Strong revenue growth for Grand Parade

The group on Tuesday reported a 33% increase in revenues to R435 million‚ while headline earning per share (HEPS) increased by 82% and adjusted HEPS rose 30% to 29.09 cents. Diluted HEPS were up 30% to 29.09 cents.

Profit from operations was 231% higher at R58.2 million.

The group declared a final dividend of 12.5 cents per share and a special dividend of 7.5 cents per share totalling 20 cents - representing a 100% increase over the previous year‚ and paid a special dividend of 60 cents per share earlier in the year.

The company said the increase in earnings primarily arose from the returns on available cash‚ the decreased finance charges due to lower debt levels as well as the improved performance of its limited payout machine (LPM) operations.

"GPI's results are pleasing‚ we had a successful year and continue to show solid growth‚" said CEO Alan Keet.

The company noted that the effects of the restructuring transaction with Sun International in December 2011 were removed from the adjusted HEPS to normalise earnings. 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 its entire 30.6% interest in Real Africa Holdings.

A review of GPI's jointly-controlled entities with Sun International showed satisfactory increases‚ said Keet.

Despite the challenging economic environment in the Western Cape over the last year‚ GrandWest's revenue increased by 7.9% and its attributable earnings‚ after the once-off cancellation fee‚ increased by 5.9%.

The Table Bay Hotel achieved a 4% increase in revenue while its attributable loss increased by 37.2% due to a 5.3% drop in the average room rate from R2‚060 to R1‚956 year on year and an occupancy rate decrease from 48.1% to 47.5%.

Golden Valley Casino's revenue increased by 6.7%‚ while its attributable earnings before the payment of the once-off cancellation fees increased by 158.4%. After the payment of its cancellation fees‚ its attributable loss decreased by 66%.

"It is very encouraging to see the increase in slots' gaming revenue‚ despite a relatively small increase (3.3%) in active LPMs over our three licenses‚" said Keet.

In the Western Cape‚ Grandslots continued to maintain its market dominance. There are two licensed operators in the province and Grandslots enjoyed a 56.8% market share. Gaming revenue increased by 16.9% to R249.6 million despite a slight decrease of 2% in the number of its active LPMs during the period.

In KwaZulu-Natal‚ Kingdomslots remained the market leader in the province. With four licensed operators‚ Kingdomslots enjoyed 41.2% market share (2011: 42.6%). It showed a significant increase in gaming revenue of 19.3% to R119.3 million on the back of a slight increase of 1.9% in its number of active LPMs during the period.

In Gauteng‚ Grand Gaming: Slots‚ one of five licensed operators‚ achieved revenue of R26.7 million during its first full year of operations.

"We are pleased to see that Grand Gaming: Slots increased its overall market share in Gauteng by 1%‚ despite legislative delays at the Provincial Gambling Board‚ which resulted in a slow rollout of only 62 machines during the year‚" said Keet.

Executive Chairman Hassen Adams added that the group was committed to investing in low capital expenditure gaming operations and would look at increasing its LPM footprint by investing in new and existing route operator licenses in jurisdictions that proved to be economically viable and to expand the number of Type B (up to 40x LPMs) licenses it currently operated.

GPI said it would work toward increasing its market share in the Gauteng province and to remain the market leader in the Western Cape and KwaZulu-Natal.

"Looking forward‚ we will continue to look for opportunities to strategically position ourselves to benefit from technology-based gaming as and when legislation permits‚" said Keet.

By noon on the JSE‚ Grand Parade's share price was up 6 cents‚ or 1.97%‚ to 310 cents.