvements across all elements of Instant Kiwi,
around the time that the first iPhone was launched as well as investigating the possibility of introducing
in New Zealand. As a result, mobile was still in its online instant games, which have proved popular
infancy and MyLotto subsequently evolved as two for overseas lotteries. The changes we make to
completely separate websites, namely a desktop our portfolio of games, together with relevant
site and a mobile site. In line with the growth of the communications that talk to New Zealanders today,
wider digital environment, MyLotto continues to will ensure that we continue to offer great games that
represent an increasingly important channel for Lotto inspire more people to play our games more often.
NZ. Over 575,000 visits are made to the MyLotto site
Brand engagement
every week, providing a great opportunity for us to
further engage with these players and potentially Given the intangible nature of our products, a strong
convert them to playing online in the future. Over brand is imperative to the success of our business.
the coming year we will continue to invest in A more prominent Lotto NZ brand helps New
developing a new digital platform, including MyLotto Zealanders feel good about playing our games
desktop, mobile and App, to protect the integrity of and giving back to communities – and is therefore
the channel, reduce cost of development and allow vital to driving sales and maximising profit for the
us to further strengthen our digital offering. Given the Lottery Grants Board. The Powerball brand is all
growth of mobile devices, with mobile increasingly about making an emotional connection with New
the first screen many consumers turn to, there will be Zealanders, giving our players the chance to dream
a focus on mobile for both design and functionality. big about the possibility of a win. To further increase
Through updated technology, we aim to provide visibility and drive awareness of Lotto NZ, we will
useful utilities and services to enhance customer leverage our reach through New Zealand’s largest
experiences both online and in-store retail network with updated retail branding. We
intend to generate greater awareness of the purpose
Retail experience of Lotto NZ by continuing to remind New Zealanders
The coming year will see us continue to focus on why we exist and the benefits that funding from Lotto
targeted growth within supermarkets and fuel NZ games provides to New Zealand communities.
stations. We know that less regular players are
unlikely to go out of their way to purchase a Lotto Organisational shifts
ticket. Therefore being where people are already Advances in technology and the growth of the
shopping and making the purchase as convenient digital landscape have significantly changed the
as possible will encourage less frequent players to skills and capabilities many organisations require. In
purchase more often. Specifically, the ability to sell the 2016/17 year we will look to increase our level of
Lotto tickets through an integrated point-of-sale digital capability across the organisation, through a
solution at both supermarket checkouts and fuel combination of training and up-skilling programmes,
stations allows for a single transaction, increasing along with enhancing our internal ways of working.
the efficiency of the purchase process. We will also Our ability to understand consumer trends and
investigate opportunities to sell our games through player behaviour is vital to our ability to engage
new sectors, where Lotto has not traditionally had a with a more diverse set of consumers, and therefore
presence, in areas of the country where we see per putting the customer at the heart of our decision-
capita sales underperforming. making will continue to be central to the way that
we operate the business.
Game performance
Our plan for the coming year will see us focus on Solid business foundations in financial management,
improving the existing games within our portfolio. responsible gaming, risk and security management,
Following the introduction of Lotto twice a week in health and safety, and the operational availability
the 2015/16 year we now have a more compelling and performance of our systems will support these
midweek offer for our players, with Lotto, Powerball programmes of work.Statement of Performance Expectations 2017 7
Lotto New Zealand Volatility in profit has been further accentuated in
recent years by a managed reduction in the size
performance drivers of the prize reserve fund. This fund represents cash
There is a very strong correlation between the size reserves the business carries to self-insure against the
of the Powerball jackpot on offer and the number of risk of jackpots being struck more frequently than
people playing our games. As the jackpot grows, so would be statistically likely. From 2012/13 through to
do the number of people playing, specifically we see and including 2014/15, the level of cash reserves has
more infrequent players come into the category who been reduced with the effect of further increasing
only play at the higher levels. As a result, the length of profit over that period.
jackpot runs, and corresponding first division prizes on
Estimated profits in the 2015/16 year are likely to be
offer, has a direct impact on our performance in any
below the budget of $200.2 million. This is on the
given year. This brings with it a degree of volatility
back of another year where the Powerball jackpot
that needs to be accounted for when forecasting.
was won more often than what we would expect in
We have experienced both the upside and a statistically typical year.
downside of this volatility over the past few years,
A forecast of $191.1 million profit for 2016/17 is based
which has materially impacted the profit generated
on a statistically normal year for Powerball jackpots
in any given year. High jackpots in 2013/14 resulted in
and a stable prize reserve fund and takes into
net profit of $226.2 million (which was bolstered
account game enhancements during the year.
by an additional $5 million from the sale of Lotto
NZ’s Auckland building in that year), while lower
levels of jackpots the following year saw profits of
$198.6 million.8 Lotto New Zealand
Performance expectations
Statement of performance expectations for the year ending 30 June 2017
We have just one output class to report on – our games. The information in these tables reflects the
measures Lotto NZ considers relevant to external stakeholders, in order to evaluate performance in the
2016/17 financial year.
Profit maximisation
Actual Target Estimate Target
KPIs
2014/15 2015/16 2015/16 2016/17
Sales ($m) 893.7 (1) 997.4 (2) 922.0 (2)(3) 947.3
Operating expenses ($m) 62.8 66.0 62.5 65.4
% operating expenses (4)
7.0 6.6 6.8 6.9
Net profit ($m) 198.6 200.2 180.5 191.1
Paid to the Lottery Grants Board ($m) 198.6 200.2 180.5 191.1
Lotto/Powerball/Strike Sales ($m) 545.4 749.1 681.8 754.9
Gross margin ($m) 136.7 204.1 177.4 207.6
Instant Kiwi Sales ($m) 147.0 154.5 141.2 145.5
Gross margin ($m) 22.1 22.3 19.7 20.3
Other games Sales ($m) 49.3 51.5 46.2 46.9
Gross margin ($m) 12.4 12.1 11.2 11.0
Harm minimisation
Actual Target Estimate Target
KPIs
2014/15 2015/16 2015/16 2016/17
Primary mode of gambling citations per 10,000 players (5) 1.1Statement of Performance Expectations 2017 9
Technology enablement
Actual Target Estimate Target
KPIs
2014/15 2015/16 2015/16 2016/17
Digital sales ($m) 75.5 88.9 84.7 90.9
Number registered MyLotto players 380,000 - 437,000 495,000
MyLotto usage – average weekly visits (6) 489,000 - 577,000 627,000
Game performance
Actual Target Estimate Target
KPIs
2014/15 2015/16 2015/16 2016/17
Average weekly sales ($m) 17.2 19.2 17.7 18.2
Average weekly transaction count (m) 1.23 - 1.25 1.30
Retail experience
Actual Target Estimate Target
KPIs
2014/15 2015/16 2015/16 2016/17
Retail sales ($m) 818.2 908.5 837.3 856.4
Number retail outlets 1345 - 1375 1485
Supermarket penetration (7) 80% - 82% 84%
Operational performance
Actual Target Estimate Target
KPIs
2014/15 2015/16 2015/16 2016/17
Retail network unplanned downtime 0 hours10 Lotto New Zealand
Prospective financial
information
The prospective financial statements reflect Lotto The Board is responsible for the prospective financial
New Zealand’s budget for the year ending 30 June statements presented, including the appropriateness of
2017, forecast financial position at 30 June 2016, and the assumptions underlying the prospective financial
forecast results of operations and cash flows for the statements and all other disclosures.
year ending 30 June 2016. They have been prepared
The forecasts, in respect of the year ending 30 June
in accordance with section 142(1)(a) of the Crown
2016, incorporate the actual financial results for the nine
Entities Act 2004 and were authorised for issue by Lotto
months to 31 March 2016.
New Zealand’s Board on 27 April 2016. The purpose
of the prospective financial statements is to facilitate Actual results are likely to vary from the forecasts, and
Parliament’s consideration of the planned performance variations may be material.
of Lotto New Zealand. Use of this information for other
It is not intended that the forecasts will be updated
purposes may not be appropriate.
subsequent to the issue of this Statement of
The budget and forecast have been prepared on Performance Expectations.
the basis of assumptions as to future events that Lotto
New Zealand’s Board reasonably expects to occur.Statement of Performance Expectations 2017 11
Forecast financial
statements
Prospective statement of comprehensive income
For the period ended 30 June 2017
2017 2016 2015
Budget Projection Actual
$000 $000 $000
Revenues (note 3) 901,029 877,979 848,538
Cost of sales (note 4) 644,548 634,986 587,167
Gross profit 256,482 242,993 261,371
Expenses
Promotion and retail support (note 5) 26,567 23,262 24,542
Property, plant and equipment depreciation 4,869 4,907 5,054
Computer software amortisation 1,897 2,047 1,597
Gaming system 7,041 6,587 6,215
Employee benefits 13,987 13,699 12,462
Other 11,039 12,003 12,898
Total expenses 65,400 62,505 62,768
Profit 191,082 180,488 198,603
Distributions to the New Zealand Lottery Grants Board 191,082 180,488 198,603
Profit/(loss) after distributions to the New Zealand Lottery Grants Board - - -
Other comprehensive income - net change in fair value of cash flow hedges - - 849
Total comprehensive income/(expense) - - 849
The accompanying notes form part of this statement and should be read in conjunction with it.
Statement of movements in equity
For the period ended 30 June 2017
2017 2016 2015
Budget Projection Actual
$000 $000 $000
Total comprehensive income after distribution to the Lottery Grants Board - - 849
Equity of beginning of the period 23,113 23,113 22,264
Total comprehensive income for the period as above - - 849
Equity at the end of the period 23,113 23,113 23,113
The accompanying notes form part of this statement and should be read in conjunction with it.12 Lotto New Zealand
Prospective statement of financial position
As at 30 June 2017
2017 2016 2015
Budget Projection Actual
$000 $000 $000
Assets
Current assets
Cash and cash equivalents 29,994 27,845 30,180
Term deposits 19,700 20,700 20,551
Debtors and other receivables 5,200 4,200 8,161
Prepayments 4,100 4,400 3,360
Inventories 3,500 3,500 3,204
Total current assets 62,494 60,645 65,456
Non-current assets
Property, plants and equipment 17,663 18,510 20,034
Computer software 8,417 7,674 5,847
Long-term financial derivatives - - -
Total non-current assets 26,080 26,184 25,881
Total assets 88,574 86,828 91,337
Liabilities
Current liabilities
Creditors and other payables 44,169 41,990 49,851
Annuity prize liabilities - - 50
Employee entitlements 700 700 648
Provisions - - 486
Lease incentive 235 235 235
Total current liabilities 45,104 42,925 51,270
Long term liabilities
Lease Incentive 1,236 1,471 1,706
Total long term liabilities 1,236 1,471 1,706
Prize reserve account 19,121 19,319 15,248
Total liabilities 65,461 63,715 68,224
Equity
Retained earnings 23,113 23,113 23,113
Total equity 23,113 23,113 23,113
Total liabilities and equity 88,574 86,828 91,337
The accompanying notes form part of this statement and should be read in conjunction with it.Statement of Performance Expectations 2017 13
Statement of cash flows
For the period ended 30 June 2017
2017 2016
Budget Projection
$000 $000
Cash flows from operating activities
Ticket sales 892,079 869,049
Other receipts 7,451 6,152
Prize payments (524,169) (518,209)
Lottery duty (52,100) (50,711)
Retailers' commission (61,310) (59,882)
Employee costs (13,987) (13,699)
Other payments (51,616) (48,037)
Net cash flow from operating activities 196,347 184,663
Cash flows from investing activities
Sale of property, plant and equipment 45 135
Interest received 2,500 2,602
(increase)/decrease in term deposits 1,000 300
Purchase of property, plant and equipment (4,021) (2,867)
Purchase of computer software (2,640) (4,391)
Net cash flow from investing activities (3,116) (4,221)
Cash flows from financing activities
Discharge of annuity prize liabilities - (50)
Payments to the New Zealand Lottery Grants Board (191,082) (182,728)
Net cash flow from financing activities (191,082) (182,778)
Net (decrease)/increase in cash balances 2,149 (2,335)
Opening cash and cash equivalents balance 27,845 30,180
Closing cash and cash equivalents balance 29,994 27,845
The accompanying notes form part of this statement and should be read in conjunction with it.14 Lotto New Zealand
Notes to the forecast
financial statements
1. Accounting policies Computer software
Computer software that is not integral to the
REPORTING ENTITY
operation of hardware is recorded at purchase
The New Zealand Lotteries Commission (Lotto New cost less any amortisation and impairment losses.
Zealand) is a Crown entity as defined by the Crown Amortisation is charged to the profit or loss on a
Entities Act 2004 and is domiciled in New Zealand. straight line basis over the software’s useful life of
Lotto New Zealand’s ultimate parent is the New three to seven years.
Zealand Crown.
The useful life of computer software is reviewed at
Lotto New Zealand has determined that it is a least annually to determine if there is any indication
profit-oriented entity for the purpose of complying of impairment. Where any software’s recoverable
with the New Zealand equivalent to International amount is less than its carrying amount, it is reported
Financial Reporting Standards and applies Tier 1 at its recoverable amount and an impairment loss
For-profit Accounting standards. will be recognised in profit or loss.
BASIS OF PREPARATION Contingent assets and contingent liabilities
Contingent liabilities are disclosed if the possibility
Accounting compliance
that they will crystallise is not remote. Contingent
These forecast financial statements comprise
assets are disclosed if it is probable that the benefits
prospective financial information and have been
will be realised.
prepared in compliance with New Zealand Financial
Reporting Standard No. 42 – Prospective Financial Employee entitlements
Statements (FRS-42). Employee entitlements to salaries and wages,
annual leave, long service leave and other similar
Basis of measurement
benefits are recognised in the profit or loss when
The measurement base applied is historical cost
they accrue to employees.
modified by the revaluation of certain assets and
liabilities as identified in this statement of accounting Obligations for contributions to the defined
policies. The accrual basis of accounting has been contribution retirement plan are recognised in
used unless otherwise stated. surplus or deficit as they fall due.
These financial statements are presented in New Termination benefits are recognised in surplus
Zealand dollars rounded to the nearest thousand. or deficit only when there is a demonstrable
commitment to either terminate employment prior
ACCOUNTING POLICIES to normal retirement date or to provide such benefits
The accounting policies set out below have been as a result of an offer to encourage voluntary
applied consistently to all periods presented in these redundancy.
financial statements. Financial instruments
Changes in accounting policies Cash and cash equivalents, and term deposits
There have been no changes in accounting policies Cash and cash equivalents include cash on hand,
since the date of the audited financial statements for bank accounts and deposits with maturities of up to
the year ended 30 June 2015. three months from acquisition date.
Comparatives Term deposits represent deposits and other
The 30 June 2015 figures are those published in the instruments with maturities of more than three
Annual Report 2014/15. months from acquisition date.
When presentation or classification of items in the It is Lotto New Zealand’s policy to restrict its
financial statements is amended or accounting policies investments to instruments issued or guaranteed by
are changed voluntarily, comparative figures are either the New Zealand Government or registered
restated to ensure consistency with the current period. New Zealand banks. Although investments
are normally held to maturity, they are readilyStatement of Performance Expectations 2017 15
marketable and therefore may be regarded as liquid assumptions may differ from the subsequent actual
assets. The value of investments held fluctuates as results. Estimates and judgements are continually
changes in market interest rates occur. However, the evaluated and are based on experience and
extent of such fluctuations in value is relatively minor. other factors, including expectations of future
events that are believed to be reasonable under
Cash equivalents and term deposits are recorded at
the circumstances. There are no estimates and
cost, adjusted in the case of government stock by the
assumptions that have a significant risk of causing
amortisation of any premium or discount included in
a material adjustment to the carrying amounts of
the purchase price.
assets and liabilities within the next financial year.
Annuity prize liabilities Critical judgements in applying
These represent prizes payable from Instant Kiwi accounting policies
games where the payments are spread over a Lotto NZ has assessed the prize reserve fund as
period of greater than 12 months from the date a liability as itemised in the prize reserve account
the prizes are claimed. These liabilities are initially policy below. No other critical judgement has been
measured at fair value using the effective interest made when applying accounting policies.
rate method. Any changes in value are recorded
through the prize reserve account. Leases
Operating leases, where the lessor substantially
Foreign currency transactions
retains the risks and rewards of ownership, are
Foreign currency transactions are translated into recognised in a systematic manner over the term of
New Zealand dollars using the exchange rates the lease. Leasehold improvements are capitalised
prevailing at the dates of the transactions. and the cost is amortised over the unexpired
Goods and Services Tax (GST) period of the lease or the estimated useful life of the
All items in the financial statements are exclusive improvements, whichever is shorter. Lease incentives
of GST, with the exception of amounts due from received are recognised evenly over the term of the
retailers for current games, trade receivables, lease as a reduction in rental expense.
moneys received for games not drawn at balance Prize reserve account
date, and trade creditors. This account is established in accordance with the
Inventories requirements of the Rules governing the conduct and
Inventories held for sale are recorded at the lower operation of Lotto New Zealand’s games. Transfers
of cost (calculated using the first in, first out (FIFO) into this account comprise amounts set aside from
method) and net realisable value. the prize pools for games, together with prizes
unclaimed after 12 months from the date of the
The write-down of inventories to net realisable value relevant draw or game closure and interest earned
is recognised as an expense in the period the write- on investments representing prize liabilities. Funds
down occurs. accumulated in this account are used exclusively
Interest for the purposes of augmenting the prize pools
for various draws and games. The balance in the
Interest income is recognised using the effective
account fluctuates as a result of a number of factors,
interest rate method.
the most significant of which is the frequency of Lotto
Interest on cash equivalents and term deposits Powerball and Big Wednesday division one wins.
relating to unpaid prizes and the prize reserve Long jackpot runs typically result in an increase in
account is credited direct to the prize reserve the balance. Conversely, wins early in the jackpot
account. Interest on other cash equivalents and term cycle cause a decrease in the balance in the
deposits is credited in profit or loss. account.
Estimates and assumptions Property, plant and equipment
In preparing these financial statements, Lotto New Items of property, plant and equipment are initially
Zealand has made estimates and assumptions recorded at cost.
concerning the future. These estimates and16 Lotto New Zealand
Additions Revenue and expense recognition
The cost of an item of property, plant and Revenues and corresponding direct expenses for
equipment is recognised as an asset only when it is Lotto (including Lotto Strike and Powerball), Keno,
probable that future economic benefits or service Bullseye, Play3 and Big Wednesday are recognised
potential associated with the item will flow to Lotto when each lottery is drawn. Instant Kiwi revenue and
New Zealand and the cost of the item can be corresponding direct expenses are recognised when
measured reliably. retailers activate ticket stock prior to sale to players,
making those tickets part of a game.
Disposals
Gains and losses on disposals are determined by Taxation
comparing the proceeds with the carrying amount Lotto New Zealand is exempt from income tax by
of the asset. Gains and losses on disposals are virtue of Section 264 of the Gambling Act 2003.
included in the profit or loss.
The following taxes are paid by Lotto New Zealand:
Subsequent costs
• Lottery duty of 5.5 cents in the dollar on GST-
Costs incurred subsequent to initial acquisition are
inclusive sales
capitalised only when it is probable that future
economic benefits or service potential associated • Problem gambling levy on GST-inclusive sales less
with the item will flow to Lotto New Zealand and prizes payable
the cost of the time can be measured reliably. The • GST charged on lottery sales less related prizes
costs of day-to-day servicing of property, plant and payable
equipment are recognised in the profit or loss as • Fringe benefit tax
they are incurred.
• Non-resident withholding tax.
Depreciation
Depreciation of property, plant and equipment,
other than freehold land, which is not depreciated,
is calculated on a straight-line basis so as to allocate 2. Principal assumptions
the cost of the assets, or the revalued amount, over
The principal assumptions made in arriving at the
the shorter of the economic life or the relevant lease
forecasts for the remainder of 2015/16 and for 2016/17
periods as follows:
are as follows:
Gaming computers, associated 4-7 years • There will be no major outages affecting our
equipment and integral software lottery systems
Other computer hardware 3 years • There will be no changes in lottery duty or
taxation which will continue to be levied on Lotto
Leasehold improvements 1-9 years New Zealand on the same basis as at March 2016
Draw equipment 5 years • There will be no statistically abnormal series of
jackpot runs for Powerball. Major variations in
Furniture and fittings 10 years jackpotting behaviour may have a significant
Motor vehicles 4 years effect on actual financial results
• There will be no major global lotteries initiative
Office equipment 5 years
over the internet during 2016/17.
Building 10-50 years
The residual value and useful life of an asset is
reviewed, and adjusted if applicable, at each
financial year end. If an adjustment to the useful life
of an asset is made then the remaining book value
at that point is depreciated on a straight line basis
over the adjusted remaining life of the asset.Statement of Performance Expectations 2017 17
3. Revenues
2017 2016 2015
Budget Projection Actual
$000 $000 $000
Sales including GST 947,265 922,020 893,673
GST 55,186 52,971 54,556
Sales excluding GST 892,079 869,049 839,117
Other revenue 8,951 8,930 9,421
Total Revenues 901,029 877,979 848,538
4. Cost of sales
2017 2016 2015
Budget Projection Actual
$000 $000 $000
Lottery duty 52,100 50,711 49,152
Problem gambling levy 1,269 1,218 1,154
Retailers' and interactive commission 61,310 59,882 58,239
Prizes paid and payable 472,802 467,718 437,335
Prize reserve account 51,367 50,491 35,961
Ticket costs 4,948 4,236 4,165
Cost of goods sold to retailers 751 730 1,161
Total cost of sales 644,548 634,986 587,167
5. Promotion and retail support
2017 2016 2015
Budget Projection Actual
$000 $000 $000
Media advertising 11,154 11,018 11,161
Media production and draw 6,446 5,220 7,908
Point of sale, game stationery and distribution 4,377 4,155 3,469
Retail revitalisation 2,916 456 2
Promotion and retail support other 1,674 2,413 2,001
Total promotion and retail support 26,567 23,262 24,542
Included within the retailer revitalisation costs for 2016/2017 is a $2.75 million allocation for the ‘Lotto NZ’ rebranding of our retail network.18 Lotto New Zealand
Statement of Performance Expectations 2017 19
Directory
Auckland office Board members
Level 1, 73 Remuera Road Judy Kirk, ONZM
Remuera, Auckland 1050 Chair
PO Box 8929, Symonds Street Tony Mossman
Auckland 1150 Deputy Chair
Telephone 09 356 3800 Miranda Burdon
Facsimile 09 366 1605 Mark Gilbert
Keiran Horne
Logan Sears
Wellington office
Level 1
The Woolstore Design Centre Executive team
258 Thorndon Quay
PO Box 9448 Wayne Pickup
Wellington 6011 Chief Executive
Dan Balasoglou
Chief Financial Officer
Ben Coney
Christchurch office
Chief Innovation and Technology Officer
66-68 Mandeville Street
Guy Cousins
PO Box 8609
Chief Marketing Officer
Riccarton
Christchurch 8011 Kathryn Haworth
General Manager, Strategy
Chris Lyman
Chief Operating Officer
Contact
Emilia Mazur
Website mylotto.co.nz
General Manager,
Email info@lottonz.co.nz
Corporate Communications
Telephone 0800 695 6886
and Social Responsibility
Amie McKinlay
General Manager,
People, Culture and Brandmylotto.co.nz
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