DURBAN – Phumelela Gaming and Leisure has pinned its hopes on its recently acquired Supabets, Interbet and Supaworld to boost its flagging fortunes in the next financial year as the stagnant economy puts its operations on the back foot.
The group said Supabets and Interbet had re-energised the betting industry and played an important role in the business growth as well as returns to shareholders.
It said it anticipated that the assets would increase performance once they reached optimal potential.
Group’s new chief executive John Stuart said it would take time for start-ups such as Supaworld to gain traction. “We are well on the way and expect the business to start contributing to earnings in financial year 2019,” Stuart said.
The group said Supaworld opened four stores during the year to end July with at least 12 mega stores planned in the next two years.
Phumelela is now a multiple product betting and media rights group of companies with an extensive international footprint.
Stuart said the group’s ongoing diversification strategy continued to yield significant benefits from the internationalisation of operations, recent investments including Supabets, Interbet and an expanding range of betting products.
Stuart replaced long-serving chief executive Rian du Plessis, who resigned last month after shareholders raised concerns about his close relationship with former Steinhoff chief executive Markus Jooste and Phumelela’s exposure to the under-fire furniture retailer.
Phumelela said Supabets and Interbet contributed to the 6 percent increase in headline earnings to R156.6 million for the year to end July.
Phumelela holds a 50 percent stake in both Supabets and Interbet.
It said consolidated net income of R1.56 billion came in line with the corresponding period last year with betting operations contributing 68 percent, media 30 percent, and administrative and support services contributing the remaining 2 percent.
The group also reported 8 percent decline in headline earnings per share to 154.23 cents a share, down from 167.96c. The group maintained a dividend of 104c a share, on par with last year’s payout.
Stuart said the gaming industry would continue to face challenging economic headwinds in South Africa.
He said the group, however, remained optimistic of earnings growth in the year ahead.
“Our betting operations’ proactive moves to grow turnover locally and the expanding international footprint, and rising overseas demand for quality South African horse-racing content in our media segment, bode well for future growth,” Stuart said.
Phumelela shares gained 0.29 percent on Friday to close at R13.60 on the JSE.