Tsogo Sun raises stake in Gold Reef

Adele Shevel

Adele Shevel

Tsogo Sun Holdings, the gaming company controlled by empowerment group Hosken Consolidated Investments and Southern Sun, now owns 23 percent of Gold Reef Resorts - making it the single largest shareholder in the casino group.

This was put forward in Gold Reef's annual results released yesterday. Last year Tsogo tried to take over Gold Reef Resorts but the deal fell through.

Gold Reef has been impacted by weaker consumer spend, though this has been partially countered by the opening of a new casino.

For the year ended December, Silverstar expanded the group's share of the Gauteng gaming market to 24,5 percent, contributing R510million to group revenue and R191million to earnings on an adjusted basis. It will contribute further this year.

The new casino also reduced the group's dependence on Gold Reef City, where revenue at Gold Reef City declined by 0,4percent to R990million with footfall down 4,3percent.

Full year adjusted headline earnings a share dropped 9,4percent after trading volumes contracted. Net group debt increased by R120million to R1,3billion.

An analyst said the results were better than expected, and it was positive that the group maintained a dividend, which is particularly favourable in this market.

Though Gold Reef City margins moved backwards they were stronger than expected.

"The company reduced costs as far as possible and tried to sustain margins," said an analyst.