Global growth offsets Phumelela racing struggles
South African operator lobbies government to redress "imbalance" in levies paid by bookmakers for horse racing funding.
South African operator Phumelela Gaming and Leisure has posted a 2% year-on-year rise in group income it its interim results for the six months ending 31 January 2012, but highlighted concerns over the profitability of its local tote betting operations on horse racing.
Income rose from 443.4m South African Rand (R) to R451.7m for the period, while total profit after tax for the period grew 2% year-on-year to R35.6m. Phumelela CEO Rian du Plessis told South African magazine Business Live that the profit was largely attributable to a 57% rise in income from international operations, with markets such as Australia and Italy “ where income rose 19% – performing strongly.
However, domestic pre-tax profit was down 49% on the six months ending 31 January 2011, to R18.9m, with the group admitting that despite expecting an increase in turnover on tote betting on sports other than horse racing, “the profitability achieved by the group’s local tote betting operations on horseracing remains of concern and continues to receive management’s full attention.”
In the company’s results statement, Phumelela revealed that it had made “extensive submissions” to the South African parliament, looking to have the government redress the imbalance between the contributions made by tote operators and bookmakers to the funding of horse racing.
“If amendments to legislation are introduced, it should have a positive effect on the group’s earnings. It is not however realistically expected that any such changes will be implemented before the group’s year end,” the statement added.