Sun International ended 3.59% lower on Wednesday, following reports the group had decided to halt its plans to acquire the Peermont Group. This comes after the Competition Commission recommended the deal be blocked, stating the transaction would prohibit competition in Gauteng. Subsequently, Sun International informed the Tribunal, at a pre-hearing, that the group had abandoned its intention to merge and asked to have its case struck from the roll. During 2015, Sun International made it clear it was looking to buy Peermont Group, which operates hotels and eight casinos in South Africa, in a deal worth around R9.5bn.
On Friday afternoon, Sun International released a trading statement for the 6-months ending 31 December 2015, advising shareholders the group expects to report a loss per share of between 430 cents and 470 cents, down from earnings of 849 cents in the previous corresponding period. The group is also expected to report a headline loss per share of between 450 cents and 490 cents, a fall of between 221% and 223% compared to earnings of 372 cents a year ago. This sharp decline can be partly attributed to subdued casino trading in the group’s core South African market, as well as interest and capital charges from the Ocean Sun Casino in Panama and the Sun Nao Casino in Columbia. Results were also affected by the raising of an accrual of R747mn for the settlement of the Menlyn Maine note as a result of the Peermont group acquisition being unlikely to proceed and the settlement of the GoldRush legal challenge to Menlyn Maine.
Continue reading Brutal Sun International trading update
Sun International owns and operates casino, hotel and resort properties in South Africa, other African countries and Latin America. Their casino operations contribute the largest share of Group revenue. The Group is actively expanding its casino business into growth markets, particularly in Latin America, while optimising its existing portfolio in South Africa and other African countries.
With a market capitalisation of approximately US$1.4-billion, Sun International is the leading casino operator in the southern hemisphere and enjoys a 42.5% share of the South African casino market. As one of Africa’s most significant tourism and leisure groups, Sun International owns and operates internationally acclaimed tourism resorts, luxury hotels and urban entertainment operations in eight countries, including South Africa, Zambia, Nigeria, Botswana, Namibia, Lesotho, Swaziland and Chile. More than half of this portfolio has been developed in the last 15 years, with new projects having been launched in West Africa and South America.
Brands/properties include: Sun City, Carnival City, Maslow, GrandWest, SunBet, Carousel, Boardwalk, Fish River, Wild Coast Sun, Monticello (Chile) and Ocean Sun Casino.
Every day, over 50,000 customers from over 50 countries visit a Sun International property.