Phumelela Gaming and Leisure widens losses
DURBAN - South Africa's largest horse racing operator Phumelela Gaming and Leisure widened its losses from operations to R93.5 million in the six months to end January, negatively impacted by deeping losses in local operations.
This loss was up from last year’s loss from operations of R39.8m.
Phumelela said the current results also reflect the withholding of its 50 percent share of the 6 percent levy on punters’ winnings on fixed-odd bets on horse racing in Gauteng.
During the period Phumelela lost R35m as a result of the withholding of the levy.
The group expects this loss to amount to approximately R75m for full-year.
However, the group has challenged the withholding of the levy and has asked the courts to set aside the findings of public protector Busisiwe Mkhwebane.
This has resulted in the local operations reporting a combined loss of R115.1m, up from last year’s combined loss of R61.4m despite a good performance from international operations contributing a profit before tax of R113.1m.
“Phumelela has successful and profitable international media and tote operations, but a crossover point was reached last year where the success of international is insufficient to offset escalating losses in running South African horse racing. This international income requires that we have a sustainable horse racing base in South Africa,” the group said.
The group also reported a headline loss of 0.89 cents a share compared to headline earnings per share (Heps) of 68.02c reported last year.
Looking ahead the group said it is assessing the impact of Covid-19 on its business operations.
“The nationwide lockdown in the country is having a detrimental impact on horse racing and on the tote and fixed odds operations. Since the nationwide lockdown no revenue has been generated. While business continuity plans are in place, the group is dealing with circumstances beyond its control as the crisis is an unforeseeable and unavoidable event,” the group said.