Tsogo Sun final results March 2019
Income for the year increased 18% to R11.619 billion (2018: R9.842 billion), operating profit rose 13% to R3.129 billion (2018: R2.765 billion), profit attributable to equity holders of the company decreased to R1.562 billion (2018: R1.971 billion), while headline earnings per share from continuing operations lowered to 157.1 cents per share (2018: 164.9 cents per share).
Subsequent to year end, the board of directors has declared a final gross cash dividend from income reserves in respect of the year ended 31 March 2019 of 56 cents per share.
Given the continued weak state of the South African economy trading is expected to remain under pressure. Growth will depend on how the economy performs going forward and the level of policy certainty that the South African government is able to achieve. Nevertheless, the group remains highly cash generative and is confident in achieving attractive returns from the growth strategy once the macro-economic environment improves.
The group continues to implement a variety of projects including:
- the unbundling and separate listing of the hotel division which will provide shareholders with greater investment choice and the ability to manage their exposure to gaming and hotel operations respectively. It is also envisaged that the separate listing will 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;
- the potential 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 provincial authorities allow such a process. The Western Cape Provincial Treasury published a draft Bill and Regulations intended to permit the relocation of outlying casinos to within the Metropole, however, progress remains slow and the final result uncertain; and
- the ongoing cost saving initiatives will continue and further cost savings will be considered during the year.
The Galaxy and Vukani businesses are expected to continue to deliver strong growth, ahead of inflation.