Lotto NZ forecasts 8.4% drop in sales
Lotto NZ expects an 8.4 drop in sales for the year 2020/2021, with a reduction in tickets sold through retail outlets.
New Zealand.- The New Zealand Lottery Commission (Lotto NZ) expects Covid-19 to continue to affect sales for the next 12 months.
It forecasts a year-on-year drop in sales of 8.4 per cent for the year ending June 30 2021.
In a statement Lotto NZ said: “At this point it is too early to accurately predict what the impact of Covid-19 will be on New Zealand, and therefore on Lotto NZ’s performance. However, given the unprecedented nature of what we are witnessing we have taken a conservative approach to setting targets for the 2020/21 year, and have set our sales and profits targets slightly lower than the modelled long-run median.”
Although it saw significant growth in players using the digital channel MyLotto during phases three and four of lockdown, the firm believes sales through retail outlets will remain lower than usual due to social distancing measures.
It said: “Fewer people shopping in retail is likely to have a detrimental impact on the sales of physical Instant Kiwi tickets, which are typically an add-on purchase, and therefore driven by in-store foot traffic.”
Retail sales for the year ending June 30 2020 totalled NZ$935 million (US$625.4 million). Lotto NZ forecasts sales of NZ$810.4 million (US$542.1 million) for July 2020 to June 2021.
Digital sales went from NZ$270 million (US$180.6 million) in 2018/2019 to NZ$406 million (US$271.6 million) for the year ending June 30. For the following year it expects digital sales of NZ$418.3 million (US$279.8 million).
It expects total sales for the year ending June 30 2021 to reach NZ$1.23 billion (US$823 million).
Lotto NZ said: “We are still assessing the changes in player behaviour now that almost all Lotto outlets have re-opened, but we do not expect channel distribution to return to pre-Covid-19 levels.”
Lotto NZ also noted that in the year 2019/2020 there had been unprecedented Powerball jackpots, including a NZ$50 million (US$33.45 million) jackpot, “the highest-ever jackpot in New Zealand”.
It said: “We have no reason to believe that in the 2020/21 year, Powerball will cease to be the main driver of performance, and as such sales will continue to be subject to the relative fluctuations the Powerball jackpot drives”.
Operating expenses are expected to increase from 5.3 per cent of total sales during the year that ended June 30, to 6.6 per cent in the following year.
Profits were down last year to NZ$320.1 million (US$214.1 million) and are expected to fall further to NZ$280 million (US$187.3 million) in the current financial year.
