Prize bond fund to hit €500m

THE Prize Bond Fund should exceed €500 million this year as sales continue to soar in the first three months of the year.

Sales rose by 62% to €134.5m in 2003 and chairman of The Prize Bond Company, Michael O'Keeffe said he is confident the prize bond fund, which rose by 21% in 2003 to €453.8m, will hit the €500m mark by the end of 2004.

The Prize Bond Company's annual report for the year ended December 31, 2003 shows that gross sales increased by 62% to €134.5m and that after encashments of €53.8m, net sales hit €80.7m.

The National Treasury Management Agency, managers of the national debt, pays a return of 2.4% on the fund to provide the €10.8m in tax free prizes which were won by 105,322 lucky bond holders in 2003, up 16% on 2002.

Over the past five years the amount invested in Prize Bonds, has increased from €269m in 1999 to €454m in 2003 and the value of the prizes paid to Prize Bond holders per annum has increased from €7m in 1999 to €10.8m in 2003.

Mr O'Keefe attributed the continued increase in sales to the low returns on bank deposits, volatile equity markets and the 100% security on investments.

"The strong gross sales during 2003 reflect the attractiveness of the Prize Bonds product as a secure, risk-free, state guaranteed investment option.

"It is encouraging to note the results of a recently conducted survey by Lansdowne Market Research highlighting that 45% of the Irish population have at some time invested in Prize Bonds," he said.

The accounts show that its two shareholders An Post and Fexco who hold 50% each of company shares saw the amount paid to them in contract fees increase in 2003.

An Post earned €1,711,662 up from €1,266,701 in 2002 while Fexco earned €2,882,766 up from €2,617,292.

Fexco employs 37 people working at its operational centre in Killorglin, Co Kerry, working on Prize Bond work.

An Post has just six people at its head office working on prize bond administrative work.

The company spent just €676,035 in marketing in 2003 which helped to deliver gross sales of €134.5m.

The Prize Bond Company entered into a contract on March 21, 2000 with the National Treasury Management Agency. The contract provides for the administration of the Prize Bond Scheme by the company from November, 1999 until October 31, 2009.

And the company entered into a contract dated March 21, 2000, with Fexco and An Post which also runs until October 31, 2009.