A reduction in Gold Reef Casino Resorts’ bottom line of 7.3 million rand was caused by the company’s first-time adoption of International Financial Reporting Standards (IFRS), but its headline earnings per share (HEPS) rose by 9.9% in the first six months of 2005. The South African company operates casinos at Gold Reef City in Gauteng; Pietermaritzburg (the new capital of KwaZulu-Natal); north of Cape Town; Mossel Bay on the Garden Route; and in Welkom. GRCR is also in line to acquire the sixth and final casino licence in Gauteng with an option to buy Silverstar Development when the environmental impact studies are completed.

From being debt-free in December 2004 the company reported a net external debt increase of R151.8 million (US$23.52) to June 2005. Like many companies in the global gaming industry, GRCR was looking for consolidation opportunities when it purchased a 9.9% stake in Johnnic Holdings. When the company learned that the HCI investment group was also buying Johnnic shares in an aim to take over the lucrative Tsogo Sun casinos, GRCR sold its stake in Johnnic to HCI for a R20 million profit, and since June has returned to a strong cash positive position.

The Gold Reef City Theme Park turned a previous profit of R7.8 million (US$1.21 million) into a loss of R0.8 million (US$0.12 million). This was attributed to unfounded bad press over safety issues causing a nearly 23% drop in visitor numbers. The Garden Route Casino remained as GRCR’s star performer with a 26% increase in revenue. CEO of GRCR, Steven Joffe, said that a favourable interest rate environment should support the group’s growth in the second half of 2005 and that its successful casino policy would continue. He also commented that GRCR intended to pursue strategic acquisitions. (E-08.25.05)

© Copyright 2005 CasinoCompendium



>>> return to archives
>>> return to frontpage