Magic Millions 2015
Magic Millions each year bears the task of “setting the scene,” for yearling sales in Australia and its 2015 performance was a success. The Combined sale aggregate was up 20% compared to last year, with the average up 22% (all sessions).
However, the best indicator of the performance of a sale is usually the median up 8.3% from $120,000 last year to $130,000 in Book 1 of 2015. This is a very positive outcome but modest compared to the increase in average (15.6%) for Book 1. The fact that 20 horses sold for more than $500,000 compared to 6 last year partly explains the strong average. On the ground at the sale the difference I noted was the mid-range say $100,000 – $300,000 last year was extremely competitive with the majority of the catalogue more suitable to trainers and syndicators buying speculatively to sell to their client base. I found 2015 to be strong again in this mid-range but perhaps expanding into the higher end where the product on offer improved overall.
The Stallions
First season foals from an exceptional group of Australian freshman sires seemed more popular than their proven, established counterparts. Buyers were prepared to take some risk by diving into yearlings by Sepoy, Foxwedge, So You Think, Master of Design, and Smart Missile.
Notable results follow.
| Sire | No. Sold | Average $ | Advertised Service fee (Excl. GST) | Multiple of service fee |
|---|---|---|---|---|
| Fastnet Rock | 18 | $372,917 | $200,000 | 186.46% |
| Foxwedge | 22 | $157,455 | $30,000 | 524.85% |
| I am Invincible | 13 | $203,846 | $10,000 | 2038.46% |
| More Than Ready | 26 | $167,692 | $110,000 | 152.45% |
| Redoute’s Choice | 19 | $366,579 | $125,500 | 293.26% |
| Sepoy | 26 | $286,346 | $60,000 | 477.24% |
| Smart Missile | 39 | $179,394 | $20,000 | 896.97% |
| Snitzel | 43 | $243,488 | $30,000 | 811.63% |
| So You Think | 16 | $234,688 | $60,000 | 391.15% |
The Buyers
It was very pleasing to see the Australian breeding product so well received by international buyers especially from Asia and the US. The relative $AUD helps together with continuing effort by Aushorse in conjunction with the sales companies to attract a truly global buying bench. These International players are very astute and the product and pedigree needs to satisfy their high standards – and vendors at the high end were rewarded for producing the right product. International spend was up by 17% on last year and represented 19% of the book aggregate. The gross of the whole sale exceeded $100m. Expectations are that a similar, very competitive international group of buyers will descend on Newmarket in Sydney in April. We could see some truly amazing yearling results at Inglis Easter due to the international presence.
Top 10 Things Overheard And Trending At Magic Millions 2015:
1. ”Outstanding types.”
2. “I hope that Steve Davis is at the rostrum when my horse is in the ring.”
3. “Gee it gets light early in the morning.”
4. “Moo Moo’s is so yesterday but let’s go anyway.”
5. “Mill Park.”
6. “Francesca.”
7. “You should set a modest reserve and let the market decide.”
8. “Any Damage?”
9. “There are opportunities at this sale to get overs.”
10. “Better get this yearling to the breakers for next years $ 10m race day.”
Winners are grinners – GST and horse exports
It is always very satisfying to achieve successful tax outcomes on behalf of clients and the horse industry. On 10th December 2014, Aushorse received the news it wanted from the Australian Taxation Office (ATO). A concerted team effort, involving the sales companies, IRT and the committee of Aushorse and TBA, worked together to carefully document the facts and ultimately successfully lobby for a change to the ATO’S interpretation of GST and horse exports.
The GST and horse exports issue has been around since the introduction of GST in 2000. This is the first time clarity will be achieved through a welcome change to the wording of GST Ruling (GSTR 2002/6) and Law Administration Practice Statement (PSLA 2006/16). The ATO will reinstate that breaking in and barrier trials prior to export will not deny GST-free export status.
Put simply, the AT0 will now accept that breaking in and Barrier trialling are necessary to prepare a horse for export. The “GST –win” for the horse industry was achieved after careful lobbying efforts of State and Federal ministers and communication with the ATO just in time for the Magic Millions. A favourable result means that Australia can continue to attract overseas investment in horses on a level playing field.
A job well done!
by Adam Tims
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