Phumelela losses widen by 135%
The country's largest horse racing operator said its losses from operations widened to R93.5 million in the six months to end January, negatively impacted by deepening losses in local operations, up from last year's loss of R39.8m. Phumelela is part of the national horse racing authority that is co-ordinating representations on behalf of all the key players in horse racing to the national coronavirus command council.
“The resumption of horse racing behind closed doors with strict protocols in place, as is the case in several horse racing jurisdictions overseas, is an urgent imperative.
"The entire horse racing value chain is now in jeopardy. The board acknowledges the government’s actions during the Covid-19 pandemic to protect citizens from the virus.
"However, the lockdown is devastating for most businesses and an equitable balance now needs to be found between limiting the impact of the virus on the population and ensuring vital sectors of the economy can survive,” the group said.
Last month Phumelela also warned the government that 40000 jobs linked to the horse racing industry were on the line as a result of the lockdown. Phumelela said yesterday that its interim results also reflected the withholding of its 50percent 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 and expected this loss to amount to R75m for the 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.
The loss of the levy 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 0.89cents a share compared to headline earnings per share of 68.02c reported last year.
Phumelela's share price closed 8.75percent down at R0.73 on the JSE yesterday.