Payout jackpot for Phumelela investors

Phumelela Gaming & Leisure hiked its interim dividend payout 25% to 42c per share on a solid performance from its betting operations in the six months to end January.

This is good news for shareholders who have seen the Phumelela share price decline by nearly 30% in the last six months. Shares were up 1.79% to R14.25 following the release of interim results on Wednesday.

Headline earnings increased 23% to R83m, but normalised headline earnings, after stripping out the cost of one-off voluntary retrenchments, surged 52% to R102.5m.

On a per share basis — factoring in a 33% hike in shares in issue after a fund-raising exercise in 2017 — normalised headline earnings came in 12% up at 101c per share.

CEO Rian du Plessis said that the synergistic relationship between Phumelela’s fixedodds business Betting World and joint venture partner Supabets was gaining significant traction. “Supabets, with an entrepreneurial culture, is expanding its unique retail footprint in partnership with Betting World. We have established joint ventures equally owned by Betting World and Supabets and are expanding the Supabets megastore retail footprint using Betting World licences.”

He said Supabets’s sports and numbers offering was being integrated into Betting World retail outlets and a new Betting World website. This would include the wider Supabets sports betting offering, an “inplay” betting offering and a customer loyalty programme.

Du Plessis said Supabets was reintroducing betting on horse racing into its retail and online offering by using Betting World’s odds management and software. He stressed these initiatives had been achieved without stretching the balance sheet.

Phumelela has also undertaken a franchise initiative by offering Betting World franchises in provinces where new betting licences are being issued to local previously disadvantaged individuals.

Du Plessis said Phumelela concluded its first franchise agreement 18 months ago in the North West with Omphe Tshiamo Investments. The group initially acquired a 5% shareholding and provided R20m of funding for the first 10 retail betting outlets.

Du Plessis said that subsequently Phumelela agreed to increase its shareholding to 35% and to provide a further R20m funding for the roll-out of additional retail outlets.

SUPABETS, WITH AN ENTREPRENEURIAL CULTURE, IS EXPANDING ITS UNIQUE RETAIL FOOTPRINT