While the Mint will continue to see a further erosion of the use of currency, a refreshed piece of consumer research in July 2019 combined with early signals of future orders from the banks, indicates that demand for circulating coins from the Mint is likely to be at the same level as in 2018–19.
With intensifying global economic uncertainty, the demand for physical assets such as gold and to a lesser extent silver as a hedge against uncertainty, has increased. This together with some major events and significant anniversaries has created the environment for the Mint to potentially break commercial/ numismatic revenue records.
The Mint has budgeted for circulating coin revenue of $58 million with seigniorage at $33 million and commercial revenue of $90 million with an EBIT of $15 million resulting in combined revenue of $148 million and a net surplus of $48 million—20 per cent up on the 2018–19 year. This is expected to result in a budgeted 35 per cent return on net assets.
With programs planned for this year, combined with an increase in sales from Pacific Nations and a greater focus on implementing the investment products program, the Mint is confident it can deliver at least the budgeted commercial EBIT, if not better.
The major ‘investment’ program in 2019–20 will be:
- leveraging the Mint’s status as a National Institution by telling the stories of currency and educating primary students on financial literacy
- building and securing vendor and customer relationships
- implementing the innovation program
- focusing on optimising business processes to drive maximum efficiency.
The 2019–20 financial year will be the year the Mint will complete the foundation by leveraging its assets and capability and thereby creating a business model that will continue to provide over 30 per cent return on net assets over the next three year strategic planning period and potentially beyond.
With the ongoing encouragement of Government; continuing commitment of the staff; advice and support from key stakeholders and advisers; strong supplier relationships; and a highly engaged customer base, the Mint’s future remains very positive.