HCI delivers strong HEPS growth, but structural gaming pressures site

Key topics:Underlying strength: HEPS up 74%; coal, branded goods and broadcasting deliver major gains.Structural pressures: Gaming and transport revenues fall; impairments total R201m across segments.Capital discipline: Strong cash generation; R135m share buy-backs; dividend maintained at 60c.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..BizNews Reporter.Hosken Consolidated Investments (HCI) has delivered a mixed set of interim results for the six months ended 30 September 2025. The diversified investment group reported strong headline earnings growth driven by coal mining, branded products and broadcasting, but this was offset by weak performances in gaming and transport, accompanied by sizeable impairments.Group income rose 4% to R12.1 billion, but EBITDA dipped slightly by 0.7% to R2.64 billion. Profit before tax fell sharply—down 77.5% to R1.51 billion, reflecting the absence of last year’s exceptional once-off gains from the Impact Oil & Gas transaction. In the prior comparative period, HCI recognised more than R5.3 billion in non-recurring fair value and translation adjustments linked to that acquisition.Headline Earnings surge despite lower profit before taxStripping out non-recurring items, the group’s underlying performance strengthened significantly. Headline earnings increased 73.8% to R744 million, with HEPS rising 74.2% to 922 cents. Management highlighted stronger contributions from energy, branded goods and broadcasting.Cash generation improved materially, with cash from operations rising to R985 million, more than double the R460 million achieved in the prior period. Net asset value per share increased to 30 029 cents, and the group remained fully compliant with all central-borrowing covenants.Coal, manufacturing and media drive growthHCI’s coal mining assets delivered standout results. Revenue increased 15%, supported by improved yields and pricing at Palesa Colliery following the signing of a new eight-year Eskom off-take agreement. EBITDA surged 115%, while profit before tax and headline earnings rose 194% and 173% respectively.The branded products and manufacturing division posted a strong recovery, with revenue up 23%. Branded products enjoyed a “stellar” period as toy and electronics sales doubled (up 105%), while industrial products benefited from limited load shedding, pushing revenue up 7%. EBITDA increased 25%, with headline earnings jumping 87%.In the property segment, revenue grew 12%, supported by Steenberg residential development sales. The division also reduced finance costs by R14 million.The media and broadcasting segment held up firmly despite a 10% downturn in the national TV advertising market. e.tv retained over 20% prime-time share, while the broader group achieved a stable 34% share. Profit before tax and headline earnings rose 15%.The hotel segment recorded a steady performance, with revenue up 5% and average room rates increasing 4%. Headline profit remained stable at R134 million.Gaming and transport struggle, driving large impairmentsThe group’s traditional gaming operations remained under pressure as consumers shifted further toward online gambling products. Casino revenue and net gaming win declined 1%, while EBITDA contracted 3% to R1.69 billion.Impairment testing resulted in R31 million in casino licence impairments and R113 million in impairments to property, plant and equipment across the Emnotweni, Goldfields, Blackrock and Caledon precincts. Gaming-related assets accounted for the majority of the group’s total R157 million PPE impairments.The transport division faced a weak period, with revenue falling 6% as Metrorail recommissioning and ongoing roadworks hit passenger volumes. Vehicle and spare-parts sales plunged 30%. Additional depreciation and financing costs linked to the acquisition of 80 new electric buses further pressured earnings, reducing profit before tax by 14% and headline earnings by 12%.Oil and gas prospecting operations recorded a R40 million loss before tax and headline losses of R22 million.Capital allocation and dividendHCI declared an interim dividend of 60 cents per share, payable 22 December 2025. The group repurchased R81 million in shares during the reporting period and a further R54 million afterwards. It also sold 50 million City Lodge shares for R200 million.OutlookHCI’s results highlight a stark divergence within its portfolio: resource and manufacturing assets are driving strong earnings momentum, while traditional consumer-facing sectors—especially land-based gaming—face structural headwinds, resulting in substantial impairments. Management said portfolio diversification and cash discipline remain central priorities heading into 2026..Read the results in full by downloading the PDF below

HCI delivers strong HEPS growth, but structural gaming pressures site

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