HERE is an extract from a SENS announcement from Phumelela this morning:
“The Group is faced with circumstances that are beyond its control and which have had a material adverse effect on revenue since the start of lockdown. Measures have been implemented to reduce costs where possible, however many costs remain fixed.
“Phumelela’s share of betting levies, worth R75m p.a., that were withdrawn in April 2019 have not yet been reinstated and urgent negotiations continue with representatives of the Gauteng Government to do so.Stakeholders are referred to the going concern statement disclosed in note 36 of the 2019 annual report.
“The going concern status is assessed continually in the light of prevailing conditions. At this stage, the Group cannot reliably quantify the financial effect for this financial year or the next financial yearcaused by COVID-19 and governments’ consequent shut-down of most economic activity.
“Should the lockdown be lifted at the end of April and racing be permitted to resume, possibly behind closed doors, then the horse racing industry is planning to recommence racing on 1 May. Racing fixtures have been rescheduled accordingly. The National Horse-Racing Authority is coordinating representations on behalf of all the key players in horse racing to the National Coronavirus Command Council.
“If racing is not given authority to resume in early May, together with the opening of betting-shops, it is likely that a rationalisation of the entire horse racing industry and associated value chain in South Africa will occur with consequent significant loss of jobs and reduced tax collections.
“It is note-worthy that independent studies have calculated that some 40000 jobs are dependent on the horse-racing industry in South Africa. Shareholders are reminded that Phumelela is under cautionary and are advised to continue to exercise caution when dealing in the Company’s securities.”