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PAYOUT TO TSOGO SUN SHAREHOLDERS UP 12% PER SHARE

THE payout to shareholders of casino group Tsogo Sun came to 67c per share for the year to end-March, a 12% increase on the previous year.

Tsogo Sun reported on Wednesday it grew income by 8% to R12.3bn and after tax profit by 6% to R1.8bn.

Nearly 60% of the group’s revenue came from what it describes as “net gaming win” which grew 6% to R7.4bn.

Gold Reef City’s gambling income growth slowing to 5.5% due to a R640m refurbishment and expansion project which was completed in October was compensated for by strong growth in its coastal casinos.

In KwaZulu-Natal, gaming win growth of 7.1% was achieved at Suncoast Casino and Entertainment World, 8.8% at Blackrock Casino in Newcastle and 9.5% at Golden Horse Casino in Pietermaritzburg.

In the Western Cape, The Caledon Casino reported 10% growth, Garden Route Casino in Mossel Bay 18.2% and Mykonos Casino in Langebaan 6.7%.

Tsogo Sun’s fastest growing revenue stream was from hotel rooms, which grew 13% to R2.8bn, contributing 23% of total revenue.

Its South African hotels benefited from occupancy rates improving to 63.5% from the previous year’s 62.8% and average room rates increasing 7% to R1,018, CEO Marcel von Aulock said in the results statement.

Food and beverages revenue grew 12% to R1.4bn, contributing 11% of total revenue.

Its effective tax rate for the year increased to 30.4% from the prior year’s 28.8% due to a capital gains tax inclusion rate on deferred tax of R54m and non-deductible expenditure such as casino building depreciation, offset by foreign exchange losses on US dollar denominated loans.

The results statement listed numerous acquisitions Tsogo Sun has under way.

It is in the process of acquiring 20% of SunWest and Worcester Casino for R1.35bn from Sun International Limited and Grand Parade Investments.

Competition Tribunal hearings are scheduled for August for its proposed acquisition of a controlling stake in Hospitality Property Fund.

It is also buying Garden Court Umhlanga and the StayEasy Pietermaritzburg for R310m from Liberty.

“Given the weak state of the South African economy and many of the commodity focused countries in which the group operates, trading is expected to remain under pressure. However, the fourth quarter of the financial year was strong in both the gaming and particularly the SA hotel environment,” Von Aulock said.

Source: BDLive – Robert Laing