As details were emerging about yesterday’s raid by around a dozen armed robbers on the Emperors Palace Casino, South African Peermont Global announced first-half headline earnings per share (HEPS) had increased by 52%. Fortunately no one was hurt in the raid at Emperors Palace, previously known as Caesars Gauteng, but an undisclosed amount of cash was taken. Last month the company had published assurances that a strike by members of the Food and Allied Workers Union had not impacted revenues, and staff returned to work on August 20 after agreement on wages ended the eight-day strike.

Just as other South African gaming companies have seen revenues surge from increased consumer confidence and larger disposable incomes, Peermont Global has seen a 26% rise in turnover to R560.8 million (US$90.12) from strong gaming revenue. The company operates resort casinos at Secunda, Mpumalanga (Graceland) and Gabarone, Botswana (The Grand Palm) apart from Emperors Palace in Johannesburg, and was floated on the Johannesburg Stock Exchange a year ago. The Group revenue increase has been largely due to the increased stake in Emperors Palace following the successful buyout of the interest held by Caesars Entertainment, Inc.

There are future expansion plans for gaming and hotels at existing properties, and in Botswana the acquisition of the Syringa properties and construction costs for the Metcourt Inn have caused a significant increase in finance costs. Peermont Global completed the Request for Concept (RFC) and was accepted to continue to the Request for Proposal (RFP) stage by the Singapore Government for an Integrated Resort. It is one of twelve companies considering a bid but will evaluate the RFP document, expected to be issued at the end of this month, before deciding whether to proceed.

A casino project in Bethlehem may see construction commence in November if approval is granted next month by the Free State Gambling and Racing Board. Construction of a 150-room hotel at Emperors Hotel, scheduled to open next January, should increase conference and convention business. An additional 140 slots and 17 tables at Emperors Palace acquired last October were only moved to their permanent position in July, so gaming revenue was not maximised during the first half of the year owing in some part to disruption at the facility. Peermont Global predicts that earnings for the full year will be on track, as economic fundamentals remain positive. (E-09.05.05)

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