HORSERACING operator Gold Circle has achieved a record annual turnover of R1.823 billion for its 2006 financial year to 31 July, an improvement of 10.6% over 2005. The results are reported in the company's Annual Report which tables 2006 as a year of records.
“This result is well above reported inflation and is attributed to our growing network of upgraded betting facilities, together with increased demand for additional racing product from overseas,” states Chairman, Richard McElligott .
Among the many highlights in the company's performance is the news that Gold Circle 's monthly turnovers broke through the R200-million barrier for the first time in July. This follows record-breaking daily turnover of R47.7 million on flagship race day, the Vodacom Durban July.
The J&B Met, the Cape racing extravaganza, also generated a record daily turnover of R22.5 million. The Vodacom July and the J & B Met attracted over 100 000 people to the racecourses in aggregate.
A before tax operating profit of R12.7 million was posted for the financial year, representing a 74% increase over last year, after paying stakes of R115 million. This represents an impressive 13% improvement in prize money over the past year, and a compound increase of 13 % over the past three years.
Phumelela-Gold Enterprises, the partnership between Gold Circle and Phumelela Gaming and Leisure, which re-broadcasts South African and UK racing around the world, continued to grow profits in a competitive international environment. The losses incurred in 2005 due to start-up costs of the international venture translated into a profit of R9.8-million for Gold Circle in 2006. Betting on overseas racing product now generates about 25% of totalisator turnover.
Gold Circle engaged the services of top BEE rating company Empowerdex to conduct an evaluation of its BEE programmes, and was awarded “ AA ” status for outstanding compliance with the requirements of the Broad Based Black Economic Empowerment Act. The company was evaluated on components which included ownership, management, employment equity, skills development, procurement, corporate social responsibility and enterprise development.
Subsidiary Gold Circle KZN Slots, co-owned with BEE partner Mion Investments, was awarded a Slots Route Operator Licence. The roll out of limited payout machines in sites in KZN commences in December, creating an additional revenue stream.
The repositioning of Gold Circle 's business over the past 3 years has generated solid profitability and strong cash flows which now enables additional focus to be placed on racing and training facilities.
During October a tract of land was purchased on the Cape West Coast , 55 km from Milnerton, for R17,5 million for the development of a new racing and training centre. This will replace the current facilities at Milnerton, Philippi and Durbanville.
The proposal to sell Clairwood racecourse in its entirety has been shelved until there is greater clarity on the portion of land required to be expropriated for the new link road which is proposed to be operational by 2012. It will be re-evaluated based on the impact of the road. In the meantime, the training centre at Clairwood has been re-opened and additional stabling is to be constructed at Summerveld to cater for the current additional demand for stabling in KZN.
Gold Circle Managing Director Mr David Furness said that the company was expecting another good year ahead.