Tsogo Sun reports positive growth path - CNBC Africa

Tsogo Sun reports positive growth path


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The Palazzo Montecasino in Johannesburg is a part of the Tsogo Sun group. PHOTO: Palazzo Montecasino

The hotel, gaming and entertainment group reported that income was up nine per cent to 5.2 billion rand from 4.7 billion rand in the previous year.

Earnings Before Interest, Taxes, Depreciation, Amortization, and Restructuring or Rent Costs (Ebitdar) was also up nine per cent to 2 billion rand.

“The group has delivered a solid performance. Although the pace of growth slowed in the second quarter, the group is highly cash generative and excellent progress was made on our growth strategy with R1.3 billion invested into expanding and upgrading existing assets and acquiring other strategic interests during the period,” Tsogo Sun CEO Marcel von Aulock said in a statement.

Adjusted earnings for the group were up 20 per cent to 0.9 billion rand, and adjusted headline earnings per share were up 20 per cent to 81.3 cents.

[DATA TSH:Tsogo Sun] also declared an increased interim dividend of 29.0 cents per share which is up 21 per cent on the prior six months.

Industry occupancies improved 58.8 per cent from 57.7 per cent in the previous year.

Overall revenue for the South African hotel division increased 11 per cent on the prior period to R1.0 billion. This was assisted by the inclusion of 54 on Bath and Southern Sun Hyde Park.

The increase in average room rate is positively impacted by the inclusion of Southern Sun Ikoyi from July 2013 and the effect of the Rand weakness on the offshore portfolio.

In June 2013 the group acquired a 75.5 per cent stake in Ikoyi Hotels Limited in Lagos, Nigeria for 50.6 million dollars. Tsogo Sun hotels include the Sandton Sun, Suncoast Towers, Southern Sun resorts and Palazzo.

Overall revenue for the Gaming division increased 7 per cent to 4 billion rand, and Ebitdar improved 6 per cent to 1.6 billion rand.

Gaming win grew by 6 per cent for the six months ended 30 September 2013 over the prior period, with growth in slots win at 3 per cent and tables win growth at 14 per cent.

Among the provinces, the largest growth in provincial gaming win from the Eastern Cape, which grew 8.4 per cent for the six months ended 30 September 2013.

Mpumalanga recorded the second largest growth in provincial gaming win of 5.3 per cent, followed by the Western Cape at 5.1 per cent, Gauteng of 4.1 per cent and KwaZulu-Natal by 3.4 per cent.

Other Gaming division operations consisting of the Sandton Convention Centre, the StayEasy Century City hotel and head office costs reflected a net loss of 102 million rand.

 “The continued improvement in trading performance across the group’s operations during the period remains encouraging,” the group said.

“However, the ongoing sustainability of this growth is uncertain due to the inconsistent monthly results. Nevertheless, the group remains highly cash generative and continues to pursue significant opportunities to invest capital in its growth strategy.”