Sun International's UK expansion barred, but profit warms up
August 30, 2007
By AUDREY D’ANGELO
Cape Town - Sun International had again achieved higher profit in the year to June, the hotel company said yesterday.
However, it had to abandon its plans for expansion to the UK and Russia because of decisions by their governments preventing the development of large casino complexes.
Group revenue rose 17 percent to R6.9 billion and adjusted headline earnings a share were 33 percent higher than last year at R7.19.
The final dividend is R2.15 a share, bringing the total for the year to R4, 38 percent more than last year.
Chief executive David Coutts-Trotter said the economic outlook for South Africa remained positive in the year ahead despite the higher levels of inflation and interest rates. Admitting that these were "likely to temper growth in consumer spending", he said: "Real growth is nevertheless anticipated, as is continued growth in inbound tourism."
He believed the growth in international tourism that had continued in the winter months was not yet due to the plans to host the 2010 soccer World Cup, but more to an increasing interest in the variety of attractions South Africa had to offer.
There was also an increase in business travellers, including those attending conventions.
Gaming revenue improved by 18 percent to R5.4 billion, with revenue from slot machines rising by 20 percent and from tables by 8 percent.
This was due partly to a full year's trading from the Windmill casino in Bloemfontein, the opening of Golden Valley in Worcester in November, and strong contributions from Sibaya in KwaZulu-Natal, which achieved revenue of R684 million. The Meropa, Marula and Botswana casinos added to improved revenue.
Revenue from hotel rooms rose by 14 percent to R776 million and from food, beverage and other services to guests by 11 percent to R802 million. Coutts-Trotter said the rise was due to higher rates, increased occupancies and better yield management.
Overall group occupancy rose to 74 percent from 71 percent. The average room rate of R792 was 7 percent ahead of last year, "mainly due to good growth in the international individual tourism market".
Sun City achieved an occupancy rate of 79 percent, compared with 75 percent last year, with an average room rate of R1 048. The Table Bay Hotel in Cape Town achieved an occupancy rate of 72 percent, up from 70 percent. The average room rate of R1 558, a gain of 11 percent.
The largest proportion of guests from overseas were from the UK and US.
The GrandWest casino in Cape Town lifted revenue to R1.6 billion from R1.4 billion and operating profit to R594 million from R504 million, outstripping Sun City, which achieved revenue of R1.059 billion and operating profit of R89 million.
Sun International shares fell 0.13 percent to R149 yesterday. The travel and leisure sector rose 0.02 percent.
|
|
