Sun focuses on Chile, Nigeria

Posted On Thursday, 30 August 2007 02:00 Published by Commercial Property News
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Hotel and leisure group Sun International said it would focus on its Chilean and Nigerian projects in the year ahead

Hotel and leisure group Sun International said yesterday it would focus on its Chilean and Nigerian projects in the year ahead but would continue to look at new opportunities to expand its territorial base.

The company yesterday posted revenue of R6,9bn, a 17% improvement on the year before’s ’R5,9bn.

CEO David Coutts-Trotter said the company would not diversify further as it would rather expand into new territories but hoped to benefit from the run-up to, and post-2010, World Cup fever.

Its aim to take part in a UK casino project fell flat after the licence award was revoked by parliament. “It appears that licences will no longer be awarded for regional casinos,” the company said.

In March, Sun International said it had agreed to acquire a 40% stake in Chilean San Francisco Investment, which holds a 15-year casino licence in a 70km exclusive zone. However, Sun International’s involvement in the project remained subject to regulatory approvals.

After approval, the company will spend $45m for its share in the development, which comprises a casino with 1500 slot machines and 80 tables, a conference centre and a 150-room hotel. Construction has started and the casino should open next September.

In Nigeria, the group was wrapping up agreements with its partners in Lagos and the parties were finalising the gaming licence. Sun International would have a 49% stake for $38m in a 394-room development. A 500 machine casino would also be developed.

The leisure group undertook to assume operational responsibility from October and provide bridging finance of $38m for the $120m project.

Coutts-Trotter said the group was planning its Egyptian management contract at three hotels due to open in November.

Despite an impending slowdown in the local economy and consumer spending, Coutts-Trotter remained optimistic that the group would grow earnings next year and would start benefiting from the 2010 effect in the next few years.

He said the expected “massive” infrastructure spend in the run-up to the games and the government’s R420bn infrastructure spend would bolster the local economy in its gaming division.

The company grew revenue from gaming during the year under review 18% to R5,4bn from R4,5bn. Slot revenues were 20% ahead of last year, with table revenues 8% ahead. Some of the growth was a result of a full year’s trading from its Bloemfontein Windmill Casino and the opening of the Golden Valley Casino in Worcester in November.

Sun International said revenue from rooms grew 14% to R776m from 681m and its overall occupancy rate was 74%, up from 71% in the prior year. The average room rate improved 7% to R792 largely due to good growth in international individual tourism.

Last modified on Wednesday, 05 June 2013 02:10

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