The big roller in the South African casino industry appears to have regained its winning ways.
Recent results from gaming giant Sun International show that the GrandWest casino in Goodwood managed to increase revenue by over 10% to R1,1bn despite an economic environment that is not at all conducive to discretionary spending. But Sun International management said GrandWest did benefit from increased tourism in Cape Town.
Last year Sun International directors noted that cross-marketing was improving rapidly, and that a shuttle service was being run between the plush Table Bay Hotel and the GrandWest casino. Directors also noted that the company was placing visible “marketing Collateral” to cross-market gaming at GrandWest and the events and entertainment taking place at the Table Bay. Seemingly then these efforts are starting to pay off with the Table Bay reporting revenue growth of 10% driven by 1% increase in occupancy and a 20% growth in food and beverage revenue.
GrandWest’s profits increased 15,2% to R470m in the six months to end December, thanks to improved cost controls instituted by Sun International’s new executive management team – led by Graeme Stephens. The cost savings effectively offset the 2% increase in gaming levies, which came into effect from September 1 in 2013.
The casino’s trading margin increased 1,8% to 42,6%, which ranks GrandWest as one of the most profitable casinos in South Africa. The performance will be particularly pleasing to rival casino group Tsogo Sun – which recently acquired a 40% stake in the GrandWest casino.
Slightly further afield in the Western Cape, the much smaller Worcester casino churned R73m in profit (slightly ahead of last year) and R10m in profits (also slightly ahead of last year) for Sun International. The Worcester casino, though, operates on a rather slender margin of 13,7% - although this is an improvement on the 12,9% margin the casino operated on in the corresponding interim period in 2013.
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