The group declared a dividend for the year of 48 cents per share, representing a 78% increase on the 27 cents declared in 2003.
Gold Reef owns such well known casinos as Gold Reef City in Gauteng, Golden Horse, Casino Mykonos, Garden Route Casino and Goldfields Casino.
Reporting its final results on Wednesday, Gold Reef said its strong performance, on the back of rising disposable income among consumers in buoyant economic conditions, had resulted in the group being net cash-positive for the first time. Cash totalled R47.9 million, while the group also managed to reduce its external interest-bearing debt by R146.8 million during the period.
Group revenue rose 16.9% to R1.1 billion, while profit attributable to shareholders was 56% up at R194.8 million.
Earnings before taxation, depreciation, and amortisation (EBITDA) came in at R437.8 million, 25.4% higher than the year-earlier period and represented a 41.4% margin on revenue.
Gold Reef said that during the year it had focused on optimising operational efficiencies at its casinos, consolidating group policies and procedures and eliminating debt. The casinos had all performed exceptionally, particularly the two newest operations - Garden Route Casino and Goldfields - both of whose trading results beat expectations.
By far its largest operation is Gold Reef City, which reported 11.7% revenue growth to R796 million and a 13.2% increase in EBITDA to R300.9 million. The EBITDA margin was 37.8%, up from 37.3% the previous year.
Golden Horse followed with a revenue rise of 16.2% to R142.4 million, EBITDA grew 20.5% to R52.6 million and the EBITDA margin rose to 38.3% from 33.5% previously. Casino Mykonos, meanwhile, saw revenue rise 26% to R69.7 million and earnings were 43.8% up at R26.7 million.
The Garden Route Casino posted a 32% increase in revenue to R98.5 million, with earnings growth of 34.1%, and finally Goldfields' revenue jumped to 80.5 million rand from R5.8 million the previous year, with EBITDA of R36.1 million.
The group said that its black empowerment partner at Gold Reef City, Akani Leisure Investments (ALI) was in the process of restructuring its funding with Gold Reef's assistance, in order to raise its economic interest in Gold Reef City to25.01%.
Looking ahead, Gold Reef said it expected the positive economic environment to continue in 2005. With low inflation and interest rates and additional wage increases higher than inflation, this bode well for rising real disposable income.
"GRCR is confident that the group is well positioned to capitalise on these factors and anticipates continued growth in revenue and operating profit in 2005," it said.
The group is also in a unique position to leverage its strong balance sheet in pursuing acquisitions and developments if appropriate."
I-Net Bridge
Publisher: I-Net Bridge
Source: I-Net Bridge
