Markets welcome Tsogo Sun Gaming’s road to recovery
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TSOGO Sun Gaming’s shares yesterday leapt 7 percent higher on the JSE as it announced its income for the half-year ended September 2021 gained 144 percent to R3.8 billion from a year earlier, marking a recovery following stringent Covid-19 restrictions.
The shares rose to a high of R10.71 in intraday trade, later closing at xxx
The group, whose casinos include Montecasino, Gold Reef City and Hemingways, said the income was still 36 percent below pre-Covid levels for the six months ended September 30, 2019.
Group adjusted earnings before interest taxation depreciation and amortisation (Ebitda) of R1.2bn was up 723 percent from a year ago, but still 35 percent below pre-Covid levels.
Group headline earnings for the period amounted to R323 million from the R54m headline loss reported in 2020.
“The various trading restrictions emanating as a result of the ongoing National State of Disaster, which included various curfews, alcohol bans, trading and capacity restrictions, and the total lockdown for the better part of July 2021, resulted in a R352m reduction in headline earnings compared to the pre-Covid comparable six months ended September 30, 2019,” the group said.
The business gained an extra hour of peak time trading after South Africa adjusted to level 2 lockdown in September to level 1 a month later.
“The prospects of the group can be best explained by reference to the September and October 2021 month performances, taking into account that the gaming businesses are still required to close at 11pm,” said Tsogo.
Tsogo said during adjusted level 1 with an 11pm closing time, there were some encouraging trading levels at its casinos.
“It is impossible to ascertain with certainty when gaming will fully recover after all restrictions are finally lifted as is predicted to happen sometime in the 2023 financial year, since the casinos have not had one full month of unrestricted trading for the past 20 months,” said the group.
Tsogo said its casinos were hard hit by Covid-19 restrictions, losing between three to five hours of peak trading time daily as a result of the varying curfews. The group said the restrictions negatively impacted the business and employees’ livelihoods, and would continue to do so if further restrictions and lockdowns were imposed.
Tsogo said the civil unrest in KwaZulu-Natal and parts of Gauteng had resulted in the destruction and closure of two bingo sites in KwaZulu-Natal. These sites were reopened in November 2021. The region’s other bingo sites were also negatively impacted due to shopping centres in KwaZulu-Natal opting to close earlier than required in order to mitigate security threats.
The bingo division completed the development of its flagship, state-of-the-art “The Marco Polo” site at Sandton City in Gauteng this month. No dividend was declared.