Tsogo takes big stake in Gold Reef
The Times
17 March 2009

Adele Shevel

TSOGO Sun Holdings, the gaming company controlled by empowerment group Hosken Consolidated Investments and Southern Sun, now owns 23 percent of Gold Reef Resorts — making it the largest shareholder in the casino group.

This was disclosed in Gold Reef’s annual results released yesterday.

Last year, Tsogo tried to take over Gold Reef Resorts, but the deal fell through.

Gold Reef has been affected by weaker consumer spend, though this has been partially countered by the opening of a new casino.

For the year ended in December, Silverstar expanded the group’s share of the Gauteng gaming market to 24.5 percent, contributing R510-million to group revenue and R191-million to earnings on an adjusted basis.

It is expected to contribute further this year.

The new casino also reduced the group’s dependence on Gold Reef City, where revenue declined by 0.4 percent to R990-million, with footfall down 4.3 percent.

Full year adjusted headline earnings per share dropped 9.4 percent after trading volumes contracted.

Net group debt increased by R120-million to R1.3-billion.

An analyst said the results were better than expected, and it was positive that the group maintained a dividend particularly favourable in this market.

Though Gold Reef City’s margins moved backwards, they were stronger than expected.

“The company reduced costs as far as possible and tried to sustain margins where they could,” said an analyst.

During the year under review, R445-million was spent on capital expenditure.

With all properties expected to be refurbished or new by the end of this year, limited capital expenditure is anticipated in the short term.

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