Johannesburg - Grand Parade Investments Ltd., a South African slots machine operator, surged the most in two weeks a day after it said its Burger King Worldwide Inc. franchise sold almost double its forecast in its opening weeks.
The stock jumped as much as 8.7 percent, the most on an intraday basis since August 15, and traded 3.9 percent higher at 4.30 rand by 4:37 p.m. in Johannesburg.
About 1.4 million shares traded, or double the three-month daily average.
“In general the market is positive on the upside for Burger King,” Leandro Gastaldi, a portfolio manager at Cape Town-based Blue Quadrant Capital Management, which owns the stock, said by phone.
“If you add all the company’s components, you’d probably get a valuation north of where we are at the moment.”
Cape Town-based Grand Parade’s Burger King store, the first in South Africa, had sales of 4.9 million rand ($474,838) in the seven weeks it traded before the end of the company’s fiscal year on June 30, it said in a statement yesterday.
In a deal with Sasol Ltd., the largest maker of gasoline from coal, takeaway outlets will be opened at gas stations next year, according to Grand Parade.
The company said Aug. 30 it ended negotiations to buy a stake in Peermont Global Ltd, operator of casinos in South Africa’s economic hub of Gauteng.
The province’s casino market might be nearing saturation, according to Gastaldi.
Sun International Ltd., a South African casino and hotel operator, applied to the Gauteng Gambling Board to relocate a 2,000-slots casino at a cost of 3 billion rand to Menlyn, east of the capital Pretoria, the company said in a statement on July 9.
The increased number of slots in the province could “hit” the Emperors Palace, owned by Peermont, and Sun’s Carnival City, Gastaldi said.
“We are relieved the deal didn’t go through,” Gastaldi said. - Bloomberg News