Hotel and leisure group Sun International will continue to expand its operations internationally and seek to maintain the competitive advantage it has established in its core businesses.
Chairman Buddy Hawton said in the group’s annual report that gaming legislation, which restricts the granting of additional gaming licenses in South Africa, “is serving as the primary catalyst for the group to seek new opportunities internationally”.
Locally, however, the group will submit a bid for the license for the Wild Coast Sun in Eastern Cape after the provincial gambling and betting board initiated a bidding process for the issue of a casino license there. The process is due to be concluded in June this year. The Wild Coast Sun’s license expires at the end of August next year.
Hawton said the economic outlook remained positive for the group’s financial year ahead, “despite the higher levels of inflation and interest rates, which are likely to temper the growth in consumer spending”. Real growth in disposable income was nevertheless anticipated, as was continued growth in inbound tourism.
The group expected good growth in earnings before interest tax, depreciation and amortization (Ebitda) from its hotels, resorts and casinos in the coming year, he said.
Recently releasing a business update for the quarter to September last year, Sun International said it had received satisfactory results, with overall revenue up 13% on the previous year. Casino and room revenues grew 14% and 9% respectively from the comparable period in the previous year.
For its full year to June last year, revenue at USD 1 billion was 17% up on the previous year and Ebitda at USD 380 million was 27%. A final dividend of 215c per share was declared, bringing the total dividend per share for the year to 400c, 38% above last year.
Internationally, the group said in its recent business update that construction of the Mostazal Casino project near Santiago, Chile, was progressing well. The casino, retail and entertainment components are scheduled to be completed in the last quarter of this year’s calendar year and the hotel at the end of the first quarter of next year.
In Nigeria, Sun International had taken operational responsibility for the Federal Palace Hotel on Victoria Island, Lagos, and planning for the refurbishment was well advanced, it said.
Sun International CE David Coutts-Trotter said in the annual report that the group had certain “conditionally authorized” commitments of USD 336 million, including the USD 200 million Chile project and the USD 120 million Nigerian project.
Locally, capital expenditure of USD 190 million was committed for the completion of the GrandWest expansion, the Golden Valley Lodge, the Sun City Main Hotel refurbishment and a multilevel parkade at Carnival City, among other upgrades.
“Our group has agreed on a goal-driven strategy which aims to exploit our competitive advantages in terms of innovation in product development, customer management, focused expansion and our continuing investment in our people to deliver consistently good results.“
“Our roadmap towards 2010 and beyond is defined by our determination to be a formidable competitor in the international and domestic marketplaces,“ Coutts-Trotter concluded.