Tsogo Sun keeps generating cash

The company‚ which is Africa's biggest hotel and casino operator reported a 40% rise in diluted headline earnings per share to 69.9c for the six months ended September from 50.1c a year ago.

Income was 4.8% higher at R4.8bn‚ while adjusted earnings grew 36% to R746m.

An interim dividend of 24c was declared‚ up 20% on a year ago.

The company said the first half of the financial year reflected a continued recovery in trading conditions‚ as experienced in the second six months of the prior year.

Year-on-year growth was achieved in both casino and hotel revenues‚ assisted by a particularly strong September trading month for both divisions‚ and the consolidation of the Formula 1 hotel business.

"The continued improvement in trading conditions across the group's operations during the first half of the year is encouraging.

"Whether this is sustainable or not is uncertain as we have seen some inconsistency in our monthly results. For instance September 2012 produced particularly high activity levels in both gaming and hotels‚" Von Aulock said.

Looking ahead‚ the group said it was proceeding with a R200m expansion of the Emnotweni Casino‚ in Nelspruit‚ which includes the construction of an expanded casino floor‚ additional gaming positions‚ additional covered parking‚ a conference and events area and restaurants.

Plans are also at an advanced stage for the redevelopment of the Silverstar Casino and Tsogo Sun is also exploring a variety of projects‚ including the redevelopment of the Gold Reef City Theme Park‚ the expansion of the Suncoast casino and related entertainment facilities‚ as well as a number of potential acquisitions which are at various stages.

"The opportunity to bid for the relocation of one of the smaller casinos in the Western Cape to the Cape Metropole remains an opportunity for the group should the various legislative amendments allow this process to be effected‚" the company added.