Racing Australia Annual Report 2017

14 | Racing Australia Annual Report 2017 Racing Australia continues to deliver strong financial results, which ensures the company has the capacity to accelerate loan repayments while continuing to invest in major projects such as the Single National System, infrastructure and our people. Our people are our greatest asset. The collective knowledge and experience across a diverse set of skills continues to ensure we are well positioned to help deliver our vision of being the world’s leading Thoroughbred Racing Industry. With the Single National System initial project implementation coming to a conclusion and the organisational structure reset, Racing Australia is well positioned to leverage existing assets further and identify new commercial opportunities. 1. FINANCIALS The 2016-2017 financial year was the second full financial year following the purchase of the Australian Stud Book and merger of Racing Information Services Australia (RISA) and the Australian Racing Board (ARB) in April 2015 to create the company Racing Australia. As a result the first full 24 month year on year comparison of the merged Racing Australia operations is now possible. Analysis of the Racing Australia financials over this period confirms continued growth of Racing Australia’s consolidated surplus inclusive of depreciation and amortisation from $2,936,955 in 2015-2016 to $3,774,648 in 2016-2017, an increase of $838,593 for the full year on year comparison. Exclusive of depreciation, amortisation and interest the full year EBITDA surplus for the year ended 30 June 2017 was $5,345,789, an increase of $853,562 on the previous full financial year. Under the Racing Australia Constitution at the discretion of the Racing Australia Board the surpluses are to be returned to the Thoroughbred industry via the Principal Racing Authorities in the form of non repayable grants or reinvested in the Racing Australia business. Under agreement with the industry, unless reinvested in the Racing Australia business, the balance of Racing Australia’s surpluses is currently being used to reduce the Bank Loan. The bank loan commenced in 2014 to fund the purchase of the Australian Stud Book and with $2,500,000 paid off the principal during the financial year the balance as at 30 June 2017 is $7,767,512. With further accelerated loan payments from cash reserves it is forecast the loan will be repaid two years early. With $7,055,087 cash at Bank and on hand as at 30 June 2017 Racing Australia has significant cash reserves for future investment and accelerate loan repayments. Of the $7,055,087, $527,098 is held in trust from the $20 collected with every horse registration for the Racing Australia Research and Development Fund, with a further $850,000 held in trust for the Jockey Insurance program collected from the Principal Racing Authorities to administer the insurance premium aggregate deductable. This leaves $5,677,989 in cash reserves directly attributable to Racing Australia. A significant contributor to the improved surplus result has been the successful transitioning of the parentage testing service provider used by the Australian Stud Book. From June 2016 Massey University has provided this service under new commercial and service arrangements which have ensured service standards have been enhanced at a reduced cost. During the year Racing Australia continued to invest in the future of the organisation and its capacity to deliver products and services to the Thoroughbred Industry. This included the Single National System project, infrastructure and importantly our people with an enhanced organisation structure implemented throughout the year to meet growing demand. Myles Foreman Operations Chief Executive Officer Operations Chief Executive Officer’s Report