Cape Town - South African hotel, gaming and entertainment group, Tsogo Sun says it expects to complete the building of its 125 room Stay Easy hotel in Maputo in the current financial year for $16 million as it is buoyed by a 6 percent rise in profits for the year ended March.
The company says, on top of adding to its African footprint, it will also be on the prowl for international acquisitions in the year ahead
“The acquisition of additional hotel properties by International Hotel Properties Limited, which currently owns nine hotels in the United Kingdom, is anticipated in the future and the group may apply additional capital in this regard,” says the company.
The group’s total income for the period under review increased by 8 percent to R13 billion, driven largely by a 2 percent increase in its gaming business and an 11 percent surge in rooms revenue. The group grew its adjusted headline earnings per share by 6 percent in the period to 207.6 cents. Tsogo declared a total dividend of 104 cents, up 6 percent from the comparative period
The company suffered a R38 million forex loss in its offshore business. However this was offset by a strong 11 percent growth of its earnings before interest, income tax, depreciation, amortisation, property rentals, long-term incentives and exceptional items, which rose to R5 billion in the period
The company says cash generated from operations for the year improved by 9 percent compared to the previous period to R4.8 billion.
Net finance costs increased by 34 percent due to the increase in net debt, while taxation paid reduced by 5 percent-the group attributed this to refunds it has received from the South African Revenue Service in the period.
The group says it is well positioned to weather the weak economy and policy uncertainty from government in areas like visa regulation to gaming taxes.
“The group remains highly cash generative and is confident in achieving attractive returns from the growth strategy once the macro-economic environment improves,” the company says.
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