The wisdom of those who had insisted on the ring-fencing of half of the proceeds of the sale of Clairwood Park eight years ago, has ensured that horseracing in KZN should survive the latest and greatest challenges facing the sport globally.
On a South African racing landscape littered with victims of battle, Gold Circle appear to be the one bright light capable of navigating their way out of the current situation and chartering into calmer waters. That could be achieved under a unified front, or a on a go-it-alone basis.The future remains fluid in the current time.
Gold Circle Chairman Neil Butcher writes in a recent letter to Members that without any revenue streams for the last two months and negative investment results, the company is expected to post losses of around R70 million for the financial year ending 31 July 2020.
Neil Butcher
This excludes possible impairments to the Company’s investment in Track and Ball and the debt owed by Phumelela in respect of Gold Circle’s share of international revenues.
Members have been informed of a Special General Meeting on 20 June at 17h00 where they are urged to remove the restrictions currently in place in the Memorandum of Incorporation and allow the Board the freedom to manage the business through these turbulent times and the unchartered waters that lie ahead for the ultimate benefit of the company and horseracing in KZN.
The alternative would see Gold Circle collapse and follow Phumelela’s course of action.
Training Centres have remained fully operational during the lockdown period but all other cost centres, including salaries, have been dramatically reduced to protect cash flows.
Champions Season has been postponed and the Vodacom Durban July will be run behind closed doors, as it is apparent that large public gatherings will not be allowed for the foreseeable future.
The 100th running of the Gold Cup is included on the racing calendar for the end of August and hopefully, will be the only racing event where some form of attendance will be allowed.
Bearing in mind the streamlining of Gold Circle’s operations, the 2021 financial year is projected to result in a loss of some R35 million. The potential removal of the Bookmaker’s 3% tax has not been factored into the 2021 projections, as the Company will challenge any attempt by the Provincial Government to do so.
The Board expects the company to return to profitability during the 2022 financial year.
The Board is continuing its efforts in negotiating a national strategy with all the participants in the horseracing industry. This has become urgent as the economic recovery in a post Covid-19 era is likely to be very slow.
Rationalisation on a national level has become a survival imperative for the sport of horse racing and consequently for breeding.
As a first step, Gold Circle has offered to take management responsibilities for the Tellytrack partnership and of Phumelela’s international division to ensure continuity of the broadcasting of local and international horse racing in South Africa and the sale of South Africa’s racing product overseas.
Nevertheless, the Board and Management are actively planning a stand-alone policy for Gold Circle should national unification not be realisable. This would ensure the survival of horseracing in KZN.
