The following is an overview of unaudited interim results for Phumelela Gaming and Leisure - 6 months ending January 2009

Highlights:

* Despite the global economic slowdown, international operations continued to grow with revenue up 56% on the comparative period to R178,3 million.

Headline earnings from ongoing operations for the comparative period down 8% to R38 million (2008: R41,4 million). Diluted HEPS from ongoing operations down 7% to 50,15c per share (2008: 54,12c).

o Revenue from local operations slowed to R1,3 billion but showed a 3% increase on the comparative period while net betting income which is a factor of betting revenue increased by 3% on the comparative period to R273,1 million.
o Profit before tax from international operations increased by 30% in the comparative period to R14,3 million.
o Total operating expenses and overheads increased by 11% on the comparative period to R347,9 million (2008: R312,6 million).
o Total revenue increased by 7% on the comparative period to R1,4 billion (2008: R1,3 billion) generating a 5% increase in net betting income of R284,9 million (2008: R271,6 million).
o Dividend will be maintained at 25c per share.

"Our business remains solid despite the economic downturn," says Rian du Plessis, Group CEO of Phumelela Gaming and Leisure (PGE). "And while local revenues have shown a slowdown our international operation continues to fulfil on our expansion mandate."

Last year’s acquisition of a 20% indirect shareholding with Gold Circle in Mauritian stock exchange-listed totalisator ASL (Automatic Systems Limited) sees share profits for the first period at R0,6 million. Total international revenues grew by 56%.

"Our biggest opportunity remains international," says Du Plessis. "The South African horseracing tote market is worth about R4,7 billion while the global market is worth US$100 billion (about R990 billion)."

The slowing of local revenue growth to 3% is a result of the negative economic climate and cancellation of race meetings due to inclement weather. "We remain cautiously bullish about the local market despite the downturn in the economy," says Du Plessis. "Profit before tax on local operations decreased by 20% over the comparative period to R42,6 million exclusive of the sale of the Bloemfontein racecourse for R27,8 million in the comparative period."

Du Plessis says that in mitigation of the slowing of local revenues, the business will be looking at increasing marketing to the existing betting market while also focusing on growing its footprint among new and potential customers. Last FY the group invested more than R70 million in its domestic retail footprint, racecourses, stabling and new technology. "We are working hard to grow racing and tote betting in the local market through innovative products such as the Soccer 6 and other new betting types as well as a greater emphasis on marketing and communication, increasing our consumer reach," says Du Plessis. "We are working hard to improve our results despite the continuing economic challenges faced."

Phumelela’s share of profit from associated fixed odds business Betting World (Pty) Ltd increased by 101% on the comparative period to R2,6 million. In May 2008 Phumelela acquired an additional 2.5% equity interest in Betting World with its total equity in the business now at 42.5%.

Phumelela, which listed on the JSE’s Travel and Leisure sector in 2002, operates tote betting in seven of South Africa’s nine provinces and conducts horse racing in four. FY 2008 saw approximately 16% of the group’s profits come from international operations.

Through PGE, the Group:
o Owns a totalisator license in the Isle of Man and provides betting opportunities via its online totalisator operation to a worldwide customer base.
o Owns the exclusive worldwide (UK and Ireland excluded) broadcasting rights to 30 UK racecourses. The agreement securing the rights from Racing UK (RUK) continues to 28 February 2010 and is renewable under the same terms and conditions, provided certain criteria are met.
o Operates a television studio that broadcasts live horseracing audio, visual and data from South Africa, the UK and other international racecourses to betting shops and private subscribers worldwide.

BACKGROUND

Rian du Plessis, B. Acc: Qualified as a Chartered Accountant (South Africa) in 1985 and obtained a Higher Diploma in Tax Law from the University of the Witwatersrand in 1988. Rian spent eight years in investment banking, initially with FirstCorp Merchant Bank and thereafter with Rand Merchant Bank (RMB) where he became joint CEO of RMB’s Corporate Finance Division.

Rian joined the Comparex Group in 1997. In his capacity as Director:

Mergers & Acquisitions and International Finance, he was responsible for all of Comparex’s acquisitions as well as being Financial Director of the Group’s international business. He was appointed Chief Executive Officer of Comparex Holdings Limited in 2000. At the invitation of the board of directors of Comparex Holdings Limited and with effect from 1 November 2002, Rian led a team of European managers in a management buyout of the Group’s European businesses. Initially as CEO and later as Chairman, he managed the turnaround of Comparex in Europe within 19 months.

David Attenborough, MBA: Prior to joining Phumelela in September 2003, David managed the licensing and development division of British bookmaking chain Ladbrokes/Hilton for five years. He was later transferred to Africa, where he was responsible for the development of casinos and other gaming opportunities for the group. In 2001, he became Vice-President of Development for African Lakes Corporation, a UK-listed company specialising in IT connectivity and an ISP provider in 20 African countries.