The South African hotel and casino group Peermont Global has announced that profits before taxation last year rose 42% to R402 million (US$64 million). Much of the increase was attributed to the acquisition of a further 20.7% interest in the Emperors Palace, which was bought from Caesars South Africa and contributed to nine months of the year’s figures. Gaming revenue for the period rose by 33% and non-gaming revenue by 41%.

Having expended R3.9 million (US$600,000) in 2005 on investigating the possibility of making a bid for one of the Singapore casino licences, Peermont decided not to pursue participation in the Request for Proposals (RFP). An evaluation of the costs, risks and benefits led the group to the conclusion that further participation was not in the best interests of its shareholders. Instead the group announced on 21 December that it would acquire The Tusk Resorts Group for a maximum R583 million (US$92.8 million) to be implemented around 21 June 2006, subject to approval by the South African competition authorities and the North West Gambling Board.

Peermont operations in Botswana were affected by the devaluation of the pula but showed revenue growth of 42%. The launch of the new Metcourt Inn in February 2005 and the acquisition of the Syringa hotels in Gabarone and Francistown the following month did much to offset the slower growth in gaming revenue caused by pressure on disposable income due to higher inflation levels in the country. Over the past year Peermont has upgraded and refurbished its South African property in San Lameer, started construction on a Free State operation in Bethlehem and is finishing construction of a hotel at Emperors Palace expected to open later this month.

2005 saw substantial investment for future growth by Peermont, which has already started to contribute towards increased earnings. Having acquired a controlling interest in Tusk Resorts’ four casinos and one hotel, additional hotels will be built at the casino properties Tusk Rio in Klerksdorp and Tusk Umfolozi in Richards Bay. It is expected that revenue and profit will continue to grow throughout 2006. (E-03.10.06)

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