Unaudited condensed consolidated interim financial results for … · 2018-02-20 · Unaudited...

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Results presentation Unaudited condensed consolidated interim financial results for the six months ended 31 January 2015 Rian Du Plessis, CEO

Transcript of Unaudited condensed consolidated interim financial results for … · 2018-02-20 · Unaudited...

Page 1: Unaudited condensed consolidated interim financial results for … · 2018-02-20 · Unaudited condensed consolidated interim financial results for the six months ended 31 January

Results presentationUnaudited condensed consolidated interim financial results for the six months ended 31 January 2015

Rian Du Plessis, CEO

Page 2: Unaudited condensed consolidated interim financial results for … · 2018-02-20 · Unaudited condensed consolidated interim financial results for the six months ended 31 January

Six months ended 31 January 2015

Agenda

• Key features of the period

• Financial analysis

• Strategic update

• Guidance for the remainder of 2015

• Appendix – detailed data

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Key features of theperiod

Rian Du Plessis, CEO

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Six months ended 31 January 2015

Key features

• Soccer, numbers and other sport betting offerings delivered a strong result with Fixed Odds profits alone more than doubling to over R15 million

• Profit from wholly owned international operations increased by 24% to R38 million

• Competitive and margin pressure in equity accounted Premier Gateway International (IoM) and mark-to-market loss on investment in ASL (Mauritius) impacted negatively

• International operations contributed 90% of Group pre-tax profit

• Headline earnings per share reduces by 3% to 65,69 cents from 67,77 cents

• Mark to market loss of R5 million on ASL (Mauritius) investment included in headline earnings

• Headline earnings increased by 6% excluding ASL and by 10% if abnormally high legal costs are also excluded

• Maintained interim dividend of 28 cents

• R106 million invested in facilities, share buy backs and a strategic investment in online gaming business Interbet

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Six months ended 31 January 2015

Key features

• Phumelela is a proud AAA Level 2 contributor – March 2015 verification audit confirmed an improved score of 91,99%, up from 86,12% in the previous year

• Betting World has grown to 60 outlets (50% growth in less than two years) with a further 22 license applications pending

• Premier Gateway International (Isle of Man) volumes dipped with margins under pressure

• disadvantaged by contractually being required to incur rand/euro currency conversions when placing bets and then in returning winnings - new competitors place bets and return winnings in euro’s only

• contract now amended and PGI is no longer required to incur the currency conversion

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Six months ended 31 January 2015

Key features - Legal matters and other

• Incurred high legal costs associated with combating abuse of intellectual property by bookmakers and related matters

• Detail is provided in the SENS announcement under corporate interests and litigation and in the 2014 annual report

• Unfolding events have strengthened Tellytrack and Phumelela’s resolve to take all appropriate measures to achieve a fair economic return, protect intellectual property and vigorously defend challenges of whatsoever nature

• Eastern Cape Gambling Board ruled in Phumelela’s favour on 7 April 2015

• The Group is considering various alternatives in respect of its strategic shareholding in Betting World Nigeria (exposure is approximately R11 million)

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Financial analysis

Rian Du Plessis, CEO

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Six months ended 31 January 2015

Group result

• PBITDA positively impacted by a strong Fixed Odds result (up 84%) and higher International profit (up 24% before equity a/c profits)

• Sports, LPM and fixed odds pre-tax profit increased by 28% from R74,5m to R95,5m

• Total international pre-tax profits of R57,7m before ASL loss, down 8%

• Dividends from PGI R27m • Net investment up from

R36m to R106m -investment in Interbet and increased retail footprint and including a R41 million share buy-back

• Cash generated before movement in working capital up 25% to R70m

• Balance sheet remains strong with modest gearing

* Before mark to market loss of R4,6m on listed ASL (Mauritius) investment

R'000 H12015 H12014 % chg

Income

Income from local operations 561 124 474 533 18%

Income from international operations 98 550 112 095 (12%)

Total income 659 674 586 628 12%

PBITDA 70 016 55 283 27%

Profit before equity a/c income * 43 732 30 501 43%

Equity accounted profit 19 866 31 926 (38%)

Attributable profit 49 723 51 727 (4%)

Headline earnings 49 519 51 227 (3%)

Adjusted headline earnings* 54 126 51 227 6%

HEPS – cents 65,69 67,77 (3%)

Adjusted HEPS – cents* 71,80 67,77 6%

Ordinary dividend - cents 28,00 28,00

Financial position

Total assets 799 878 779 686 3%

Net investment (inc. share buy-back) 106 349 36 363 192%

Net (debt)/cash (7 457) 49 666

Net asset value per share – cents 595,91 585,69 2%

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Six months ended 31 January 2015

Tote betting and horse racing and broadcasting

R'000 H12015 H12014 % chg

Horseracing net betting income 231 905 226 529 2%

Other sports net betting income 116 246 93 731 24%

Other income * 104 430 95 788 9%

Investment income 1 184 186 537%

Net income 453 765 416 234 9%

Stakes (prize monies) 93 971 92 110 2%

Operating expenses ^ 349 742 311 497 12%

PBITDA 10 052 12 627 (20%)

Pre-tax loss (8 740) (7 464) 17%

Local operations • Net betting income on soccer Tote bets up 24%

• Horseracing Tote betting recovering from last year’s suspension of international content on Tellytrack

• Other income up 9% - LPM’s up 19%, sales & hospitality up 53% and miscellaneous income up 76%

• Expenses reflect investment in the retail expansion plus high legal and consultancy fees

* see appendix for breakdown of income – Gambling Board levies, unclaimed dividends & breakages, product fees & commingling levy, LPMs, Tellytrack, stable rentals, hospitality, forex, advertising, etc.^ inflated by substantially higher legal and related costs iro Tellytrack/bookmaker disputes

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Six months ended 31 January 2015

Fixed odds (Betting World)

R'000 H12015 H12014 % chg

Net betting income 74 594 53 611 39%

Other 7 901 7 040 12%

Total net income 82 495 60 735 36%

Operating expenses 61 022 49 063 24%

PBITDA 21 473 11 672 84%

Pre-tax profit 14 626 7 078 107%

Local operations • Expansion of Betting World to 60 retail outlets

• Bespoke fixed odds betting software became fully operational in second half of prior year

• GGR increases by 48% to R641 million - 46% on horseracing, 35% on numbers bets and 19% on other sports

• Fixed Odds net betting income on sports other than horseracing increased by 206% to R17m, by 37% to R31m on numbers and by 5% to R27m on horseracing

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Six months ended 31 January 2015

Horseracing media rights & betting royalties

R'000 H12015 H12014 % chg

Net income 104 973 112 489 (7%)

Total expenses * 66 482 81 505 (18%)

PBITDA 38 491 30 984 24%

Loss on remeasurement of ASL (4 607)

Equity a/c profits 19 388 31 926 (39%)

Pre-tax profit 53 105 62 813 (15%)

International operations • Reduced contribution from Premier Gateway (Isle of Man) as a result of currency exchange factors affecting margin, reduced volume and new competitive features

• Pleasing growth in income out of UK, Australasia, Singapore, Turkey, Cyprus and Malaysia on good demand for South African horseracing content and betting thereon

• Tote commingled income grew by 38%, fees paid by offshore bookmakers are up 14%, total commissions received from international Totes, other than the Isle of Man Tote, are up 5%

* Operating expenses down by 14%

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Strategic update

Rian Du Plessis, CEO

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Six months ended 31 January 2015

(74,9)

62,8

7,1

58,6

8,8

(0,4)

(89,6)

53,1

14,6

70,7

10,25,9

-100

-80

-60

-40

-20

0

20

40

60

80

LOCAL HORSERACING INTERNATIONAL FIXED ODDS SPORT LIMITED PAY-OUT LOCAL TOTAL

H12014 H1 2015

Pre-tax income per segment R million

Diversification driving profits

-------------------------------------------------------------------------------------------------

-----------------------------------Total horseracing

--------------------------------------------------------------Diversified business

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Six months ended 31 January 2015

(0,4)

62,8 62,4

5,9

57,7

63,6

-10

0

10

20

30

40

50

60

70

LOCAL INTERNATIONAL * TOTAL

H12014 H12015

Pre-tax income R million

International income 90% of total group PBT

* Excluding R4,6m remeasurement on listed ASL (Mauritius) investment

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Six months ended 31 January 2015

Tellytrack/bookmaker litigation – commercial context

R million 2014

Tellytrack production costs 72,4

On course 15,8

Studio 39,0

Inward and outward distribution 17,6

Tote payment for international content 36,7

Estimate due by bookmakers for international content 36,7

Total cost of Tellytrack 145,8

Bookmakers funding last year (18,0)

Tote funding (91,1)

Unfunded (Bookmakers for international content) (36,7)

Total cost of Tellytrack (145,8)

Cost of staging 440 race meetings (including prize money) 742,0

Contribution from Gambling Boards (ex fixed odds punters winnings) (105,8)

Net cost of staging 440 race meetings (funded by tote/racing operators) 636,2

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Six months ended 31 January 2015

2015 Medium term

Local growth and development

• Investment in retail fixed odds and tote betting shops is yielding anticipated returns with new licences pending

• Initiatives to grow complementary betting opportunities to horseracing are bearing fruit and providing a solid and profitable underpin to our local activities

• Strategic shareholding in Interbet is an exciting new development and expected to be earnings accretive within the first year

• On-course attendances and yearling sale prices continue to increase by double digits, which provides confirmation that the sport has turned the corner

• Organic growth supplemented by acquisitions that dovetail with our diversification strategy

• Continued innovation and product development “Life Changing” Tote bets

• Further initiatives that support the competitive appeal of South African thoroughbred horseracing

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Six months ended 31 January 2015

2015 Medium term

International growth and development

• Continued growth in provision of South African horseracing content and betting thereon to international markets

• Exciting pipeline of new betting opportunities, including Hong Kong and Singapore commingling

• Renegotiation of LBO rights

• Tote Soccer betting in Africa and Latin America

• Isle of Man has further potential

• Phumelela will continue to be world leaders in commingling, simulcasting and cost efficiencies

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Guidance for the remainder of 2015

Rian Du Plessis, CEO

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Six months ended 31 January 2015

Guidance for remainder of 2015

• Premier Gateway International operates in a competitive environment and has an exciting pipeline of new betting opportunities that is expected to provide a new platform for growth

• Real growth anticipated in net Tote betting income on soccer and in net Fixed Odds betting income on sports other than horseracing and on numbers

• Continued pursuit of fair economic value for the Group’s intellectual property

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Results presentationUnaudited condensed consolidated interim financial results for the six months ended 31 January 2015

Thank you