Leisure group Sun International on Tuesday reported a sharp increase in headline earnings per share to 252 cents for the half-year ending December 2004, from 153 cents in the previous comparative half-year.
The group attributed the improvement in earnings to continuing strong growth in casino revenues, improved operating margins and lower borrowing costs.
“Good growth in gaming revenues was experienced, whilst hotel and resort revenues remained under pressure particularly at the upper end of the market,” Sun International said in a statement.
Revenue for the half-year rose by 15% to R2,512-billion from R2,182-billion. Operating profit increased to R680-million from R620-million.
The group declared a dividend per share of 90 cents, up 100% from 45 cents previously.
Gaming revenue for the period was 19% ahead of the previous year, driven mainly by a 21% improvement in slot revenues, Sun International said.
“This growth can be attributed primarily to the continuing improvement in disposable income and consumer confidence,” Sun International said.
At Sun International’s resorts and hotel, room revenue of R313-million was in line with the previous half-year but after adjusting for the disposal of Mpekweni and Zimbali Lodge in March and July 2004 respectively, the comparable growth in rooms revenue was 5%.
Sun City achieved an overall occupancy of 77%, 4% ahead of the previous year.
In December 2004, the Sibaya development opened following the closure of Sugarmill.
The estimated capital cost at R733-million was R83-million higher than the original budget.
Turning to the outlook, Sun International said that the group anticipates strong growth in adjusted headline earnings per share for the full year to June 2005.
“The rate of growth in the second half is expected to be lower than that experienced in the first half of the year given the high level of earnings in the second half of last year and the impact of the additional shares in issue,” Sun International said in a statement. — I-Net Bridge