Tsogo Sun profits increase

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Tsogo Sun Holdings (TSH) on Monday reported a 40% rise in diluted headline earnings per share to 69.9 cents for the six months ended September 2012 from50.1 cents a year ago.

Income was 4.8% higher at R4.8 billion‚ while adjusted earnings grew 36% to R746 million.

An interim dividend of 24 cents per share was declared‚ up 20% on a year ago.

The company said the first half of the financial year reflected a continued recovery in trading conditions‚ as experienced in the second six months of the prior year. Year on year growth was achieved in both casino and hotel revenues‚ assisted by a particularly strong September trading month for both divisions‚ and the consolidation of the Formula 1 hotel business.

Looking ahead‚ Tsogo Sun said the continued improvement in trading performance across the group's operations during the first half of the year remains encouraging. However‚ the sustainability is uncertain due to the inconsistent monthly results in the period‚ with September 2012 reflecting particularly stronger than expected trading levels.

Nevertheless‚ the group remains highly cash generative and has significant opportunities to invest in its growth strategy.

The group is proceeding with a R200 million expansion of the Emnotweni casino and plans are at an advanced stage for the redevelopment of the Silverstar casino‚ where the group expects to invest in new facilities‚ including cinemas‚ restaurants‚ concert and entertainment areas‚ conferencing facilities‚ and an expanded casino offering to better service the West Rand market.

The group is also exploring a variety of projects‚ including the redevelopment of the Gold Reef City Theme Park‚ the expansion of the Suncoast casino and related entertainment facilities‚ as well as a number of potential acquisitions which are at various stages.

The opportunity to bid for the relocation of one of the smaller casinos in the Western Cape to the Cape Metropole remains an opportunity for the group should the various legislative amendments allow this process to be effected. - I-Net Bridge

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