Is Steinhoff and therefore horse racing in trouble?

@bayern:


', along these lines, "too big to fail", '


Locally, Sidarel, Gants, numerous pyramids, mining houses, etc, and host of large corporates.

We also note that current capitalism (under the pretext of creating wealth and employment), has morphed into a gigantic organism that swalloows every oppostion / competition in its path to maintain a monopoly. That is even legalised / endorsed in most countries as they 'buy out' the politicians (eg US senators who are amongst the richest politicians in the world with multifarious financial interests and..... on our doorsteps, the ANC)!.

It is no coincidence that such orgabisations either own or control major media and advertising agencies. In South Africa, even our community newspapers are (surprisingly) being investigated for anti-competitive operations (doubt anything will come off it..... money talks!).


We inside a conundrum willy nilly and have no power (besides prayers!) to get out of it!

Power of positive thinking. I'm positive that this is a F*** Up of monumental proportions. What happens to P shares if the Steinhoff crowd liquidate? (td)(td):S

Gleason's article has thrown a cat among the pigeons but the problem is not insoluble. Steinhoff is just too big. It owns over 50% of JD, and there is also the connection with KAP which is also massive and van Niekerk's baby PG Bison The market still has faith and believes Jooste can even re-structure advantageously. He may be difficult to work FOR (not WITH) but he has surrounded himself with a board of highly respected business people and his financial advisor is world class. Jooste and van Niekerk have probably ring-fenced their racing interests which are bigger than most realise and there are many hundreds in the industry dependent on them and with people like Rupert, Slack and Koster etc in your corner, they still bat with considerable confidence.
However, I do have to sympathise with those who are bothered about the extent of the involvement and control in racing.

Here are a few facts from the 2012 annual financial statements for Steinhoff International which you can access on their website. The company made profits of R500bn in the year to June 2012. They upped the dividend from 65c a share to 80c a share. They made major investments that year in JD Group , PSG and KAP. There is a fair amount of debt but mostly longer term and a significant amount of pref share funding. The balance sheet is complicated because there are a lot of inter- company loans, but the debt burden is well within normal limits for a company of this size and financial strength. The shares and listed debt are widely held and the consensus view on the outlook for the enterprise is positive. While they are exposed to trading conditions in Europe which as we all know are tough, I for one would be surprised if their headline earnings are not up for 2013.
The disclosed direct and indirect shareholding of Mr Jooste is some 67 million shares, currently valued at about R 1.6 bn minus whatever gearing he has against this. His disclosed earnings were R35m for the year.
I have no particular interest or insight into Steinhoff other than that available publicly to any investor, but it appears to me that it's much ado about nothing.
We should be much more concerned about getting tote turnover up than worrying about Steinhoff and mr Jooste 's finances.

A separate issue is whether it is a good thing or not for the racing industry that some individuals have such dominant positions in the game.

I'm not convinced that any one person can be "bad" for the game. Since I've been involved in racing, I've seen lots of people come in and play a big game. Some come and go and others are in for life. In Jooste's case, if he decided to turn it up tomorrow, he has diversified his interests quite widely so that other than a few trainers who may be overexposed, for the rest it would be absorbed the way Podlas was.

As for shares, if they sold, someone would buy. I like to speculate as much as the next guy but I think he pays his bills, and while thats happening he can and should do what he likes. At his level you are trying to find champions like National Emlem, Mother Russia and Variety Club, or even better, find and races horses like Rebel King and co that become stallions. That's the real game.

Many people think that racing would be so much easier if they just had some money. When I was breeding, I was always pissed at just not having enough money to buy the mare I really wanted or not having enough money to use the proven stallion I preferred. But having money just puts you into another bracket against people who have just as much or more. They guys who spend millions may find it harder to be successful there than the blokes who spend 100K, or the blokes who spend 40K. At least you're pretty anonymous when you fail at the 40k mark.