In response to market factors, the TBA / BSA has undergone some fairly radical changes over the past few years. We caught up with Gary Grant ahead of this year’s National Yearling Sales.
In order to draw a clear distinction between the responsibility of breed affairs and their sales arm, June 2016 saw the TBA setting up a Bloodstock South Africa sales board made up of Council members Rennie Price (Chairman), Lee Scribante and Mark Greene and a management team comprising Gary Grant, Chris Haynes and Michael Holmes to take over the running of the sales arm.
“Chris and I are both Chartered Accountants and have been in business together for nearly 25 years, mostly through Equine Group. Michael has a BCom in marketing, he runs Michael Holmes Bloodstock and prior to that, he was with Chris Smith Bloodstock. It’s a good fit in terms of a management team and between the three of us we have nearly 80 years’ experience in the industry,” he says with satisfaction.
“Chris assumes responsibility for marketing and liaison with vendors and buyers. Mike stages the event, Chris directs the communications with vendors and buyers and I look after the financial side of the business, so that’s pretty much how we operate.”
With a dramatic rationalisation, the team has pulled the business sharply back into focus and swing the balance sheet from a R6 million loss in the 2016 financial year to a R2 million profit for 2017. “It’s imperative that Bloodstock SA makes a profit because that’s where the TBA’s funding comes from and that in turn allows them to make contributions to the industry.”
In addition to turning BSA around and making a profit, we are also putting money back in breeders pockets with reduced levies and commissions and reduced entries and acceptance fees.
“It’s important to us to look after our vendors – without them we don’t have a business,” he says pointedly. “We’re trying hard to help them in terms of where they place horses but more importantly, get them paid on time.”
He confirms that the days of waiting for ever are over. “80% is being paid at 30 days and by 60 days, we’re up to 90-95%.” Significantly, they haven’t had one write-off so far and have collected every cent.
The strategy is paying dividends. “The number of of horses we sold last year was more than the year before. Nationals was oversubscribed, the KZN sale is oversubscribed and we’ve got 260 entries for the mare sale which is about a quarter more than last year. If we’re getting support from vendors, I believe we must be doing something right.”
“We’re not by any means the finished article, but we’re making strides and believe we’re improving with each sale.”
While that covers vendors, they have not forgotten about buyers. “I think our sales complex compares favourably with many complexes around the world – certainly the ones I’ve been to – and I think our sales ground is of equal, if not better standards – but we’ve done some refurbishment and revamping. We are going for a fresher, more modern appearance and have received a lot of compliments on how it’s looking.”
“We’ve opened up the arena to give it more of a flow and we now have tables where buyers can sit at a table and relax and don’t have to feel like you’re sitting in a movie theatre in a row of chairs. From a buyer’s perspective, the yard too, should offer a good viewing experience.”
“We’ve changed the caterers and built a deck, so you can escape the sale and have a bite and glass of wine. There’s a good coffee station and we’ve upgraded the restaurants, including the Enchanted Garden which was popular last year, and it’s perfect to escape to if you are in the mood for something simple but tasty after a couple of hours of looking.”
“In the last few years, we’ve had a divided industry and I think the sales haven’t been as much fun as they used to be. It’s our intention to try and get everybody back under one roof and enjoy the camaraderie that goes with the sales. We want to focus on getting people to reconnect and talk and enjoy themselves and enjoy the sale. It’s not just business – racing is many people’s pleasure and leisure and we shouldn’t lose sight of that.”
They have also revived the relationship with Emperor’s Palace as a title sponsor and Gary says, “It’s a good fit and one that we’re very pleased to be able to re-establish.”
The sale offers 526 lots spread over three sessions from Tuesday, 24 – Thursday, 26 April and the gavel will be wielded by the capable hands of Steve Davis, Andrew Miller and Graeme Hawkins, supported by a new-look bid spotting team.
“With the long weekend coming up, we’ve tried to finish a little earlier on Thursday and not sell on the weekend so that people can be at home with their families. At the end of the day, it is business and we try to operate during business hours, which is consistent with how the rest of the world does things.”
In a break with tradition, the sale no longer pairs with Champions Day. “Last year we followed, believing the sale and race day were related, but actually they’re not. As soon as you go into early May, you start clashing with the international fixtures and it curtails certain internationals attending our sale, so we’ve gone back to the April slot. The timing is good for attendance by international and local buyers.”
“There are a few people coming from Hong Kong and a few agents from the UK, so we’re pretty pleased with the international interest so far. There are a couple of bigger agents and a few faces we’ve not seen before, so we’re looking forward to having them. We’ve had very good interest in terms of credit applications, more so than previous years, which we take as a good sign.”
What’s On Offer
“The National Yearling Sale is our best sale of the year and I think the catalogue speaks for itself. The depth in stallions is good and we’ve got a wonderful range of 59 vendors.”
One of the big changes is splitting the catalogue into two sections. “For want of a better expression, we have a session 1 comprising lots 1 – 231,” explains Gary. “These were selected by panel based on a combination of pedigree and conformation, so they’re really high quality individuals and as far as their page is concerned and in theory you should be able to buy blind as a lot of the homework has been done for you.”
He acknowledges there has been a certain amount of resistance to the fact that the minimum bid is R100k for this portion. “It’s not radical and is a trend that’s consistent with sales around the world. The median for this sale last year was R175k and more than half the horses sold for more. These are the best on offer and I don’t think a vendor would be willing to part company with them for less than R100k.”
“The session 2 portion also has quality individuals, although their pedigree pages might be a little lighter. Overall, I think we’ve got a great selection and think there are yearlings for the full buying bench. No matter what your budget, there should be something for everyone.”
BSA offer bonuses for selected Gr1’s and Gr2’s and have implemented a series of maiden juvenile bonuses. “We offered a maiden juvenile bonus of R40k for 2017 sales graduates which we are bumping up to R50k for 2018 and they have been very well received. It’s quite a nice injection for those owners and nice for them to get cash back early. If you look at the price range of horses that qualified, many have more than paid back their purchase price already, so I think it’s working well. I think we’re seeing bigger juvenile fields and hopefully the stakes bonus is part of the reason for that. If we can help new buyers have quick return, they may look at buying a classic horse a little further down the line.”
There are no sales races. “The only sale that has a sales race attached is the KZN sale and that’s because it’s a KZN Breeders initiative,” he confirms.
“I think the top end will be strong. Last year we had more money than horses at the top end of the market and I think breeders took note of that, which has helped form a strong catalogue.”
“It’s going to be difficult to compare because of the split catalogue, but if you asked for my dream result, it would be an increase in the median and clearance rate. I’d like to get the median up because that’s a barometer for the breeders as a whole – if you could get a median of R200k, you’re starting to have a chance of making some money.”
Secondly, the clearance rate is one of the key factors – we want to sell the horses. If we could achieve a 90% clearance rate I’d be happy. It’s a brittle market, so it’s probably a bit unrealistic, but if I’m shooting high, that’s where I’d be aiming. Things often start off poorly, but a lot of business gets done after the sale. I think our breeders are pretty beleaguered, so for us, we’d really like to get the horses sold.”
“Sentiment is a lot more positive, so hopefully people are not so intent on sitting on their hands with a wait and see approach. I think a lot of people kept their powder dry for Nationals because there is such a range and because it is a selected sale. I’d say we’re cautiously optimistic.”