Strict cost control boosts Gold Reef 
Business Day
24 August 2007

Nick Wilson

JSE-listed gaming and entertainment group Gold Reef Resorts’ revenue rose 17,9% to R839,2m in the six months to June on the back of good market conditions and new developments, it reported yesterday.

Headline earnings per share rose 21% to 68,6c.

CEO Steven Joffe said apart from upbeat market conditions and new developments, “strict processes and controls by management were critical” with all expansion programmes concluded on time and within budget.

The company said it was still in “exclusive discussions” with a consortium of investors led by Ethos Private Equity Fund V that may see it acquired and de listed.

The consortium included Gold Reef’s existing black empowerment partners, which hold just more than 25,1%, and management.

The potential offer, that would value Gold Reef Resorts at R11,6bn, was announced earlier this month.

Financial director Jarrod Friedman said although the company had been “busy with a number of transactions” including its empowerment transaction, which had become unconditional, and the discussions with Ethos, none of these issues was “represented in the numbers”.

He said that at the company’s flagship casino, Gold Reef City Casino in Johannesburg, and at Goldfields Casino in Welkom, this had been achieved despite extensive renovations. Gold Reef City Casino grew revenue 13,7% while the Goldfields business increased revenue 15,9%.

Gold Reef City Casino has been undergoing extensive renovations since July last year.

Friedman said the company was giving the casino a “complete facelift” at a cost of about R300m.

“We are adding new facilities including an 1100-seater theatre and additional food and beverage facilities,” said Friedman.

He said the higher interest rate environment had not had a significant effect on the company’s revenue during the half-year.

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