“We have to believe they will find solutions,
and the smart people have already
anticipated the turnaround.”
Summerhill Stud CEOEvery generation likes to claim it’s known the best of times and the worst of times. Those that grew up in the shadow of two world wars and the greatest depression in recorded history, will rightfully lay claim to that title in the 20th century. Certainly, they’re entitled as far as the worst of times is concerned, yet there are strong parallels in what the present generation have had to endure, in particular the sufferings of the last decade in the Middle East, and the present Great Recession.
But if you’re sitting in little old Mooi River, your instincts may be different. Life, and especially in what we do, gets you up in the mornings with a spring in your step. We live in one of the world’s most beautiful places, we work among some of its nicest and most talented people, and we do so with the greatest creature the good Lord ever created.
Besides, there are undoubtedly signs that things are on the move again in the thoroughbred economy, not only locally, but in the racing jurisdictions of the world as well. The British, American and French sales bounced back significantly in the fall of 2011, while Australia has been coming back for two years now, and the Cape Premier Yearling Sale posted an average beyond R400,000, despite the liability of an extra 60 entries. America created nearly a quarter of a million extra jobs during the last quarter, and South Africa did even better relatively, with 180,000. The Rand is firming, and the big companies of the world are thriving, in contrast with the performances of many of their governments.
While it obviously doesn’t apply to every sector, and it is not quite as apparent in the small business sector yet, many multi-nationals are posting record profits, despite their governments, and it seems that that might be a hallmark of the immediate future. Naysayers keep pointing to the bubble in China which they’re sure is on the brink of bursting, and a Europe that is incapable of helping itself. The reality is the Chinese cannot afford for their bubble to burst, and Europe cannot afford a failed Greece. We have to believe they will find solutions, and the smart people have already anticipated the turnaround.
Of more relevance on the home front, the grapevine is delivering encouraging news on the performance of our racing operators. While you can’t put your hand on your heart that all of these things are 100% accurate, the trend is uplifting and the sources are generally reliable. Gold Circle looks to have posted a profit of R10 million in the first five months of operation (before the windfall of the J&B Met), and while it seems the Cape-based arm of their business continues to struggle in the delivery of positives, on the 1st February, it entered a brave new world.
There are too many smart, enterprising people involved in Cape racing these days for it not to succeed, and with the right strategies and a fresh team to guide them, it’s in everybody’s vital interests that they should succeed, which they will. No doubt, they are relieved to be masters of their own destinies now, and we’ve faith in those whose hands will steer the ship.
While information on the performance of public companies is as difficult to access as it is to prize the fruit from an oyster, word is that the international operations of Phumelela have more than recovered the ground they lost when the British decided, after we’d shown them the way, that they were going to disseminate their own racing images. The rumour mill says Phumelela has already exceeded R100 million in its international turnovers, and has well surpassed what they were turning when they held the monopoly on the British rights. This is a tribute to the enterprise of that division, and you’d expect that if in their local operations, Gold Circle is performing as it is said to be, Phumelela must be doing much the same. Both must be accumulating healthy reserves of cash and that’s got to be the best news since baked bread.
All this bodes well for the future of the industry, and especially in promising some relief on the prize money front. If Gold Circle, now limited to its local operations only, is able to maintain its present path, owners of horses (and those associated with them) under their jurisdiction can look forward to a bonanza in the next year to 18 months.