With receivership and equine influenza marring its past, Magic Millions has had a fair bit to overcome to be a global juggernaut.
The Magic Millions thoroughbred auction house started trading in 1980. Then in 1986, the first Magic Millions race was run. “We pioneered the concept that was a sale with a closed race attached,” says managing director, David Chester. “By that I mean every horse sold at Magic Millions is eligible for a Magic Millions race series.”
With global auction houses now based around the same offering, and a recovery from receivership in the late 80s, the road to success has had its ups and downs, but Chester says the relatively young company is confident. “I think one of the reasons why Magic Millions has gone from strength to strength is the fact that we have this successful race series and that we have the sales at the Gold Coast, which is one of the great holiday destinations of the world and people just love coming here. And our ownership is now in the hands of three of Australia’s most exciting businessmen.” He’s talking about Gerry Harvey, Robert Ferguson, and John Singleton, who came on board to help the company out of receivership. “They added a lot of prestige to the sales, and they were all passionate breeders in their own right, in some form or another.”
The trio leave the day-to-day running to Chester and his team of 30, and it seems it has worked well for all concerned. “The company has more than tripled profits since they came on board.”
The horse breeding industry is one that targets a wealthier clientele than many small or medium exporters, and Chester says all clients share a passion for horses. And although Chester says it’s the fourth largest industry in Australia, it didn’t take the Magic Millions team long to realise they needed to develop exports to expand the business and facilitate the interests of global buyers.
The key to export success, Chester says, is based on the success of the horses sold, with recent winners coming from the Magic Millions sales, both locally and internationally. With agents in the US and Europe, Magic Millions now has a presence in Iran, India, Korea, and it’s key market, South Africa.
While Australian buyers still make up the majority of purchasers, international sales contributed $40 to $50 million of the $250 million in sales in the 2006/07 period. Next year is set to be a different story, due to the devastating effects of the equine influenza (EI). Thanks to EI, Magic Millions hasn’t been able to have sales here, and overseas sales have been affected too, with countries like Hong Kong and Macau closing doors to Australian horses.
Chester explains that it has affected confidence locally (as overseas countries have already had EI and vaccinated against it), and worries that the way different states have handled the outbreak has not done a lot to prevent worry for overseas investors and sales groups.
Recovering from the disaster is key for Magic Millions’ recovery, so the next sales, usually held in January, have been pushed out until Easter. “It’s our best catalogue of yearlings,” Chester says, but unfortunately this won’t necessarily be good news for the business, as the horses might not fetch as much as they normally would. “It’s a buyer’s market.”
But Chester is confident they’ll bounce back, and says that he and his team will need to work hard to ensure the sale can be as successful as possible in a difficult situation. “But we’ll get there.”
