“The legal costs were incurred in answering complaints lodged with the Competition Commission and the Public Protector against Phumelela and Tellytrack’s reply to complaints lodged at certain gambling boards,” the gaming and leisure company said.
“Following the refusal by bookmakers to pay a fair value for the right to display international content in their betting shops, the international racing operators instructed Tellytrack to remove their content from Multichoice’s channel 239 and to make such content available only to bookmakers.”
According to [DATA PHM:Phumelela], as a result of this, the group’s customers who could not watch live international racing from home reduced their betting on international racing content.
However despite this, the South Africa-based group reported income growth of seven per cent in its local operations to 967 million rand for the year ending 31 July 2014 from 901 million rand for the same period in 2013.
Income from its international operations grew 99 per cent from 113 million rand in the 2013 financial year to 224 million rand in 2014.
“International operations in foreign currency are fundamentally important to the financial wellbeing of Phumelela and continue to enjoy real growth. The weakness of the South African rand further enhanced this contribution,” it said.
“Profit before tax from international operations increased by 47 per cent benefiting from the export of South African thoroughbred horseracing media rights together with the concomitant betting thereon and from the group’s Isle of Man joint operation.”
Group profit before income tax expense increased by 17 per cent to 129 million rand in 2014 from 111 million rand in 2013 and earnings per ordinary share was up 29 per cent to 146 cents from 113 cents.
(WATCH VIDEO: Phumelela FY13 HEPS up 26%)
Headline earnings per share rose 15 per cent to 132 cents in 2014 from 114 cents in 2013 and a final dividend of 60 cents was declared.
“The group’s international operations continue to grow. A proactive strategy to diversify and offer innovative betting opportunities internationally has become an essential component of the growth and financial success of Phumelela,” said the company.
“Under consideration are further initiatives that support the competitive appeal of South African thoroughbred horseracing, which has shown an encouraging renewal of interest, growth and on-course attendance.”
Phumelela also stated that it remains committed to achieving a more equitable contribution to the cost of funding the sport of South African horseracing between bookmakers and totalisator operators.