Gold Reef hits the jackpot by lifting casino revenue
Business Report
24 August 2007

By Ronnie Morris

Cape Town - Upbeat market conditions and new developments were the key revenue drivers for Gold Reef Resorts, which saw its casinos boost revenue by 17.9 percent to R839.2 million.

Attributable profit for the six months to June went up 25.4 percent to R138.2 million, chief executive Steven Joffe said yesterday.

The group was still trading under a cautionary following an offer by a consortium led by Ethos Private Equity Fund, including its own management and black economic empowerment shareholders, for the purchase of all the issued shares at R34 apiece.

About 80.5 percent of shareholders have already approved the deal, which would deliver an enterprise value of R11.6 billion for Gold Reef.

Headline earnings a share grew by 21 percent to 68.6c compared with the same period last year.

Earnings before interest, tax depreciation and amortisation of R358.1 million were up by 22.9 percent, represented a 42.7 percent margin on revenue.

Joffe said revenue at the flagship Gold Reef City Casino increased by 13.7 percent to R505.2 million despite the disruption caused by its upgrade.

Garden Route Casino was the group's star performer, increasing revenue by 21.3 percent to R81.2 million.

Jarrod Friedman, Gold Reef's financial director, said the casino's growth could be attributed in part to the opening of an adjacent golf course that attracted new and higher spending patrons.

Gold Reef yesterday gained 0.81 percent to R31.

The leisure and hotel sector added 1 percent.

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