Phumelela: Rand hedge racing business overcomes Brexit headwinds, poised for better
With 81% of its profits generated in hard currencies – primarily the British Pound – JSE-listed horse racing company Phumelela was hit by adverse currency movements in its financial year to end July. With losses after Brexit, dropping translated UK earnings by 20%, shareholders can be well satisfied with the overall same-again earnings and dividends for the year. Internal challenges remain, including an ongoing court case with bookmakers and the need to cut costs in a loss-making legacy business. But Phumelela’s R437m deal for 50% of booming betting supermarket operation Supabets will bring fresh impetus and ideas to the SA operations, while a normalised currency environment would also have a significant impact as earnings are highly geared to the Rand. As you’ll hear in this interview, CEO Rian du Plessis is approaching the new financial year with confidence. As well he might, with the previous headwinds likely to change in a more positive direction. – Alec Hogg
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