Sun International’s half-year earnings were boosted by a very strong 71.8% rise in income from its online sports betting platform Sunbet.
Sun International directors said yesterday the “robust performance” in the six months to June 30 was also due to the strength of a diversified operating model, the omnichannel portfolio, and the execution of strategy. First-half earnings increased 9.1% from its casino and hotel operations and an interim dividend of 161 cents per share was declared, 8.8% higher than at the same time a year before.
The group, which owns Sun City resort and the upmarket The Maslow Hotel in Sandton and The Table Bay in Cape Town, said adjusted headline earnings a share grew to 215 cents in the six months to June 30 from 197 cents a year earlier.
The acquisition of Peermont Holdings, which shareholders approved on March 4, was progressing. Sun International had received credit funding from lenders, for the enterprise value of R7.3 billion. Peermont operates casino and hotels from 11 properties in South Africa and Botswana.
Competition Commission and Gambling regulatory approval for the acquisition was being sought, with a likely outcome in the first quarter of 2025.
CEO Anthony Leeming said: “Sunbet, as one of the fastest-growing companies in the online market, presents significant and exciting growth potential. We continue to invest in our people and invested in a new website front-end look and feel, which is more user-friendly, with a marketing campaign tying in the iconic Sun City to complete its brand relaunch.”
He said the improvements to the registration, customer deposit, and withdrawal processes, as well as an overhaul of the customer contact centre, meant customers now interacted with the platform seamlessly.
Overall income for Sunbet, at R512 million, delivered an adjusted EBITDA, pre-management fees, of R170m, which was 88.9% higher. Active players continued to grow, with additional games being offered and the overall player experience being enhanced.
At the end of the six months, Sunbet’s unique active players were up 72.2%; first-time depositors were up 111.6%; while deposits increased by 74.2%.
Sun Slots, in the group’s gaming portfolio, was impacted by the difficult economy, including challenges such as a slow roll-out of licences. Sun Slots achieved R686m income, adjusted EBITDA of R162m and an improved margin of 23.6% compared to 23.2% in the prior period.
Group income increased 5%, to R6bn. Gaming income, which made up 77.4% of total income, increased 3.4%. The rise in income and cost controls and a lower diesel bill yielded an adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 27.3%, in line with the prior period.
South African debt fell to R5.4bn from R5.7bn as at December 31, 2023. Some 3.87 million Sun International shares were bought back in the open market at an average price of R36.54 per share.
Urban casino income was up 0.5%. The larger properties continued to grow and protect margins, while regional properties lacked top-line income growth. The adjusted EBITDA margin, pre-management fees, of 33.1% was down 1.6 % on the prior comparative period.
“We remain focused on enhancing the customer experience … to ensure that our acquisition and retention strategies result in sustainable revenue growth,“ said Leeming.
The group made several interventions to address the challenges and ensure Sun Slots was well positioned for an economic recovery.
Hospitality income from resorts and hotels increased by 12.3%, as Sun City and Table Bay enjoyed the benefits of local and international travel.
Total resorts and hotels income was up 6.2% to R1.5bn. Adjusted EBITDA, pre-management fees, of R346m was an improvement from R314m.
BUSINESS REPORT