Gaming and hospitality behemoth Sun International’s headline earnings per share fell to 223 cents per share for the six months to December 2016, from 344 cents in the comparable year and a sluggish economy, foreign exchange hits and settlement charges saw a 35% drop in full-year-profit. The group grew revenue 31% to R7.7-billion, with the strong growth attributable to the inclusion of its Latin American Dreams SA and GPI Slots’ operations for the full period.
Sun International, which recently changed its financial year, also announced that its main focus in the immediate future would be to reduce debt and bed down the implementation and integration of recent acquisitions. In light of the difficult trading conditions and the need to complete the R4,2 billion Time Square project in Pretoria next month, the group had decided not to declare a dividend.
Group CEO Anthony Leeming (pictured), who took the reins over from predecessor Graeme Stephens in February, explained: "We've made good progress with some key initiatives during the past six months. In particular, the country's second largest casino, Time Square, will open on time and in line with its R4.2-billion budget in April. The Arena will open in September this year and the hotel and conference centre in April 2018. Time Square will be key to our portfolio and to our growth in South Africa."
Sun International was the pioneer of gaming in southern Africa, having brought casinos to this part of the world in the late 1970s. It now boasts a portfolio of assets that includes 18 resorts, hotels and casinos in Africa and it is also the largest gaming company in Latin America, with operations in Chile, Peru, Colombia and Panama.
Looking ahead Leeming said: "We expect gaming revenue in South Africa to remain under pressure given economic conditions. However, we do anticipate hotel occupancy to grow for the remainder of the year, boosted by the refurbished conference and entertainment centre at Sun City, where forward bookings for conferences are well up on last year. We are also looking forward to the opening of the casino at Time Square, which we expect will have a positive impact on the group's performance going forward."
"In Latin America, the Chilean economy, although still experiencing low GDP growth, is showing signs of improvement with an increase in the copper price and low inflation and interest rates. Although trading in the early part of 2017 has remained subdued, it is expected to pick up towards the end of the year."
Leeming has been with the group for 17 years, having joined as group financial manager in 1999. He held various group finance roles prior to his appointment as CFO in March 2013.
Sun International was deliberating over a request from a minority shareholder in its Latin American business Sun Dreams to be listed on the New York or Santiago stock exchanges. The shareholder is a private investment fund with a 20% stake in Sun Dreams, which was created with the merger of Sun International's Latin American division and Chile's Dreams.
