Tsogo Sun Gaming's focus during lockdown has primarily been to eliminate operating costs.
Tsogo Sun Gaming has announced the appointment of Annelize Hoyer as its new CFO with effect from 1 August.
Annelize had over 10 years of casino experience and is well placed to play a vital role in the business improvement projects.
About her appointment, Annelize says:
“There are many challenges that await me in my new role as CFO during these difficult times, but we are confident that the measures that have been, and are still to be implemented, will provide a long-term reduction in our cost base, without limiting future performance.”
Her appointment came as Tsogo Sun Gaming announced its financial results for the year ended 31 March 2020.
“The focus during the lockdown has been primarily to eliminate variable operating costs as quickly as possible, reduce fixed costs and cancel non-essential and uncommitted capital expenditure in order to restrict the increase in net debt during the period the businesses is prevented from trading,” says Annelize.
The company reported solid results, despite the negative impact of Covid-19. The highlights include:
- Income increased 1 percent to R11.7 billion
- Negative impact of Covid-19 on revenue was approximately 3 percent to R0.4 billion
- Ebitdar decreased by 1 percent to R4 billion
- Ebitda increased 3 percent to R4 billion
- Adjusted earnings down by 14 percent to R1.4 billion due to higher interest cost
- Adjusted HEPS down by 14 percent to 134,5 cents
However, this is the first time in the past decade that no dividend was declared, to preserve cash.
According to the statement, lockdown has continued to cause devastation of the business, as a result of not being able to trade and with no certainty yet of when trading can recommence. The business lost an estimated R2 billion in revenue, and debt increased to R12 billion since year end.
Lenders have accordingly agreed to waiver the September 2020 covenant measurement period and to provide liquidity, by rolling up interest of R0.75 billion which will accrue until the 2021 year end, repayable within three years.
Despite these setbacks, the group said in the statement that it is confident it will benefit from many initiatives to recover profitability faster when given the opportunity to operate again. This will include focus on a lower cost structure with scrutiny of all costs across the group being intensified. “The casino business in particular will be more cost-efficient post the pandemic.”
Tsogo Sun Gaming CEO Chris du Toit believes the group must step up efforts to benefit from the accessibility to smart phones in the market for better communication, seamless interaction for customers and growth. “We are also in an advanced stage of entering the online better industry which is a separate segment of the market.”
He adds that, with regards to future growth, it will be a natural progression for casinos to offer products online, and if done responsibly on licensee level, can protect the substantial investment and jobs created by casinos.
The group’s bingo division continues to invest its excess cash nationally on expansions and improvements of its business concept, which will increase its contribution to the group in the long term.
The Limited Payout Machines division also continues its strong growth curve.