GAMBLING: Grand Parade A Good Bet
Recent Western Cape Business News
Grand Parade Investments Limited (GPI) announced a very impressive 34% increase in adjusted headline earnings per share (HEPS) for the six months ended 31 December 2010. GPI is a major investor in GrandWest Casino.
Actual headline earnings grew R13 million to R53 million on the same period last year, with adjusted headline earnings per share increasing from 8.98 cents to 12.00 cents.
The group has always maintained and been outspoken about its vision of becoming a major and respected force in the gaming and leisure industry in Africa, with chairman Hassen Adams re-affirming that commitment 6 months ago when the group acquired full ownership of its Limited Payout Slot Machine (LPM Slots) operations on 30 June 2010. It has been as a result of that acquisition that for the first time GPIs consolidated results include revenues and costs from its LPM Slot businesses.
“Our LPM Slot businesses’ revenues and profits are ahead of the feasibilities on which the acquisition decision was based, and that, along with management’s efforts to enhance efficiencies and implement good cost management, has delivered a substantial improvement in our adjusted HEPS,” said GPI Chief Executive Officer, Adrian Funkey. “Grandslots (operating in the Western Cape) and Kingdomslots (operating in KwaZulu-Natal) generated a combined R155.6 million in Gross Gaming Revenue (GGR) during the six months under review, 14% more than last year”.
The LPMs’ contribution to GPI is set to grow significantly in the future, with the group already having concluded, through its subsidiary Thuo Gaming Gauteng (TGG), a binding sale of business agreement with LPM operator Playmeter Leisure Services (Pty) Ltd (Playmeter), as announced on SENS in November 2010.
“When we acquired our LPM Slot operations 6 months ago, we made a commitment to a short to medium term goal of increasing our licensed LPM slots network from 2 000 to 5 000, and as a result we are extremely excited at the prospects of concluding the Playmeter transaction. Gauteng’s LPM performance continues its upward trend, accompanied by a stronger roll-out of machines (419 at end July 2010 to 620 at end December 2010). We look forward to capitalising on this and acquiring a similar market leadership position in Gauteng as we enjoy in the Western Cape and KwaZulu-Natal,” Funkey said.
The transaction, which is still subject to approval by the Gauteng Gambling Board, will see TGG acquire the assets and contracts of Playmeter’s route operator business in Gauteng. This includes Playmeter’s Route Operator Licence, which will provide TGG with the ability to operate up to 1 000 LPMs in Gauteng. As at 31 December 2010 Playmeter was operating a total of 77 LPMs across 19 venues.
The performance of GrandWest, which produced a 6% growth in revenue and a 5% growth in earnings, was particularly encouraging given the challenging environment in which it has been operating. This was however negatively impacted by the performance of The Table Bay Hotel, which suffered from lower occupancy levels.
GPI’s associated investments performed well, with GPI’s share of Real Africa Holdings’ attributable earnings growing by 29%.
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