Tsogo Sun Gaming, a JSE listed company, has published its financial results for the year ending 31 March 2020. These show a 1% increase in income to R11.7 billion, and a loss of R0,4bn in revenue (or 3%) due to the COVID-19 outbreak.Other results include:
- Ebitdar* decreased by 1% to R4 billion
- Ebitda** increased 3% to R4bn
- Adjusted earnings down by 14% to R1.4 billion due to higher interest cost
- Adjusted HEPS down by 14% to 134,5 cents
Since the state of disaster was announced, the business – which holds licenses for 14 casinos, 21 Galaxy Bingo sites and VSlots in all nine provinces – has lost an estimated R2bn in revenue, and its debt has increased to R12bn since year end.Chris du Toit, CEO of Tsogo Sun Gaming (pictured right), says that the business needs to be allowed to open a matter of urgency to avoid further losses – and that it is in a position to do so responsibly. “The business is ready, with a robust strategy of enhanced hygiene and safety measures to enable a seamless re-opening to our loyal customers,” he says. To survive lockdown, the company has negotiated an extended payment plan with lenders and has reduced its costs.
“The business is ready, with a robust strategy of enhanced hygiene and safety measures to enable a seamless re-opening to our loyal customers.”Annelize Hoyer has been appointed as the group’s CFO, effective 1 August 2020. She says, “The focus during the lockdown has been primarily to eliminate variable operating costs as quickly as possible, reduce fixed costs and cancel non-essential and uncommitted capital expenditure in order to restrict the increase in net debt during the period the businesses is prevented from trading. There are many challenges that await me in my new role as CFO during these difficult times, but we are confident that the measures that have been, and are still to be implemented, will provide a long-term reduction in our cost base, without limiting future performance.” Despite this, the group remains optimistic about its prospects. “We are using the time to position the business for the future; the Tsogo Sun Gaming brands are strong and are here to stay,” says du Toit.
“We are using the time to position the business for the future; the Tsogo Sun Gaming brands are strong and are here to stay.”The group will continue with its marketing strategy to host new events such as the Magical Italian Festival of Lights and a Ferrari promotion. The public responded well to both – although the Ferrari event had to be cancelled due to the pandemic. Additionally, du Toit noted that they will turn their attention to taking their product online; “We are also in an advanced stage of entering the online betting industry which is a separate segment of the market.” The expected restrictive trading conditions that will be required to open will be challenging and will affect profitability. It is hoped that the group’s online products will protect the substantial investment and jobs (including 10,000 employees) created by casinos. Once trading recommences, the group also plans to prioritise surplus cash to reduce the debt levels. To view the groups 2020 financial results presentation, click here.