SA's listed hotel and casino groups recently reported a surge in profits and dividends on the back of last year's buoyant consumer spending, but their longer-term profitability will depend on where they invest their excess cash.

Apart from returning cash to shareholders with increasingly generous dividends, the country's hotel and casino groups are expected to reinvest in maintaining and expanding their existing casinos, vying for the handful of new casino licence opportunities still to come, acquiring or developing local hotels, or exploring opportunities in Africa and elsewhere.

Gold Reef Casino Resorts has indicated it intends to focus on local opportunities and concentrate on casinos rather than hotels in the foreseeable future.

It is still waiting for the outcome of attempts to secure the sixth Gauteng casino licence for Silverstar Developments. It has an option over Silverstar, which it will exercise if the company secures the licence.

If Silverstar goes ahead, it is expected to be a substantial development, probably the second biggest in Gold Reef's portfolio, depending on the number of slots and tables allowed by the licence conditions.

Sun International is upgrading existing casinos and will start work this year on a new R166m casino development near Bloemfontein. It is also investigating opportunities in Africa and other markets.

It has a team in the UK looking at opportunities to develop regional casinos, when legislation allows; is waiting for approval for a proposal in Luanda, Angola; and has filed a response to the Singapore government's request for concepts for the country's first casino.

Peermont Global is still awaiting final approval for its R67m casino near Bethlehem in Free State.

Peermont CEO Ernie Joubert said in a recent interview with Business Day Classic FM that there were still another seven or eight casino licences to come up in outlying regions and, when requests for proposals were issued, the group would consider participating.

The group is also expanding into the budget, select-services and three-star hotel sector in SA because that is where it sees the growth in the market.

Outside SA, Peermont has just bought two hotels in Botswana and is also understood to be looking for opportunities in Mozambique.

Imara SP Reid analyst Warwick Lucas mentioned in his report on the group's results that Peermont had participated in Singapore's request for concepts, although Peermont would take only a small equity stake in a development.

Unlisted Tsogo Sun, which owns casinos such as Montecasino and Hemingways, said last year that its hotels arm, Southern Sun, would manage two luxury business hotels in Lagos, Nigeria and was looking at other opportunities for hotels in west Africa, particularly in Ghana and Angola. Southern Sun already operates in a number of central and east African countries.

Since reporting results, Gold Reef shares have shed 10c to R13,75, Sun International has dropped R4,50 to R63,50 and Peermont has gained 20c to R7,80.

Business Day