Gold Reefs bet pays off
The Citizen
17 March 2009

Bloomberg

GAMING and hotel group Gold Reef Resorts said full-year earnings more than doubled on the inclusion of its new Silverstar and Queens casinos.

Net income jumped to R358m, or R1.30, in the 12 months ended December 31, from R146m, or 61 c a share, a year earlier, the company said in a statement to the JSE yesterday. Sales rose 29% to R2,2bn.

Overall performance has been impacted Dy weaker consumer spend," CEO Steven Joffe said. "This, however, has been partially offset by the opening of a new casino. Silverstar Casino made a pleasing contribution to revenue and profit in its first full year of operation."

South Africa's economy shrank 1,8% in the fourth quarter of 2008. Interest rates were raised six times in the year through to June to cut consumer spending and bring inflation to within the country's target range of between 3% and 6%.

Gold Reef Resorts expects "unbelievable"acquisition opportunities to present themselves as the business cycle in SA deteriorates, Joffe said.

Possible acquisitions lie in "big hotel groups that don't have any casinos", Joffe added.

Gold Reef wants to operate in "most African countries", including Angola and Botswana, Joffe said. Many African nations prefer that operators combine hotels and casinos rather than only operate gambling houses so Gold Reef needs 'to work on our hotel development" expertise, he said.

Meanwhile, Harrah's Entertainment's Emerald Casino Resort, which owns a casino on the Vaal River, will "aggressively" challenge Gold Reef Resorts' plans to build a casino in the same area.

"We know that they have been trying to get a licence for a number of years," Emerald's chief executive Martin Rice said yesterday.

Emerald has previously opposed an application by Gold Reef, Rice said, and will "aggressively oppose any application for a licence or attempt to build a casino".

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