South African hotels, gaming and entertainments firm Tsogo Sun Holdings Limited has announced its intention to purchase more venues in the United Kingdom despite reporting a flat operating profit for the first half of its fiscal year.
Johannesburg-based Tsogo Sun Holdings Limited operates some 14 gaming and entertainment destinations in six provinces of its home nation including The Ridge Casino, Montecasino and The Caledon Casino Hotel Spa and revealed that it will buy additional hotels in the United Kingdom through its International Hotel Properties Limited investment concern, which already owns eight such properties in the European country.
According to a report from the Reuters news service, Tsogo Sun Holdings Limited explained that a weakness in the pound following the United Kingdom’s decision to exit the European Union has made its decision much more affordable while it expects conditions outside of the British market to remain challenging into the future.
“We’ve put about $35.26 million into the UK market, which is doing quite well for us and I think we’re going to put in more money,” Marcel Von Aulock, Chief Executive Officer for Tsogo Sun Holdings Limited, told Reuters. “Quite frankly, with “Brexit” and all the uncertainty and the collapse of the pound, [it] actually gives opportunity. Those United Kingdom hotel assets just got a whole lot cheaper in rands.”
Tsogo Sun Holdings Limited is Africa’s biggest hotels and gambling operator with additional interests in Nigeria, Kenya and Mozambique and already owns eight hotels in the United Kingdom via International Hotel Properties Limited.
For the six months to the end of September, the South African company reported overall revenues of approximately $445.4 million, which represented an increase of 8% year-on-year, although operating profit remained relatively static at $111.42 million despite a 6% boost in net income to $61.29 million.
The firm’s gaming division saw its revenues improve by 4% year-on-year to about $317.28 million while those from its hotels operation swelled by 22% to $105.79 million with takings from rooms rising 12%. But, Von Aulock described the 3% improvement in half-year gaming win to just under $260.87 million as “disappointing” while slot takings increased by 1% to $193.14 million with table games win strengthening 12% to $66.11 million.
“Growth will depend on the future performance of these economies as well as the level of policy certainty in South Africa,” Von Aulock told Reuters.
He reportedly declared that Tsogo Sun Holdings Limited had spent over $1.41 billion expanding its business over the course of the previous seven years and currently has projects in development worth around $423.29 million.