As with all sectors of trade and industry, the past year has not been an easy one for the horseracing industry or for that matter Gold Circle. It has required greater levels of commitment and professionalism in all sectors of the business in order to maintain the standards and traditions that we have all grown to expect and love. Some difficult and far reaching decisions have had to be made which have not always been without contention and discomfort to some, yet unquestionably necessary to ensure the survival and more importantly the sustained growth of the Company as the upturn in the economy materialises.
It is pleasing to report that the Board has been successful in cutting the Company’s operating costs by more than R14 million in the past year, before extraordinary items which includes severance costs, and at the same time it has been able to maintain stakes levels, when most jurisdictions throughout the world have had no alternative but to cut these substantially.
As indicated at the last AGM, one of the inherent flaws in the Gold Circle model is that no mechanism exists to enable stakes to track income derived from bets struck, thus leaving the Company seriously exposed in times of recession. The Board announced its intention to address this latent defect by introducing a stakes formula which, whilst subject to regular review, will initially have the affect that stakes will simply represent a percentage of the annual total of totalisator bets struck. In order to achieve this consideration is being given to eliminating the stakes paid on the fifth place. Marginal decreases of between 1 and 2,5 % for the other four places are under consideration and the exact detail will be the subject of a separate press release.
Additionally, the Board seeks to exploit all opportunities to derive income streams and alternative sources of revenue, which will be used as far as possible to mitigate the negative impact on the stakes paid by the Company. This, the Board believes will ensure the Company’s sustainability, as well as its commitment to pay competitive stakes.
Another positive development is that the Executive Directors are in the throes of putting the finishing touches to a strategic plan, initiated by the Board in March this year, which will see the creation of centres of excellence and a refocus on the primary aspects of our business, namely the sport of thoroughbred horseracing, and the reengineering of our wagering business. This plan includes the need to rethink our racing surfaces, the upgrading of our broadcasting to HD and the upgrading of our tote machines to accommodate new bet types. All of these initiatives are directed towards improving the racing experience, growing the wagering product and ensuring the continual wellbeing of the Company with the correct reserves and structures in place to embrace the challenges of the future. Naturally this will require extraordinary capital resources which will require us to relook at our asset utilisation in order to best realise the growth and opportunities available.
More recently, the media and the racing fraternity have been made aware of the tensions that have developed between certain Board members. Whilst it is not the intention of this communiqué to comment on this matter, it is important to record that, at a Board Meeting on 26 August 2010, a decision was taken by the Electoral Committee to appoint Mr. Kim Labuschagne and Mr. Ashraf Mohamed as Chairman and Vice Chairman respectively.
The Board would like to take this opportunity to thank both Messrs Adams and Bescoby for their considerable contribution as office bearers, having served Gold Circle unselfishly during exceptionally trying times. We express our thanks and appreciation to both for their past efforts and look forward to their continued support in the future.
The Board has appointed a subcommittee, made up of delegates from both regions, to address the issues surrounding regionalisation which have been a source of much discussion in both regions of late. This will undoubtedly be a lengthy review process and entail due consultation with the various stakeholders, which once finalised, will be for the long term betterment of racing in both racing jurisdictions.
As in the past, the Board assures all stakeholders, the racing public, Club members and the staff of Gold Circle that it is unequivocally committed to seeing the Company prosper and maximise its potential to be a meaningful racing and wagering force in the global racing arena. With the input and the continued support of all, this is not only possible but within arms reach.
ends
Gill Simpkins
Public Relations Manager
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