Tsogo Sun has released its finalised full year results for the period ended 31 March 2014. The hotel and gaming group currently holds a market cap of R34 billion, with a PE of 18.23 and a dividend yield of 2.78%. Tsogo’s shares are trading up by 17% on the year and have seen a significant growth trend over the last 3 years. The group has recently announced its re-entry into the Dubai Market.
Highlights from the results:
- Income R10.8 billion up 9%
- Ebitda R4.2 billion up 8%
- Adjusted earnings R1.9 billion up 18%
- Adjusted HEPS 176.5 cents up 18%
- Final dividend per share 60.0 cents up 18%
An extract from the repot discussed the group’s operations and prospects, “Trading during the financial year was satisfactory in a tough economic environment. Year-on-year growth was achieved in both casino and hotel revenues assisted by the merger and acquisition activity undertaken as part of the group’s growth strategy.
Tsogo Sun has continued to allocate capital in terms of this strategy and accordingly has invested R2.4 billion during the year.
The hotel industry in South Africa continues to experience a recovery from the dual impact of depressed demand and oversupply. Overall industry occupancies have improved to 62.0% (2013: 60.9%) for the year. As a result of the strong sales and distribution channels and the superior product and service quality available within the group, Tsogo Sun Hotels continues to achieve an occupancy and rate premium in the segments in which the group operates.
The continued improvement in trading performance across the group’s operations during the year remains encouraging. However, the sustainability of this growth is uncertain due to the weaker second half trading, ongoing macroeconomic pressure and weak consumer sentiment. Nevertheless, the group remains highly cash generative and continues to pursue significant opportunities to invest capital in its growth strategy.”
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