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COVID-19 Impact on JSE Listings requirements:

COVID-19 Impact on JSE Listings requirements


Phumelela Gaming & Leisure Limited

(Registration number 1997/016610/06)

(Incorporated in the Republic of South Africa)

Share Code: PHM ISIN: ZAE000039269

(“Phumelela” or “the Company” or “the Group”)


COVID-19 Impact on JSE Listings requirements


In respect of the letter to issuers by the JSE on 10 March 2020 concerning the impact of COVID-19 on JSE

Listings Requirements and the statement issued on SENS in this regard by the Group on 20 March 2020,

the following updated information is pertinent as to the impacts of COVID-19 and the responses thereto.


The first statement to shareholders in respect of the impact of COVID-19 was issued prior to the nationwide

lockdown which came into effect at midnight, 26 March 2020. The guidelines and restrictions on public

gatherings were therefore superseded by a strict prohibition on movement and assembly. Consequently,

the South African horse racing industry has by law been unable to stage race meetings from the date of the

lockdown. All of Phumelela’s betting shops are closed with no revenues being earned


The cessation of horse racing has meant that there is no South African product to export internationally.

Training centres remain operational under strict access control and sanitization protocols. Horses are being

kept in prime condition in order to return to racing as soon as permission is granted to do so. Sports betting

has been negatively affected by sporting fixtures such as soccer being cancelled. Online betting is open,

but revenue is insufficient to compensate for this large void and betting opportunities have in any event

been sharply curtailed.


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withdrawn in April 2019 have not yet been reinstated and urgent negotiations continue with representatives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 year caused 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 40 000 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.


Turffontein

20 April 2020

Paints a very bleak picture indeed

Dropped 20% today so far. Available for R1.10. And bidders at R1
Looks like it will break the 1 buck barrier very soon.
Penny stocks but still wouldn’t touch.

What does"rationalisation" mean in that context in simple terms?

.....down sizing by reducing staff for starters....selling off non core assets....maybe Supabets for a buck....:whistle:

it touched 97 cents at one stage this afternoon, not sure if this is the first time its ever been under R1 since many years ago when it started.

....the only thing to save them now is to restart local racing and get that 3% back..... they will have to make one hell of a case to local govt and paint a very clear picture that 3% of f@ckall is zero :blink: .....cant see anyone at Phum worth their salt to negotiate at this level.....:dry:

If the Government is using money we don't have for social grants etc then I wonder in which alternative world Gambling of any kind( Including the LOTTO - Standing in a line to play this surely increases "risk") should be allowed - I realize Racing, Casinos, Bookmakers staff(I'm certain more bookmaker staff are unemployed because soccer/sport is down than Racing) need income but in a society where hunger and starvation might become a reality if these lock-down measures increase then allowing an unnecessary vice to exist is insane. I have no problem with horses being trained to keep them fit and healthy but allowing gambling of any kind in these uncertain times is just plain wrong.

.....dont think that Phum will be using that angle....they are now trying to save the whole industry ....they stripped off key assets, paid investors very generous dividends, management big salaries and bonus's and then put local racing in the back of the queue .....now aint that ironic....:huh:

Muhtiman wrote: .....dont think that Phum will be using that angle....they are now trying to save the whole industry ....they stripped off key assets, paid investors very generous dividends, management big salaries and bonus's and then put local racing in the back of the queue .....now aint that ironic....:huh:

Phum and Jooste have raped racing!!!

Muhtiman wrote: .....dont think that Phum will be using that angle....they are now trying to save the whole industry ....they stripped off key assets, paid investors very generous dividends, management big salaries and bonus's and then put local racing in the back of the queue .....now aint that ironic....:huh:

If racing is allowed - will the bottom end tellers- who surely won't be allowed to work as totes and bookmaker shops opening would be insane - be paid ? I wonder WHO will get paid first if racing resumes!

.....and sadly all will only remember that Covid killed it....:S