I have just had a quick squizz at these and to be frank, they are a disaster. It seems the market agrees with me, the shares hit a 70 week low of 810c a share before "recovering" to a close at 885c, a 11% drop on the day. Listening to an analyst on Cape Talk, the sentiment towards the share is negative and his opinion is this share will be testing the 500c mark by year end unless there is drastic improvement. Let's hope he is accurate in his summation, buyouts are so much easier at that level.
As per usual, local operations are blamed and everything but Brexit was blamed for the poor performance. Funnily enough incompetence and poor management were not listed as a factor. It seems that the Betting World CEO has taken the rap and has resigned, I wonder if he was pushed or fell on his sword? One thing that stands out for me is the shocking results returned by Supabets when compared to previous performances. It seems that Phumelela have bought themselves a very juicy lemon here. What odds a Supabet boykie takes over the fixed odds role? You couldn't script this in a pantomime. For the first time ever, dividends have been withheld.
Larry must be proud of how he has stuck so many people away.
There are a number of threads running through these financials which do not augur well for local racing :
1.) The operator is quick to tell us how well the 'overseas operations' are doing and that 41(?) jurisdictions now take the South African pictures.
Amazingly it seems to escape the attention of the operator that the 'raw material' driving these 'media exports' ( ie the horses ) costs them NOTHING outside of prize money; which is only paid to the connections of the successful horses in any given field. Even there they have habitually offered prize money over many years which fails to even keep abreast of inflation in the full knowledge that owners are either too apathetic or lacking in organisation to resist this strangulation by, perhaps, withdrawing their animals from competition until a more sustainable arrangement could be agreed upon.
2.) The supposed representative of the owner group is a front man for the operator who, if his package had mirrored stakes increases, would be paid about 50% of the R3 million pa he currently earns.
3.) Unless I am wholly misinformed I have always been led to believe that dividend declarations have paid a significant role in stakes funding. If this funding does indeed influence the prize money how will the total suspension of the dividend affect the stakes pot going forward?
4.) The financials make repeated references to 'right sizing' ; a polite description for retrenchments. Clearly a lot of staff and services are about to get chopped.
5.) I find it amusing that the operator has traditionally & relentlessly promoted the tote whilst buying bookmaking licences. Is there something about their bookmaking rights which are somehow more ethical than those licences held by other organisations?
6.) I trust they will be withdrawing their marketing material which drones on about how much employment they provide once the 'right sizing' gets into full swing.
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The following article was published in September 2018 as Rian du Plessis headed for the exits. Note Bernard Kantor sobbing crocodile tears in the background although, I suspect, not as much as he might be now when reviewing his Phumelela shareholding :
'Executives are sometimes only appreciated after they’ve departed. And Investec co-founder and Phumelela chairman Bernard Kantor, believes South Africa’s horse racing community will begin to realise this when reflecting on yesterday’s resignation of the JSE-listed betting company’s long-serving CEO. Kantor says “I’m very, very sad to see Rian du Plessis leave.”
Du Plessis tendered his resignation immediately after Phulemela’s audit committee approved financial results for the year to end July. The 57-year-old, who has run the company for nine and a half years, says timing is ideal: the numbers he is responsible for have certified, and when they’re presented to shareholders, successor John Stuart can focus on the way ahead. ( Looks like a hospital pass to me, John ).
The departing head of Phumelela has been given a rough ride by the racing community since the fall from grace of his friend of 40 years, Steinhoff CEO Markus Jooste. ( Well - he was His Masters' Voice so inevitably some s***t is going to stick). Du Plessis has no regrets: “Yes, I have agreed to stand by him without condoning what he has done. But my departure has absolutely nothing to do with Markus or Steinhoff.”
Independently wealthy after a successful business career (RMB head of corporate finance; CEO of tech group Comparex) Du Plessis was coaxed out of retirement by Kantor and Jooste. While running the business he has steadily bought Phumelela stock and is now its 5th largest shareholder owning 6% of the equity. Will he be selling any shares? “Not unless you bid me at least R50.” That could require a long wait. Yesterday the stock closed at R13.40.' (September 2018)
Yip, Riaan. Your departure really was a sad day for all of us........I think you might well wait quite some time for someone to offer you that R50 for a Phumelela share.
On Friday last the share closed at R 8,85.
Last edit: 6 years 2 months ago by Garrick.
The following user(s) said Thank You: Muhtiman, Over the Air, Felix
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