GAMBLING: Grand Parade's Positive Results
Recent Western Cape Business News
Following an eventful six months of trading, Cape Town empowerment company Grand Parade Investments Limited (GPI) achieved revenue of R218.6 million, a 36.5% increase on the same period last year, which resulted in a 71.9% increase in Headline Earnings per Share (HEPS) and a 17.7% increase in adjusted HEPS for the period ended 31 December 2011.
This 71.9% increase in HEPS equated to 19.87 cents compared to 11.56 cents last year. The significant increase per share is mainly as a result of a 25% increase in Gross Gaming Revenue (GGR) from the company’s Limited Payout Slot Machine (LPM) operations.
In addition to the 25% increase in LPM slots revenue, the positive trading was further buoyed by the conclusion of a restructuring agreement with Sun International, which saw the company pay a special dividend of 60 cents early January 2012.
In terms of the Sun International agreement, GPI has reduced its investment stakes in both SunWest (GrandWest Casino and the Table Bay Hotel in Cape Town) and Worcester Casino (Golden Valley Casino in Worcester) to a 25.1% shareholding in each, and disposed of a 30.6% interest in Real Africa Holdings.
The restructuring agreement with Sun International released GPI of all empowerment lock-in obligations. In addition to declaring a special dividend to shareholders of R282 Million, the revenue raised from the Restructuring deal has also enabled GPI to repay debts of R126 Million to SCM for preference share funding, and R40-million to Grindrod Bank Limited.
Notwithstanding the Restructuring, the net asset value per share has increased by 2.9% from 383 cents per share to 394 cents per share. The net asset value per share will be affected subsequent to the payment of the 60 cents special dividend.
Gaming highlights for the period included GGR growth of 15.2% for Grandslots, where the Group’s Western Cape LPM operation remains the market leader. Grandslots, at 31 December 2011, enjoyed a GGR market share of 56.7% with a single competitor compared to 54.3% in the same month in 2010. Grandslots generated R123 million in GGR for the period.
In KwaZulu-Natal, Kingdomslots is also the market leader. With three competitors, Kingdomslots enjoyed a GGR market share of 41.5% at 31 December 2011. Kingdomslots generated R60 million in GGR for the period, 21.9% more than in the same period last year.
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