Yesterday South African hotel and casino company Sun International published a business update for the first quarter to 30 September 2008. The overall revenue growth of 3% the company describes as being reflective of the current economic climate. GrandWest, the big money generator in the past, had negative growth of 6%; Boardwalk experienced negative growth of 4%. Sibaya’s revenue was in line with the prior period, while Carnival City, Meropa and Morula performed well with revenue growth of 7%, 10% and 11% respectively.

After the lodge opened at Golden Valley the unit revenue was up 42% on last year. Revenue also grew at the hotel and resorts in Table Bay and Zambia, up 25% and 23% respectively. Room occupancy was down 2% at Sun City as there were fewer group convention bookings. Overall Sun International considers the first quarter results were satisfactory given the inflationary environment putting pressure on costs.

The opening last month of the Monticello Casino in Chile was on schedule. The casino will not trade at full capacity until construction on the West access road and further parking is complete but the numbers of people signing up for the group’s MVG casino loyalty programme are said to be encouraging. The retail and entertainment elements of the US$236 million casino complex in Mostazal should be ready around March 2009 and the 155-room hotel be finished in June.

In Nigeria the group is currently managing the Federal Palace Towers Hotel on Victoria Island, Lagos, and the refurbished 150 room Federal Palace Hotel was officially opened on 1 August 2008. The gaming licence is expected to be issued shortly, following which the group will acquire a 49.5% equity interest in the business for US$38 million. The development of the temporary casino will commence shortly thereafter and is anticipated to open by end March 2009, whereafter the Federal Palace Towers hotel will be closed for renovation. The total expected cost of the project remains unaltered at US$167 million.

Sun International is awaiting the result of its licence renewal application with the Eastern Cape Gambling and Betting Board for the Wild Coast Sun. The present licence expires in August next year. Submissions for the Boardwalk licence, which expires in October 2010, are due on 13 January 2010. Trading in the group's casinos in South Africa for the remainder of the first half is expected to remain challenging as a result of the difficult economic climate. However, the company believes this will be offset to some extent by the stronger growth in hospitality revenue. (E-11.06.08)

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