Sun International plans to roll out its SunBet brand to several countries in Africa to bulk up its market share in the fast-growing online gaming sector.
CEO Anthony Leeming said on Monday that Sun International had already hit the ground running by securing a 70% interest in a Mauritian company for $3.2m (R53.9m). The acquired entity has online sports betting and casino licences to operate in Ghana, Zambia and Kenya.
“SunBet is starting to grow nicely and strongly. We launched live games last year in August and we have seen some really good growth coming from there. We have just recently launched online slots, which is licensed by the Western Cape Gaming Board, and have seen good growth there coming through,” Leeming said in an interview.
“It’s still a small component but it’s part of our business and we do see a lot of potential. We certainly don’t see it cannibalising our traditional businesses. While online is growing, we don’t see a slowdown in the recovery of the land-based sites.”
Sun International also announced the appointment of Simon Gregory as new COO for SunBet. Gregory worked at Sportingbet, which was one of the world’s largest online gaming groups.
Leeming’s comments followed the release of the company’s results for the six months to end-June in which it declared its first dividend in six years as its operating environment improved and gaming income jumped back.
The R8.15bn company declared an interim dividend of 88c per share, a first since 2016, in part because of its stronger financial position as it reduced the group’s debt by R500m to R6.6bn.
SA’s hospitality sector was one of the industries hardest hit by the Covid-19 pandemic, and Sun International’s battle with the financial fallout resulted in it cutting staff, shutting some operations temporarily and tapping shareholders for R1.2bn via a rights offer in August 2020.
Even before Covid-19, the owner of Sun City and other top hotels and casinos had been prioritising reducing its debt pile, and had not paid dividends since its 2016 year to end-June.
But the latest results show the group is bouncing back as gaming income from casinos improved by 30%.
“The group was able to successfully defend and grow market share in most provinces, while income generated from Sun Slots recovered to exceed pre-pandemic levels. SunBet generated record income during the period under review and is well on its way to achieving our aggressive growth targets for this business,” Leeming said.
This is despite ongoing power outages, fuel price hikes and high inflation affecting the group and cutting the disposable income of consumers.
Income is up 37% year on year to R5.2bn and adjusted headline earnings improved to R438m (177c per share). Core earnings almost doubled to R1.5bn.
Income from Sun Slots increased 17.9% to R717m. SunBet continued to grow as more active players head to the expanding online sports betting and gaming platform, with income growing 37% and sports turnover rising 16%.
“We believe that SunBet offers the group significant and exciting growth potential. With this in mind, we continue to invest in people, marketing and our omnichannel approach to significantly increase our share of the fast-growing online gaming market,” Leeming said.
The resorts and hotels business also recovered as revenue from domestic leisure, conferencing and sports and events exceeded 2019 levels, while transient corporate and international leisure revenue remains behind the figure of 2019.
Total resorts and hotels income is up 63% to R1.12bn, but total income is 6% lower than in 2019.
Refurbishments of R208m at The Palace of the Lost City at Sun City are still under way and expansion to the value of R122m at the GrandWest Hotel in Cape Town recently started.
Update: August 29 2022
This story has been updated with additional information.
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