Strong trading in the Western Cape and growth in Gauteng, albeit off a low base, have boosted Southern Sun’s trading volumes.
Trading volumes improved during the second six months of the financial year with group occupancy at 60.7% for the 11 months ended February compared with 58.3% achieved in the prior comparative period, it said in a statement on Monday.
The group’s average room rate increased by 5.1% for the period from a year ago.
The refurbishments of Southern Sun The Cullinan and the Sandton Towers, which re-opened in July 2024 and December 2024 respectively, as well as the refurbishment of the restaurant and rooms at Southern Sun Rosebank and Southern Sun Sandton, were well received by the market and contributed to the occupancy and rate growth experienced in Cape Town and Gauteng in the second half of the financial year, Southern Sun said.
However, detractors from the group’s performance include KwaZulu-Natal and Mozambique.
Domestically, there was a slow-down in travel and accommodation demand from the corporate, government and leisure segments in the leadup to the election in May 2024. While corporate and leisure demand returned post-elections, the government segment was slower to normalise but was showing improvement during the third quarter of the financial year, the group said.
In addition, a lack of eventing demand at the Durban International Convention Centre negatively affected trading at the group’s Durban hotels. In contrast, trading in Umhlanga was buoyant.
In Mozambique, political unrest and rioting in Maputo that began in November 2024 severely affected demand at the Southern Sun and Stay Easy hotels. While the unrest subsided after the presidential inauguration in January and the hotels were in a relatively safe area surrounded by embassies and related security, occupancies had been slow to recover, Southern Sun said.
Disciplined cost control had generated strong cash flows over the period, reducing net interest-bearing debt.
The savings in finance costs together with the reduced number of shares in issue following the share buyback implemented in the second half, meant full-year HEPS were expected to be at least 20% higher than the previous year, Southern Sun said.
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