JOHANNESBURG – Listed gaming and leisure group Tsogo Sun said on Thursday that its hotel operation registered a loss of R59 million in the year to March from a R660m profit in the comparative period, ahead of the unbundling of the business next month.
The group said in March that its board had approved the separate listing of its hotel interests and that the listing would be on June 12. Tsogo Sun chief executive Jacques Booysen said the separate listing would provide shareholders with more detailed disclosure relating to the operations of the hotel division and allow for its valuation without discounting for gaming-related regulatory risks.
“Over the last five decades, Tsogo Sun has played an important role in shaping the landscape of hotels, gaming and entertainment. In this, its fiftieth year, the group’s anniversary coincides with the listing of Tsogo Sun Hotels on the JSE. This represents an exciting new era for all concerned, from shareholders to employees,” Booysen said.
The move will see Tsogo’s hotel interests housed under one holding company, being Tsogo Sun Hotels (THL), while Tsogo Sun will comprise only of the gaming division, being casino and alternative gaming operations and change its name to Tsogo Sun Gaming.
THL has a portfolio of 110 hotels, of which 98 are internally managed.
Asief Mohamed, the chief investment officer of Aeon Asset Management, said the primary reason for the unbundling was an attempt to create value for shareholders after splitting the hotels and gambling interests.
“A number of investors both locally and globally do not want to invest in gaming and related stocks.
“This will enable these investors to invest in a hotel related entity,” Mohamed said.
The group’s total income rose 18 percent in the year to R11.6 billion and operating profit increased 13 percent to R3.1bn.
Booysen said the company’s growth would depend on how the economy performed and the level of policy certainty that the South African government was able to achieve.
Tsogo Sun shares closed 0.60 percent lower on the JSE yesterday at R20.03.