Tsogo Sun Ltd (JSE: TSG / FRA: G5E) is South Africa’s largest hospitality company, the only casino, hotel and entertainment group in the top 100 companies of the JSE, and it’s Africa’s biggest casino operator. The Company recently reported earnings:
Africa's biggest casino operator, Tsogo Sun Gaming, declared a bumper annual dividend on Thursday as it raked in higher earnings post-Covid and expands its hotel footprint, despite its income being dented by load shedding.
OVERVIEW:
Prior to 2011, Tsogo Sun Holdings owned and operated two divisions: Southern Sun Hotel Interests and Tsogo Sun. On 24 February 2011, Tsogo Sun Holdings concluded a merger with and reverse listing through Gold Reef Resorts. Since the unbundlingof its business into separate hotels and gaming interests in June 2019, Southern Sun (JSE: SSU) and Tsogo Sun have been listed separately on the JSE (See: Southern Sun (JSE: SSU): Almost Normalcy for Southern Africa's Leading Hospitality Stock).
Tsogo Sun is a premier hospitality group with a portfolio that encompasses casinos, hotels, event venues, theatres, restaurants, bars, a theme park, a bird garden and more. It has a significant presence in the gambling industry in South Africa, with premier casino and entertainment destinations, Galaxy Bingo sites, VSlots limited payout machines (“LPMs”), and bookmaker licenses. In addition, the group owns hotels, a theme park, theatres, cinemas, and conference facilities.
The Key shareholder is Hosken Consolidated Investments Limited (JSE: HCI / OTCMKTS: HKCIF), a JSE listed investment holding company, which directly and indirectly owned 49.5% of the shares, excluding treasury shares. The Hosken Consolidated Investments (“HCI”) shareholding provides the bulk of the Broad-based Black Economic Empowerment (“B-BBEE”) ownership at group level.
With the cessation of the pension fund contribution holidays and longer hours of operation due to the lifting of COVID-19 regulations, remuneration costs have increased.
The cost of diesel and other consequential losses due to high levels of load shedding, eroded margins in the second half of the year.
As a result of unprecedented levels of load shedding, high fuel and food prices, and increased interest rates, revenue is expected to remain under pressure in the short term. What is of concern is whether generators can sustain the workload as the pressure of load shedding mounts. Preventative maintenance has been stepped up and the casinos have ordered generators with a combined cost of approximately R30 million. This is in order to prevent a complete shutdown in the event of equipment failure.
Stages 5 and 6 of load shedding impacted revenue, with customers being increasingly more reluctant to travel at night.
Significant positive net cash was generated by operations, with cash managed effectively.
A good reduction in finance costs was achieved, despite repurchase (repo) rate increases.
Regardless of all the negative impacts experienced, the group is in a strong financial position.
The management of all the hotels is now in-house and Tsogo Sun plans to improve and expand its hotel offering. The Silverstar hotel has been expanded from 43 to 55 rooms from April 2023 and a complete refurbishment of the two hotels at Gold Reef City Casino and Theme Park has been completed and includes new world class conference facilities. In addition, Tsogo Sun has taken up an approximate 10% shareholding in City Lodge (JSE: CLH / OTCMKTS: CTYLF).
Developments within the digital, online and technology space are progressing well, and the group envisages having more visibility in the market in this regard in the 2024 financial year. playTSOGO, the Tsogo Sun online betting platform, was launched in December 2022 with a unique and quality product offering. The expansion of betting libraries is underway, creating an exciting adventure in the Tsogo Sun online betting division.
Africa's biggest casino operator Tsogo Sun Gaming has become one of the top five investors in leading South African hotel chain City Lodge, with a 5% stake, share ownership data showed.
The stake, acquired by HSS Investments and Entertainment Holdings, two subsidiaries of Tsogo Sun Gaming, could herald the casino operator's return to the hotel business, reversing its split into two separate entities - casinos and hotels - in 2019.
Jean Pierre Verster from Protea Capital Management chose Tsogo Sun Gaming as his stock pick of the day and Rowan Williams from Nitrogen Fund Managers chose KAAP AGRI.
Disclaimer. The information and views contained on this website and newsletter is provided for informational purposes only and does not constitute investment advice and/or a recommendation. Your use of any content is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the content. Seek a duly licensed professional for any investment advice. I may have positions in the investments covered. This is not a recommendation to buy or sell any investment mentioned.
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Tsogo Sun Ltd (JSE: TSG / FRA: G5E): Africa's Biggest Casino Operator is Getting Bigger
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Tsogo Sun Ltd (JSE: TSG / FRA: G5E) is South Africa’s largest hospitality company, the only casino, hotel and entertainment group in the top 100 companies of the JSE, and it’s Africa’s biggest casino operator. The Company recently reported earnings:
Tsogo Sun Gaming delivers bumper annual dividend post-Covid with an eye on hotel expansion (IOL) May 2023
Africa's biggest casino operator, Tsogo Sun Gaming, declared a bumper annual dividend on Thursday as it raked in higher earnings post-Covid and expands its hotel footprint, despite its income being dented by load shedding.
OVERVIEW:
Prior to 2011, Tsogo Sun Holdings owned and operated two divisions: Southern Sun Hotel Interests and Tsogo Sun. On 24 February 2011, Tsogo Sun Holdings concluded a merger with and reverse listing through Gold Reef Resorts. Since the unbundling of its business into separate hotels and gaming interests in June 2019, Southern Sun (JSE: SSU) and Tsogo Sun have been listed separately on the JSE (See: Southern Sun (JSE: SSU): Almost Normalcy for Southern Africa's Leading Hospitality Stock).
Tsogo Sun is a premier hospitality group with a portfolio that encompasses casinos, hotels, event venues, theatres, restaurants, bars, a theme park, a bird garden and more. It has a significant presence in the gambling industry in South Africa, with premier casino and entertainment destinations, Galaxy Bingo sites, VSlots limited payout machines (“LPMs”), and bookmaker licenses. In addition, the group owns hotels, a theme park, theatres, cinemas, and conference facilities.
The Key shareholder is Hosken Consolidated Investments Limited (JSE: HCI / OTCMKTS: HKCIF), a JSE listed investment holding company, which directly and indirectly owned 49.5% of the shares, excluding treasury shares. The Hosken Consolidated Investments (“HCI”) shareholding provides the bulk of the Broad-based Black Economic Empowerment (“B-BBEE”) ownership at group level.
Tsogo Sun Corporate History Video (YouTube) 12:54 Minutes - Feb 2014
A look back at the history of Southern Sun / Tsogo Sun.
RECENT FINANCIALS / NEWS:
Reviewed Financial results for the year ended 31 March 2023
With the cessation of the pension fund contribution holidays and longer hours of operation due to the lifting of COVID-19 regulations, remuneration costs have increased.
The cost of diesel and other consequential losses due to high levels of load shedding, eroded margins in the second half of the year.
As a result of unprecedented levels of load shedding, high fuel and food prices, and increased interest rates, revenue is expected to remain under pressure in the short term. What is of concern is whether generators can sustain the workload as the pressure of load shedding mounts. Preventative maintenance has been stepped up and the casinos have ordered generators with a combined cost of approximately R30 million. This is in order to prevent a complete shutdown in the event of equipment failure.
Stages 5 and 6 of load shedding impacted revenue, with customers being increasingly more reluctant to travel at night.
Significant positive net cash was generated by operations, with cash managed effectively.
A good reduction in finance costs was achieved, despite repurchase (repo) rate increases.
Regardless of all the negative impacts experienced, the group is in a strong financial position.
The management of all the hotels is now in-house and Tsogo Sun plans to improve and expand its hotel offering. The Silverstar hotel has been expanded from 43 to 55 rooms from April 2023 and a complete refurbishment of the two hotels at Gold Reef City Casino and Theme Park has been completed and includes new world class conference facilities. In addition, Tsogo Sun has taken up an approximate 10% shareholding in City Lodge (JSE: CLH / OTCMKTS: CTYLF).
Developments within the digital, online and technology space are progressing well, and the group envisages having more visibility in the market in this regard in the 2024 financial year. playTSOGO, the Tsogo Sun online betting platform, was launched in December 2022 with a unique and quality product offering. The expansion of betting libraries is underway, creating an exciting adventure in the Tsogo Sun online betting division.
Tsogo Sun snaps up 5% stake in City Lodge (IOL) May 2023
Africa's biggest casino operator Tsogo Sun Gaming has become one of the top five investors in leading South African hotel chain City Lodge, with a 5% stake, share ownership data showed.
The stake, acquired by HSS Investments and Entertainment Holdings, two subsidiaries of Tsogo Sun Gaming, could herald the casino operator's return to the hotel business, reversing its split into two separate entities - casinos and hotels - in 2019.
WATCH: Stock picks - Tsogo Sun Gaming & KAAP AGRI (Youtube) 2:48 Minutes (Business Day) November 2022
Jean Pierre Verster from Protea Capital Management chose Tsogo Sun Gaming as his stock pick of the day and Rowan Williams from Nitrogen Fund Managers chose KAAP AGRI.
KEY RATIOS:
P/E (Google Finance): 7.70 / Trailing P/E (Yahoo! Finance): 7.57 (no forward P/E)
Dividend Yield (Google Finance): 6.78% / Forward Dividend & Yield (Yahoo! Finance): 8.36%
1 YEAR CHART:
LONG TERM CHART:
ADDITIONAL RESOURCES:
Website
Investor Relations
Wikipedia
Tsogo Sun Corporate History Video (YouTube) 12:54 Minutes - Feb 2014
Reviewed Financial results for the year ended 31 March 2023
Tsogo Sun snaps up 5% stake in City Lodge (IOL) May 2023
WATCH: Stock picks - Tsogo Sun Gaming & KAAP AGRI (Youtube) 2:48 Minutes (Business Day) November 2022
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Disclaimer. The information and views contained on this website and newsletter is provided for informational purposes only and does not constitute investment advice and/or a recommendation. Your use of any content is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the content. Seek a duly licensed professional for any investment advice. I may have positions in the investments covered. This is not a recommendation to buy or sell any investment mentioned.