/ 19 March 2007

Gold Reef Resorts boosts year profit by 25%

South African gaming and leisure firm Gold Reef Resorts reported on Monday a 25% rise in annual headline earnings per share, in line with its own forecast thanks to a strong performance by its casinos.

Gold Reef said headline EPS in 2006 rose 24,8% to 127,4 cents, at the top end of its own forecast for a rise of 20 to 25%.

The company said a deal to give black investors a bigger chunk of the company would help create new business opportunities and possible acquisitions in South Africa and abroad ”underpinned positive prospects”.

Revenue rose to R1,5-billion and earnings before interest, tax, depreciation and amortisation rose 27,8% to R623,7-million.

Buoyant consumer confidence, driven in part by a booming black middle class, is spurring revenues at South Africa’s casino operators.

Gold Reef, which owns the popular Gold Reef City resort in Johannesburg, said earlier this month it had agreed a R640-million deal to give black investors a 25,1% stake in the company.

South Africa is pushing firms to meet quotas on black ownership and employment to redress the imbalances of apartheid. Casino companies have to sell a portion of their business to black investors to qualify for certain gambling licences.

Shares in Gold Reef closed at R23,75 on Friday. – Reuters