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Phumelela – R255 Million Swing

Audited results delayed further

Further to the voluntary trading update and trading statement released on SENS on 12 July 2019, Phumelela Gaming & Leisure Ltd shareholders are advised that the Board is now reasonably certain that the Company will make a basic loss and a headline loss for the year, as follows:

  • a basic loss is expected of between R80 million and R100 million, compared with a basic profit of R155.1 million in the prior year;
  • a basic loss per share is expected of between 80 cents and 100 cents, compared with a basic profit of 153.78 cents in the prior year;.
  • a headline loss is expected of between R90 million and R100 million, compared with a headline profit of R155.6 million in the prior year; and
  • a headline loss per share is expected of between 90 cents and 100 cents, compared with a headline profit of 154.23 cents in the prior year, which equates to a decrease of between 158% and 165%.

Included within the basic loss and headline loss are the following material items which collectively amount to R110 million:

  • R30 million in restructuring costs;
  • R32 million for a franchise provision in the North West province;
  • R26 million in lost income for four months of the financial year due to the withholding of the Gauteng betting levy, as referenced in previous SENS announcements;
  • R12 million annual cost due to the increase in VAT to 15% in April 2018, which is an ongoing reduction in income as there is no relief on the take-out ratio after provincial taxes and levies; and
  • R10 million cost for the social responsibility development programme.

The estimated financial information contained in this announcement has not been audited, reviewed or reported upon by the Group’s external auditors.

Notice of postponement of release of annual results for the twelve months ended 31 July 2019

Shareholders are advised that the Company is in the process of finalising results for the 12 months ended 31 July 2019 which is taking longer than anticipated.

As a result, it is now expected that the audited results will be released on SENS on or before 29 November 2019.

Renewal of cautionary announcement

Further to the SENS announcement dated 12 September 2019, the Company remains under cautionary as engagements with the Gauteng Member of the Executive Council responsible for Economic Development, Environment, Agriculture and Rural Development (“the MEC”) and the Gauteng Gambling Board are still in progress.

Shareholders are advised to continue to exercise caution when dealing in the Company’s securities.

  • SENS announcement via www.sharenet.co.za on 21 October 2019

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12 comments on “Phumelela – R255 Million Swing

  1. P B Reddy says:

    R30 million in restructuring costs – Was this not mainly a Betting World cost? Not all of the cost would have been incurred or paid in the 2019 AFY.

    R32 million for a franchise provision in the North West province – Remember that a provision is not a payment. There are no advertised gazetted changes by PHUM in the North West Province about it acquiring a franchise in the 2019 AFY. Provisions for the North West were already made in a previous year.

    R26 million in lost income for four months of the financial year due to the withholding of the Gauteng betting levy, as referenced in previous SENS announcements – This stated loss is not a loss at all.If PHUM is able to regard this as a loss it can forever and every year report the loss. I thought that 30% of the levy earned by PHUM would go to the RA.

    R12 million annual cost due to the increase in VAT to 15% in April 2018, which is an ongoing reduction in income as there is no relief on the take-out ratio after provincial taxes and levies – This is mumbo jumbo poppy cock stuff. PHUM is able to regard this as a loss it can forever and every year report the loss.;

    R10 million cost for the social responsibility development programme – The overseas trips and parties for management are now seen as social responsibility. Hee haw.

    If a basic loss is expected of between R80 million and R100 million, it makes no sense that the above losses total R110 million?

  2. James says:

    I am keen to know where the “brilliant” Futsal concept fits in. I think we should at least be afforded the costs incurred in this fiasco, but probably hidden in Social upliftment???

  3. Mini B says:

    I hope Scotty has declared this financial aberration to E &Y. In addition to claiming the full agreed operators cost paid to the Jockey Club, PGL is claiming expenses actually incurred by the Jockey Club as PGL expenses

  4. Rian says:

    Im glad you going after the FOOLS at TAB James that mess with Punters money
    PLEASE include the Time bomb, Soccer 15 carryovers, Blitz rubbish , Exotic carryovers and most o all take your cameras into the TAB outlets and chat to the staff and punters

  5. Brett Maselle says:

    Phumelela must not forget to notify its auditors that during the 2019 annual financial year it undertook to the NHA to contribute monies towards the holding of the 2020 Asian Racing Conference in Cape Town. This was confirmed to members of the NHA by the NHA chairman at the NHA AGM held in January 2019. See the minutes of the AGM. I understand that the amount involved is substantial and required to be paid in 2020.

  6. Steve Reid says:

    Resignation of Non-Executive Director

    Phumelela Gaming & Leisure Limited
    (Registration number 1997/016610/06)
    (Incorporated in the Republic of South Africa)
    Share Code: PHM ISIN: ZAE000039269
    (“Phumelela” or the “Company”)

    Resignation of Non-Executive Director

    In compliance with Section 3.59 of the Listings Requirements of the JSE Limited, the
    Phumelela Board of Directors (“the Board”) wishes to inform shareholders that Ms
    Fikile Magubane has tendered her resignation as non-executive director and also as a
    member of the Audit and Risk Committee for personal reasons, effective immediately.

    The Board wishes to extend its appreciation to Ms Magubane for her valuable
    contribution to the Company and wishes her well in her future endeavours.

    Johannesburg
    30 October 2019

    Sponsor and Investment Bank
    Investec Bank Limited

    Interesting

    1. Editor says:

      Appointed July 2018
      Ms Fikile Magubane:
      Non-executive director and member of the audit and risk committee

      Ms Magubane is a director of Southern African Development Community (“SADC”) in
      Africa bilateral branch. Prior to this, she was ambassador extraordinary and
      plenipotentiary of the Republic of South Africa to the kingdom of Spain and Andorra
      and has held senior positions in the South African Reserve Bank and the Gauteng
      provincial government.

      Ms Magubane holds an honorary doctorate degree in management sciences conferred
      by the school of management sciences at the university of Venda, a master’s degree
      in public administration from Kennedy school of government at Harvard university, a
      diploma in public relations from Damelin management school, and a BA in economics
      and accounting from the university of Botswana, Lesotho and Swaziland

  7. Steve Reid says:

    Effective immediately has such a sombre ring to doesn’t it?

  8. WILLIAM MILKOVITCH says:

    And now, what with Herman Mashaba signing on for UIF …

  9. Mbuso says:

    Hi William,I have just came out of hospital and I haven’t been following you regarding Peoples’ Pick 6,can I still deposit the money for Saturdays racing,update please.

  10. WILLIAM MILKOVITCH says:

    Oh sure Mbuso, I did send you the group e-mail and welcome back

  11. WILLIAM MILKOVITCH says:

    I’m glad to here you are out of hospital and recovering Mbuso…which hospital were you in ?

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