When will TAB and PHUMELELA wake up

Rob

As I see it, Phumelela is a quoted company which trades on the stock exchange. Its share price today is about 950c and its net asset value per share is approx R 550c leaving R 4 per share blue sky. Now for me blue sky represents the premium you pay for above average management, monopolistic trading conditions, superior assets or exceptional future growth.

Judging by the general comments on the standard of customer care, facilities provided and management evident it seems that the only reason to pay for blue sky would be the barrier to entry created by the monopolistic rights that Phumelela have to offer tote facilities. Under these circumstances you would think that this would be jealously guarded and protected by offering a good service rather than threatening bookies who offer the open bet.

If EPS is approx 110c this year then I cannot see any reason why anybody would pay more than NAV per share to buy into this company. This would represent a +/- 20% ROE, about right for me for this business and business model.

The biggest asset category on Phumelela's balance sheet would be Property whose value could be dramatically enhanced if sold off or retained for development rather than for horseracing purposes. Is this what drives the blue sky and if so do Phumelela really give a shit about customer service bearing in mind what really drives the all important share price.

Gajima,I agree with you 100%.Theoretically,it's lack of service is a strong reason for the competitions board to consider new entrants.You would think that they would try to prevent that at all cost,unless your assessment is spot on!

Interesting reading.

www.fin24.com/Companies/Phumelela-HEPS-tumble-16-20101004

Thanks Gajima

Going down when other shares on the rise.

Quite impressive for a bunch of accountants.

www.busrep.co.za/?fArticleId=5672887

Looking ahead, Du Plessis said local and international trading conditions were expected to remain challenging.

"Continued emphasis will be on cost containment, growing local revenues through the expansion of our retail footprint, the use of technology and the introduction of new bet types and exploring additional international business opportunities." - Sapa

Looking ahead i guess the refer to tomorrow

stupid question - what does Du Plessis mean by 'retail footprint' ? - what exactly is this?

Warren Buffet preaches that you should not invest in any company unless you have utmost respect for it's management.
It appears,even having a monopoly,can't obviate that!

Mr Rian was on 702 last night and said that the WORLD CUP did not really help earnings as the R6 punter saved his money to buy tickets for the soccer instead of punting.... i doubt if that was a factor at all - more like poor marketing so a golden opportunity missed to introduce soccer punters - he also did not mention the impact comingling had on driving punters away to bookmakers (i have not used my telebet account for perhaps 8-9 months

Mr Hawaii, just for the record I too have not used / topped up my tele-bet account this year.

Elvis I do wish to add something - I used to punt almost everyday (not huge amounts but at the very least a R300 PA per day) - due to all racing's problems over the past few months (years????) my only bets this year have been on one or two horses i still have an intrest in and the occassional bet on a friend/stable horse so even my bookmaker activity has almost stopped - this from a person that used to have the tv on 232 permenantly - The will to punt has diminished as rushing about to Hollywood to place a bet or make a deposit (i know Credit cards are an easy alternative to deposit) has resulted in a decreased intrest in racing - I'm not sure if I should be thankful or not but I do seem to have more cash in my wallet(perhaps I was just a piss poor punter?)