After acquiring Supabets, Phumelela said it net income rose to ZAR763.8 million in the first quarter of the year compared ZAR749.5 million in 2016.
According to its trading update, profit from operations lowered to R25.1 million (R33.2 million). Profit attributable to equity holders grew to R68.12 million (R65.0 million). Furthermore, headline earnings per share increased to 90.19 cents per share (87.21 cents per share).
Phumelela said the acquisition of 50% of Supabets opens an exciting new chapter for Phumelela and we have already identified opportunities for the extraction of synergistic benefits and growth with our partners. Supabets will contribute for the remaining five months of the financial year and is anticipated to be earnings per share accretive after allowing for a higher weighted average number of shares in issue. The circular to shareholders, dated 19 August 2016, provides granular detail on the pro forma financial effects in this regard.
Also with effect from 1 March 2017, the Group increased its shareholding in Interbet from 26% to 50%. The increased shareholding was funded by bank debt and is also expected to be earnings per share accretive.
The local tote operations are under pressure in a difficult economic climate but the fixed odds operation is leveraging positively off the Group’s investment in facilities and the popularity of the product offering. Cost savings and managerial efficiencies are being implemented.
International operations, comprising the export of live televisual South African horseracing, the import of live televisual international horse racing, and pari-mutuel betting through PGI on the Isle of Man, are doing well. Real growth in foreign currency income is anticipated for the full year.
The Group is targeting growth in earnings per share for the year, the extent of which will be dependent on foreign exchange movements.