SUN International, the country’s largest casino and
hotel company, yesterday reported a 15% rise in group
revenue to R5,1bn for the year to end-June.
The company also managed an 87% increase in adjusted
headline earnings to R435m, but adjusted headline
earnings a share were only 45% higher at R4,11.
Growth in earnings a share was diluted by an increase of
shares in issue, following the issue of shares for the
acquisition of Sun International minority interests last
August.
Gaming revenue for the period was 18% higher, with slot
and table revenues up 19% and 16% respectively.
Nedcor Securities analyst Sean Ashton said that the
group’s trading performance, particularly in gaming, was
good.
The growth in South African gaming revenues has been
spurred on by the continuing improvement in disposable
income and consumer confidence.
Sun International CEO Peter Bacon said yesterday that
outside of those two factors, the group had managed to
increase its penetration of markets such as Cape Town.
Since its December opening, the group’s Durban casino,
Sibaya, achieved gaming revenue 36% higher than that
achieved by Durban’s Sugarmill for the comparable
seven-month period.
“We have been able to increase our share of the Durban
market to 43% and the casino continues to grow,” Bacon
said.
He said the “star” casino operations were GrandWest,
which saw gaming revenue increase 19% to R1,2bn, and
Carnival City, with gaming revenues rising 22%.
Carnival City increased its marketing effort in the
year, and Bacon said the casino increased its share of
the prized Gauteng market.
Gaming revenues for the Gauteng market increased 14%.
After adjusting for the disposals of Mpekweni and
Zimbali Lodge, the group’s room revenue for the period
increased 4% to R623m.
Ashton said the strong rand had negatively affected
hotels in the upper end of the market, as guests chose
to downgrade.
Sun City had an overall occupancy of 76%, a rise of four
percentage points on the previous year.
The Table Bay’s occupancy levels fell three percentage
points to 63%, with the average room rate 2% up at
R1352.
Bacon said the fall in occupancy was the result of an
oversupply of four- and five-star rooms in Cape Town.
The group’s Zambian resort, The Livingstone, had room
occupancy of 62%, an improvement of nine percentage
points on the previous period.
African Harvest Fund analyst Mark Ansley said the
performance of the Zambian resort was surprising.
“It has been a loss-making operation for many years,
with the bad publicity surrounding the country’s
neighbour, Zimbabwe,” he said.
The group said its operations in Botswana, Namibia and
Swaziland were weaker than the previous year due to the
poorer economic conditions in those countries.
The group increased spending on the investigation of new
casino licence opportunities in the UK, Singapore as
well as in Africa to R25m, compared with R18m
previously.
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