Wednesday 11 December 2019

Monday Outlook: Trade at the sales continues to grow

Impressive returns point to a welcome recovery in the middle market

Chancol, with Paul Carberry up, jumps the last on his way to winning at Punchestown yesterday
Chancol, with Paul Carberry up, jumps the last on his way to winning at Punchestown yesterday

Richard Forristal

It is probably advisable to retain a healthy degree of scepticism with regard to the economy's recovery.

Those in the know about these things stress that we remain at the mercy of an unstable Eurozone, and it seems that both the national and Euro economies are currently in threat of deflation. When you factor in the coalition's seemingly precarious position, there is still a sense of volatility.

The government pledged considerable financial multi-annual support for racing in the recent budget, so racing needs the status quo to remain more than most, notwithstanding another delay in the legislative business of bringing online betting into the tax net.

This increased revenue underscored the welcome swelling of the sport's government-funded coffers, but it seems as elusive as ever, with 2015 the latest landing place for that frequently kicked can.

It is in this context that we must view last week's returns at Tattersalls National Hunt sale. In short, they were stratospheric.

For a raft of reasons, the days of using racecourse attendances or on-course betting turnover as meaningful barometers of where the game is at are no more.

The number of horses in training and new and active owners reflect the reality more faithfully, so it will be interesting to see if Horse Racing Ireland's annual industry statistics highlight any meaningful growth in those sectors in the new year.

Trade at the sales is also a pertinent indicator, and bloodstock figures had shown a distinct recovery when HRI's six-month report was published in July.

The year-on-year tally at that stage was up 42pc. Sales companies had to slash days and streamline their catalogues when the downturn hit, but the sector was enjoying a steady upward turn.

Clearance

That trend has continued since. At Goffs Land Rover Sale, turnover was up 50pc, the average price was up 45pc and there was a clearance rate of 92pc. Tellingly, the median figure, which is deemed to more accurately reflect the overall level of activity if the top lots threaten to distort the average, was up 57pc.

At Tattersalls' subsequent Derby Sale, a market that specialises in the same three- and four-year-old untried National Hunt prospects, 110 horses, or one third of the lots, generated sale prices of €50,000 or more.

Clearance came in at 89pc, turnover was up 29pc and the average was up 18pc to a second best ever figure of €43,279. The median was a record €32,500.

It was a similar story at both sales houses' flagship yearling Flat sales in the autumn, and then Tattersalls November National Hunt sale rolled round last week, a six-day offering comprising one day of yearlings, four days of foals and a slightly less commercially relevant closing offering of breeding stock.

It was on the first five days that investor sentiment was really going to be tested, as this was an opportunity for the pin-hookers who had their pockets lined at the two big store horse sales in June to go again with feeling if the feeling was there to go again.

Those traders had been rewarded for continuing to invest in the foal and yearling markets through the downturn when the scope for a worthwhile return on their yield was negligible or non-existent.

They weathered that storm, and last week showed that they have come through it with a renewed appetite. The catalogue of 1,492 lots constituted an increase of 17 on 2013, helping the aggregate figure tally at €13.6m, up 26pc.

Yet the average still grew 13pc to €13,922, and the median of €11,000 was reportedly the highest recorded there for the last 12 years.

There was a 75pc clearance rate, and you have to go back to the heady days of 2007 to find similar returns.

Now, all this must be considered in the knowledge that sales figures cannot be trusted at face value, with buy-backs and ghost-bidders an accepted reality of the ring.

At the same time, bearing in mind that a NH sale at Tatts just a few years ago returned a 36pc clearance rate, there is no doubt that business is booming.

More importantly, the massive clearance rates and median figures suggest that the bottom and middle of the market are now as strong as the top.

Tarla - in foal to Shantou - changed hands for €170,000, but that wasn't a record and there was none for the foals or yearlings, either. That is critical.

There were more horses offered at the sale than had been the case since 2008, yet the median was bigger than ever.

The middle market is clearly enjoying a rebound, and the clearance rate suggests that most of those who were eager to sell, did.

With the 2014 foal crop growing for a second consecutive year to this point by 5.5pc to 7,440, that augurs well for breeders, as long as that figure doesn't ever reinflate to the unsustainable levels of 2007, when the foal crop hit 12,633. Of course, a high percentage of all these sales are destined for export, which in itself is no bad thing.

However, if we see tangible evidence of an improvement in the number of horses in training and, indeed, a cessation of the haemorrhaging of licence-holders, the trickle-down effect of such resurgent sales will be felt throughout the industry. Europe better hold firm.

Nicholls' Caid denies battling Johns Spirit

Sam Twiston-Davies rode a fine stalking race on 10/1 shot Caid Du Berlais to collar the defending Paddy Power Gold Cup hero Johns Spirit in the shadow of the post at Cheltenham on Saturday.

In doing so, Twiston-Davies (below) was completing a double for Paul Nicholls, having had to show more aggression than finesse in getting Sam Winner home in the long-distance handicap chase.

The 22-year-old has a massive campaign ahead after taking over from Daryl Jacob, whose tenure as Ruby Walsh's successor lasted one season. How he copes when expectations are cranked up will be fascinating, but his measured turn on Caid Du Berlais augurs well.

The five-year-old Caid Du Berlais had run just three times and won once over fences, having failed to land a telling blow when trying to concede two pounds to Road To Riches in the Galway Plate. With Road To Riches since sluicing up in the Grade One at Down Royal, it is beginning to look as though it was a pretty decent renewal of the Plate. Charles Byrnes' Shanpallas tired up the hill after running well for a long way on ground that was deeper than ideal, while Noel Fehily and Tom Scudamore also bagged doubles.

The most impressive winner was arguably David Pipe's Scudamore-ridden Kings Palace, which trounced a field of winners on its fencing bow in the three-mile novices' chase. He is a precocious six-year-old that halved in the betting to as low as 8/1 market leader for the RSA Chase .

Saturday date for Fenton's hearing

Philip Fenton is set to appear before the Turf Club's referrals committee on Saturday. The Carrick-on-Suir trainer has a serious case to answer after his recent criminal conviction for possession of unlicensed animal remedies, including the performance-enhancing anabolic steroid Nitrotain.

It emerged yesterday that John Hughes, the former Department of Agriculture vet who pleaded guilty to similar charges last year and was found to have imported 250kg of Nitrotain over a 10-year-period, has been banned for life from Irish race tracks by the Turf Club.

Enright back with vengeance at Cork

Philip Enright missed a number of winners during a two-week spell on the sidelines with a back injury but he got back in the groove on Who Let De Dogsout (9/2) in yesterday's beginners' chase at Cork.

Enright's boss Robert Tyner has his string in mean form right now, with Enright second to Black Hercules aboard the stable's A Hardy Nailor on his comeback ride in the maiden hurdle. There was a fortunate success in the two-mile handicap hurdle for the David O'Brien-trained Is Herself About - ridden by John Cullen - which took full advantage of the final-flight fall of Katie O'Farrell's mount Snapchat.

Tweet of the weekend

Mick Fitzgerald (@mickfitz)

Very sad day with the passing of a true gentleman of our sport Dessie Hughes. He was just a lovely person to be around. RIP

- Former leading jockey Mick Fitzgerald sums up the sentiment toward Dessie Hughes following the sad death of one of Irish racing's true legends yesterday.

Numbers Game

1 Number of Irish-trained winners in England over the weekend. There was no joy for any of the 14 raiders over three days at Cheltenham, though Willie Mullins' three runners were all placed, with Daring Carlotta a staying-on third in Saturday's bumper, just behind Stuart Crawford's runner-up Montana Belle. The honours went to Tony Martin, who scored with Heathfield, his only runner at Uttoxeter on Saturday. The easy-to-back 5/2 joint-favourite knuckled down well in the handicap chase under Denis O'Regan.

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