PHUMELELA GAMING & LEISURE LIMITED - Trading update and voluntary trading statement for the six months ended 31 January 2019

Trading update and voluntary trading statement for the six months ended 31 January 2019

Phumelela Gaming and Leisure Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1997/016610/06)
Share Code: PHM ISIN: ZAE000039269

Trading update and voluntary trading statement for the six months ended 31 January 2019

Trading update

Phumelela Gaming and Leisure Limited’s (“Group”) annual results narrative for the twelve months
ended 31 July 2018, reflected on the South African economic environment that continued to
deteriorate, and several negative factors were cited that made trading conditions very difficult. As a
consumer-facing business with a large retail footprint, pressure on discretionary spending in the
economy directly affects us. In addition, we must absorb the full financial cost of the VAT increase
effected last year.

Trading conditions remained challenging during the period ended 31 January 2019, for our local tote
and fixed odds operations. December was a particularly poor month for the gaming industry, both in
South Africa and abroad. Consequently, Betting World and Supabets profits were negatively
impacted. Whilst cost control remains tight, betting turnovers are not keeping up with inflation on the
expenses line and in fact declined in nominal terms.

Our international media rights operations and PGI on the Isle of Man returned excellent results for the
period. Supaworld, a JV between Supabets and Betting World, is making progress. Interbet has
performed well and in line with management expectations. We furthermore continue to invest in
reshaping the quality of the betting experience for our customers as we upgrade branches, grow the
digital/on-line offering, and customer base. The management team are resolute and excited in right
sizing the Group for the changing commercial realities. With this will come improved operating
leverage.

Phumelela bears an onerous burden in administering the sport of thoroughbred horseracing and
continues to face challenges on several fronts. But the Group is convinced that it is best positioned to
manage racing and defend the interests of all who make their living from this industry. For the industry
to survive, we all need to cooperate and contribute proportionately on a level playing field.
Furthermore, it is high time that we had regulatory and licensing predictability and consistency in the
industry.

Given the trading pressures the Group faced for the period in South Africa, the initiative to cut costs,
and a decline in profitability, the Board will give consideration to revising the dividend policy. The
Group remains well capitalised.

Voluntary trading statement

Shareholders are advised that the Group is in the process of finalising its 2019 interim financial results
for the period ended 31 January 2019, which are expected to be published on 29 March 2019.

Earnings per share (EPS) and headline earnings per share (HEPS) are expected to be within the
ranges reflected below:

                           Unaudited 6 months         Unaudited 6 months         Unaudited 6 months
                           31 January 2018            31 January 2019            31 January 2019
                           As reported                Expected range (%)         Expected (cents)
 EPS (cents)               83.17                      -14% to -19%               67.36 to 71.52
 HEPS (cents)              81.66                      -14% to -19%               66.14 to 70.22

The weighted average number of shares in issue during the period was 1.7% lower than in the same
period last year.
The estimated financial information contained in this announcement has not been audited, reviewed
or reported upon by the Group’s external auditors.

Turffontein

7 March 2019
Sponsor: Investec Bank

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