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The Gold Circle Board Deserves More Credit

History tells a story

Being a racehorse breeder I find myself totally reliant on racing in South Africa being a success, and in so saying, I read all things racing and participate where I can.

Lorraine de Klerk writes in the Sporting Post Mailbag that she considers herself an avid racegoer and active member of Gold Circle – one of only 910 members.

Having read a comment recently in the Sporting Post –

“giving the same people who blew R250 m another R200 m is madness”

I find it impossible not to comment!

It took me a click of a button to easily access the last 10 Annual (audited) Gold Circle reports from their web page.

They begin with an easy to understand summary given by the Chairman.

Glancing through a few you fall so easily across the following facts and figures pertaining to the Clairwood sale and the proceeds thereof.

For ease of reference, here are a few :

  • 2011    

Gold Circle Board under the Chairmanship Robert Mauvis (auditors KPMG)

Clairwood sold for R 430 million

  • 2012 – 2013      

Clairwood rented for R 4.7 million

  • 2012      

August, funds received – R 200 million rand of this will be ring-fenced in accorandance with Members Resolution

Stakes paid to owners R 73 million

Purchase of 550 new tote terminals – major upgrade

Demerger from Western Cape racing at a cost of R 7.3 million

International income generated through the sale of SA Racing overseas (managed by Phumelela) R 21.4 million

  • 2013   

Gold Circle profit before taxation R 8.8 million

Stakes paid to owners R 87.1 million

  • 2012 – 2014   

Capital cost of planning, development and construction of 500 stables, accommodation, moving equipment, horses etc and upgrade of facilities including synethic track at Summerveld – R 165 million

  • 2013    

Grooms accommodation offered at Ashburton & Summerveld to grooms at no cost. All water, electricity and maintenance is carried by Gold Circle

  • 2014      

July, last race meeting at Clairwood

  • 2014      

June, 1st race meeting on Greyville Polytrack

  • 2014     

Decisions made by the Tellytrack Board with regard to broadcast product pricing brought about R 90 million negative variance to Gold Circle income

Sports Betting & numbers increase

Stakes paid to owners R 93.3 million

Upgrade to Durban View Room

Move and upgrade bookmakers to undercover area

Construction of Lightning Shot Bar at Greyville

Chairman included a detailed report on the bookmakers dispute with Tellytrack

  • 2015 

Tellytrack income down 19 %

Installation and upgrade of large screen TV’s at Greyville

Stakes paid to owners R 93.5 (same as 2014)

  • 2016     

Gold Circle Board under the Chairmanship of Phumela Mnganga (auditors remain KPMG)

Stakes paid to owners R 109.3 million – 17 % increase

Tote income decrease by 3.4 %

During Champion’s Season 2000 horses stabled between the two centres

  • 2017     

Stakes paid to owners R 105.4 – down 3.6 % due to decrease in number of races

  • 2018   

Greyville Convention Centre generated income approx. R 11 million

Stakes paid to owners R 110.8 million

  • 2019      

Stakes paid to owners R 114.8 million

Greyville Convention Centre generated income R 10.8 million

Fitting of solar panels to Greyville stadium roof

Upgrade to Saddlers Arms and total makeover of the Short Head punters facilities

Total Gold Circle assets = R 893 million (liabilities R 203 million)

I understand a lot of people refer back historically to racing in the by-gone era of Champagne & Roses and it is a lovely memory.

The questions posed as to why there aren’t more people at racing have lost all impetus when reflecting on sport worldwide and the television coverage thereof together with the dip in the economy.

Also a fact so many miss is that ‘in the old days’ before casinos and numbers betting and sports betting and lottos, racing owned the lions share of the gambling rand. Now however racing owns only 0.06 %  of that same gambling rand.

In these hard and unprecedented times the positive is our life boat…

How wonderful is it that we have a polytrack to race on during incliment weather?

How wonderful is it that we have the facilities to host visiting trainers during the Champion Season?

How wonderful is it that the current management moved with the times selling the naming rights of our stadium and securing the sponsorship of Hollywood Bets?

How wonderful is it that we now have money set aside for that tragedy or disaster often referred to as a rainy day?

I am proud of the board, both past and present!

  • Pics – Hollywoodbets Greyville by Candiese Lenferna

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16 comments on “The Gold Circle Board Deserves More Credit

  1. hilton witz says:

    Please could you supply the bottom line From year to year Mrs De Klerk for example profits and losses and repeat Mr Butchers words for the current financial year and for the next year …Considering your husband i assume is Mr Koos De Klerk who has been on the gold circle board for years and receives directors fees in excess of 100 000 rand a year for attending meetings a few times a year im not surprised you think gold circle are a shining star….

    1. Editor says:

      We telephoned Mrs de Klerk
      She confirms that she is the wife of Mr Koos de Klerk, longstanding Gold Circle Director.
      She also confirms that she wrote the letter in her capacity as a Gold Circle member in her own right.

  2. Neil Croft says:

    when i see the four letters KPMG you have to wonder a little 😉

  3. Casey Clarke says:

    More like “let me pat the back of the hand that feeds me”… Anyways.

  4. tonyr says:

    Why is it so hard for the so quick keyboard genius’ to understand that stakes paid to owners are, in fact, the profits GC makes from trading. It is, in effect, the dividends that accrue to shareholders in an organization; in this case the owners, trainers, breeders, jockeys and grooms being the beneficiaries. The corporate world would consider the quantum of returns paid to stakeholders relative to t/o and bottom line revenue pretty decent if you’re a shareholder; but maybe reckless from a sustainability perspective.
    If Mr Witz believes that Mr DeKlerk is somehow overly remunerated @ 100k pa for attending 4-5 board meetings, chairing the audit committee (3-4 times pa) and also serving on the racing committee, which meets at least 6 times per annum, let alone his fiduciary responsibilities and probity requirements to serve on a board in the gaming sector is over remunerated, then one can only guess where he fits in the echelons of business.

    1. Editor says:

      Hi Tony
      Welcome
      Plse add your surname
      Cheers

  5. Terrance Sunmer says:

    If Mrs de clerk is correct that in 2012 it was agreed that R 200 million rand will be ring-fenced in accorandance with Members Resolution, I cannot work out how the amount involved tallies only R242 million Rand.

    Assuming 5% which is extremely conservative, the interest pa earned on the R200 million without anyannual accrual is R10 million pa
    R2013 – R10 million
    R2014 – R10 million
    R2015- R10 million
    R2016 – R10 million
    R2017- R10 million
    R2018- R 10 million
    R2019- R10 million

    That’s R70 million at simple interest of 5% pa.

    My guess is that accrued interest earned from 2012 to date should be closer to R120 million making the ring fencex amount being worth closer to approx R320 million.

    Am I missing something by enquiring how the ring fenced amount can only be R242 million?

  6. Rod Mattheyse says:

    Mrs de Klerk, I am not sure if I should credit you or the editorial team for quoting me.

    It appears you have made more than a cursory glance at the numbers and picked out what you think are good results.

    I must admit I have not wasted too much time on the numbers but a few highlights:

    2008 Gross betting revenue 433m
    2019 Gross betting Revenue 314m

    If one applies time value of money then 2019 was at about 30% of where it should have been without factoring in any growth

    2008 stakes paid to all participants 142m
    2019 stakes paid to all participants 134 m

    If one applies time value of money stakes paid should have been closer to 300m

    So as a breeder whose products prices are directly related to stakes I would be spitting mad that the operators have managed to lose so much ground.

    Net assets of 800m made up mostly of revalued property, 100m ( according to Louis Goosen ) owed by Phumelela in business rescue and 200m ringfenced investments.

    A quick Back of cigarette box calculation will show gold circles net realizable assets to be closer to 200m than 800m.

  7. Devan govender says:

    Mrs DE klerk makes some valid points but that is only looking at the business from an insider perspective. I have a few questions for Mrs DE Klerk

    1. Have you been to a tote outlet owned by an agent of Gold Circle eg: tab mooi river
    2. Are you aware of the number of senior managers that took packages but were re-employed on contracts?
    3. How did Hollywood bets become the preferred bookmaker with naming rights when GC owns 70% of track and ball
    4. What salaries are the Executives earning?
    5. You mention the upgrade of the owners and trainers, Durban view room and Short head as well as lightening shot bar. From a business perspective greyville races about 80 times a year. The revamp of all 4 venues listed above could have costed anything between 4 – 7 million rand. These venues don’t even generate that income in 5 years. Would have made more sense to look at groups like Ocean basket or Spur or Olive and oil or Havana grill. These companies would pay rent. They would operate 7 days a week. They would bring more people to the racecourse and possibly increase revenue. However the thinking is always to protect friends.
    6. When staff were retrenched only lower end were looked at. The executives and management are still there. The same group that made all the mess ups but they still there.
    7. Has there been any transformation in the company at senior management level and at executive level?
    8. How can some people be directors, trainers, presenters and training centre managers
    9. Look at the pools now when there is only online betting, it’s terrible, do you think the turnover will grow? It was growing at 1.5% over the last 5 years ( tote turnover only) why because there was no emphasis on looking after the punter in the tote. Millions spent on course when you can’t even get 100 people to. A mid week meeting. Not everyone enjoys online. The vast majority like being in the betting shop but the management never saw this. They threw the punter out the door….. And now they. Blame COVID 19 for the mess, COVID 19 is here to. Teach people about the new way of life. The new way of life requires a new board and executives who will. Look after racing and not a select few.

    If you look at all the above it will paint a different picture

  8. Shanil Singh says:

    Still not clear whether sale of Clairwood was put to good use. However please advise percentage of race meetings saved due to inclement weather by racing on the poly. Would make interesting reading.

  9. PL.NEL says:

    These numbers are not encouraging. The Tote facility is outdated and e-betting is in dire need of upgrades for user friendliness; this bottomline income channel has seen a shift that a general glance would easily have revealed that modern day punters are on their phones having bets via internet. As pointed by Devan, business for racing has changed and its resources should be used to generate income rather than it being an empty showcase for the odd big race day. Adapt or die. Agree to focus on positive and build from there.

  10. Cecil Pienaar says:

    Move to Rescue Gold Circle -The Witness June 18
    ( Front page High Court story in Pmb )

    Club secretary David John Furness said in an affidavit –

    ” GC incurred losses of 32M + 33,5M more for June and July, cause of Covid. If the Clw money is accessed, it will be used to repay a portion of the HWB loan. Also to secure loans from Banks. If necessary the funds will also cover operational losses”

  11. waynefouche says:

    Dear Mrs. de Klerk there have been sufficient holes picked in your “positive” argument to make you feel somewhat embarrassed. I would like to add that your wonderful Polytrack is nothing but awful for a number of reasons which I have probably covered in previous posts.. This is not only my opinion – it is shared by many.

  12. Devan govender says:

    Does HWB mean Hollywood bets? If this is true then there is more to be concerned about with the leadership of Gold Circle. How can they borrow from Hollywood and not the banks? Something very fishy as to why they did not demand payment from Phumelela.

  13. Smith says:

    True transformation requires GC to transcend one or two window dressing initiatives. Out with the old and new neutral warm bodies required. U dont have to be an avid race goer for example to get a leadership post. This however seems to be the norm over the many years I can recall.

    Membership (paying) has not grown because there is nothing innovative in the last 10 years. Look at loyalty programmes in other sectors and their growth to the bottom line.

    We cant churn the same old faces horizontally/vertically from admin to commentator to board to trainer to presenter as an example.

    1. Editor says:

      Please add your name/ surname Smith

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