Chairman’s Report

Chairman’s Introduction
As Xander Spies, Chairman of the Racehorse Owners Association (“the ROA”), it is my distinct privilege to present to you my first Chairman’s Report for the financial year ended 31 July 2024. While my report encompasses the financial year under review, it is also important to address broader issues impacting both our members and the horseracing industry at large.

Financial Overview
The annual report of the ROA is presented herewith, encompassing both the consolidated and separate financial statements (“AFS”) of the ROA and its subsidiary, the Randjesfontein Training Centre, for the financial year ended 31 July 2024. These meticulously prepared statements, provide a detailed and comprehensive insight into the financial health and performance of the ROA during this period. I extend my profound gratitude to the Financial Team for their tireless efforts and the exceptional precision they have brought to this vital component of our reporting.

The AFS reflect the financial standing of the group as of 31 July 2024, as well as the operational outcomes for the year concluded. The ROA experienced a financial deficit of R3.4 million in 2024, marking a significant contrast to the surplus of R1.97 million recorded in the prior year. This shift primarily arose from the cessation of several key revenue streams that had previously bolstered our financial position. Notably, revenue of R8.3 million from nominations and declaration fees was no longer collected following their transfer to 4Racing (Pty) Ltd effective 1 August 2023. Additionally, capital distributions from Phumelela Gaming and Leisure Ltd (In Business Rescue) amounted to R0.7 million in 2024, a considerable decline from R5.9 million received in the prior year. Moreover, the reversal of a bad debt provision totalling R1.8 million in 2023 did not recur in 2024, further impacting revenue.

Despite these challenges, the ROA demonstrated commendable fiscal discipline, effectively curbing expenses to mitigate the financial impact. Approximately R5 million in non-recurring costs that were incurred in 2023 were eliminated in 2024. Contributions to stakes were reduced by R0.6 million compared to the prior year. Furthermore, the significant accrual of R5.3 million for the ROA/4Racing Grooms’ Initiative in 2023 did not recur in 2024, thereby contributing to the overall reduction in expenses.

Unit Trust Investments continued to deliver robust performance, generating a market value gain of R2.8 million from 31 July 2023 to 31 July 2024. Additionally, total returns from unit trusts and cash investments amounted to R1.9 million, reflecting an increase of R0.4 million over the prior year. As of the financial year’s end, the ROA’s investment in unit trusts was valued at R40 million, while cash and cash equivalents stood at R10 million. Although this represents a reduction of R4.5 million in assets from 2023, the ROA’s liquidity position remains solid and indicative of sound financial stewardship.

Randjesfontein, a cornerstone of our strategic assets, is valued at R196 million on the balance sheet and continues to operate as a premier training facility. While its long-term future is under thorough evaluation, it is committed to serving the industry in the short to medium term. The Board’s unwavering focus on prudent financial management is evident in these results, underscoring our dedication to identifying and pursuing additional avenues for financial sustainability while maintaining strict oversight of expenditures.

Enhancing the Ownership Experience
The ROA’s mission is to promote, enhance, and grow the sport of horseracing, with a laser focus on delivering value to our members. Horseracing thrives on the passion and dedication of its owners. Recognizing this, the ROA is committed to providing an unparalleled ownership experience. Ensuring that owners are kept informed and their voices heard through regular updates and proactive engagement is paramount. Educating both current and potential owners about the intricacies of horse ownership and the racing industry remains a priority. Advocating on behalf of owners with operators, authorities, and other stakeholders ensures equitable treatment and recognition. Collaborating with partners to deliver exceptional raceday experiences further strengthens the ownership experience.

Examples of this commitment include the “behind-the-scenes” stable visit breakfasts as well as the raceday experience tours drawing great turnouts on each occasion and showcasing the value that the ROA consistently brings to its members. Events like these not only foster community but also highlight the immense potential for growth and engagement within the sport, solidifying the ROA’s role as a pillar of support for its members.

Stakes Maximization
Stakes are the lifeblood of the industry, directly impacting owners, trainers, and breeders. The ROA remains resolute in its efforts to work with operators to ensure adequate stakes levels across all races. Advocating for additional stakes incentives, not only for maiden races, but for every single type of race possible, ensures widespread support and encouragement across the racing spectrum.

Contributing meaningfully to stakes, with R4 million allocated in 2023, R3,4 million in 2024 and further incentives planned for the current racing calendar, demonstrates our commitment to stakeholders.

Marketing and Membership Growth
The ROA has taken significant steps to modernize its marketing and member engagement strategies. The development of a robust social media strategy, driven by Board members, aims to enhance the ROA’s digital presence and storytelling efforts. We aim to implement this strategy in the second quarter of 2025. Member demographics as of July 2024 reflect positive growth trends, particularly in KwaZulu-Natal and Internationally. The introduction of bonus races continues to drive membership growth.

Industry Partnerships
Engagements with 4Racing exemplify the ROA’s ambitious and forward-thinking approach to the future of horseracing. These collaborative efforts represent a transformative partnership with immense potential, signalling a unified vision to redefine the sport’s trajectory. While much of what is being planned remains confidential, members can rest assured that these developments aim to enhance the on-course experience and elevate horseracing’s appeal to a broader audience.

The alignment of the ROA and 4Racing is already paving the way for exciting opportunities that promise to bring innovation, sustainability, and inclusivity to the forefront. Continued support of the joint Grooms’ Initiative, with R6,5 million committed over five to six years provides medical, funeral, and retirement benefits to this vital segment of the industry and highlights our dedication. Ongoing efforts to promote the welfare and well-being of all stakeholders remain central to our values and the ROA remains steadfast in ensuring that every aspect of this partnership reflects its commitment to its members and the broader racing community. As these plans unfold, the collaboration between 4Racing and the ROA is poised to introduce unparalleled advancements to the industry. Stay tuned—there is much more to come.

Industry Recovery and Future Prospects
The horseracing industry is showing promising signs of recovery and growth, with several notable successes fuelling optimism for the future. The resounding success of Summer Cup Day stands as a testament to the revitalized enthusiasm within the community, while the remarkable renovations at Turffontein have elevated the standards of our racing venues, making them more inviting and modern. Furthermore, incremental stakes increases are being implemented, providing much-needed encouragement and support to owners, trainers, and breeders alike. While there remains considerable work ahead to achieve our long-term goals, these advancements reflect a positive trajectory. With continued effort and collaboration, we are steadily progressing toward a brighter future for horseracing.

Closing Remarks
I would like to take this opportunity to express my heartfelt gratitude to the individuals who have contributed to the success and resilience of the ROA over the past year. First and foremost, I extend my deepest thanks to the Board of Directors—Natalie Turner, Garth Towell, Jackie Sparke, Greg Kotzen, and Jessica Motaung. Their dedication, strategic insight, and unwavering commitment to the ROA have been nothing short of exemplary. Each of them has brought unique strengths to the table, and together, they have helped steer our organization through both challenges and triumphs.

A special acknowledgment must also go to our CEO, Natalie Turner, whose leadership and tireless efforts have been instrumental in keeping the ROA on a path of progress and innovation. Natalie, along with the Board, has consistently gone above and beyond to ensure that the interests of our members remain at the forefront of every decision. Jackie Sparke deserves particular recognition for her meticulous work on the financial statements, which have provided the foundation for our strategic planning.

I would also like to extend my gratitude to the staff of the ROA. Their hard work and dedication have been the backbone of our operations. Whether handling the day-to-day administrative tasks or ensuring that every event and initiative runs smoothly, their unwavering commitment has been vital to our achievements and an example of what can be accomplished through teamwork and a shared passion for our sport.

To our members, thank you for your continued support and engagement. Your enthusiasm and dedication are what drive us to do better every day. Together, with this exceptional team and community, I am confident that the ROA will continue to thrive, innovate, and safeguard the timeless charm of horseracing while building a brighter future for the sport.

Sincerely,

Xander Spies
Chairman
The Racehorse Owners Association