Cape Town - Phumelela Gaming & Leisure [JSE:PHM] announced on Friday that it achieved 7% growth in adjusted headline earnings and adjusted headline earnings per share (Heps) to respectively R106m and 141.48 cents for the year to July 31 2015.
However, earnings per share fell 27% to 105.98c, while Heps was down 11% to 117.06c.
The performance of the horseracing administrator, licensed totalisator operator and bookmaker was impacted by investment write-offs and abnormally high legal costs, with collective negative impact of more than R32m, equivalent to 32% of the group's pre-tax income of R99m.
It was bolstered by growing volumes in areas unrelated to its traditional horseracing business, which remains loss-making.
Group total net betting income locally rose 13% to R841m. Net betting income from local tote operations rose 7% to R679m and by 42% to R162m from fixed odds operations. Net betting income from sports other than horseracing grew by 25% to R260m, on numbers by 31% to R64m and on horseracing by 6% to R517m.
Other operating income from local totalisator operations rose 19% to R219m. This included profit share on limited payout machines, Gambling Board levies, royalties, commingling fees and miscellaneous income.
Strong growth from soccer tote bets, fixed odds betting on numbers and sports other than horseracing assisted in a 178% reduction in the loss from local operations to a profit of R10m.
Profit before tax in the fixed-odds business rose 153% to R21mn. Bookmaking subsidiary Betting World has grown its retail footprint by 58% in two years and now has 67 outlets.
Net income from international operations fell 13% to R206m and profit from international operations before equity-accounted profits dropped 11% to R66m.
International operations contributed 92% of group profit before tax of R121m, excluding non-recurring items.
With effect from November 1 2014, a strategic shareholding was acquired in Interbet, the only online business-to-business betting exchange in South Africa and a leading online bookmaker with a total of R1bn inbets placed during the financial year from 3.5 million bets at an average bet value of R285.
CEO Rian du Plessis said that overall trading performance was "acceptable", and characterised the year as “a period of continued innovation and diversification”.
Phumelela shares sank 6.25% to R18:00 on the JSE on Friday.