• Continuing income for the period up 5.0% to R6.0 billion
• Continuing adjusted EBITDA up 4.0% to R1.6 billion, with adjusted EBITDA margin at 27.3%
• Record Sunbet income up 71.8% to R512 million
• Sun City adjusted EBITDA, pre-management fees, of R193 million
• 66.7% of R1.7 billion cash generated by South African operations converted to free cash
• 104.8% of adjusted EBITDA converted to cash generated by South African operations
• Debt to adjusted EBITDA at 1.6x, well within bank covenant of less than 3.0x
• Earnings per share (EPS) up 97.1% to 337 cents per share
• Adjusted headline earnings per share (AHEPS) up 9.1% to 215 cps
• Interim dividend of 161 cps up 8.8%

Sun International has delivered a robust trading performance in a fast-changing gaming and hospitality environment, underpinned by the strength of its diversified operating model, the resilience of its omnichannel portfolio, and disciplined strategic execution. Sunbet continued its phenomenal growth trajectory, with income surging by 71.8% and surpassing once again its aggressive growth targets.

The performance of the group and the successful execution of its strategy of growing its online gaming business and omnichannel offering has yielded a continuing adjusted EBITDA of R1.6 billion, up 4.0%, with group adjusted headline earnings up 8.7% to R524 million. Adjusted headline earnings per share  up 9.1% to 215 cents per share when compared to the prior period.

The group’s income for the period increased by 5.0%, to R6.0 billion. Gaming income, which constitutes 77.4% of the group’s total income, demonstrated sustained growth, increasing by 3.4%.

The group’s 5.0% increase in income, combined with effective cost control, yielded a continuing adjusted EBITDA margin of 27.3%, which was in line with the prior period. This consistency highlights the effectiveness of cost optimisation initiatives implemented by the group and lower diesel costs following the reduction in load shedding.

The group is in a strong financial position, with South African debt (excluding IFRS 16 lease liabilities) at R5.4 billion, down from R5.7 billion as at 31 December 2023, with debt to adjusted EBITDA at 1.6 times. The debt levels take into account the payment of the 2023 final net dividend of R510 million.

As part of its shareholder value proposition, the group strategically bought back 3 871 138 Sun International ordinary shares in the open market at an average price of R36.54 per share during the period.

In line with Sun International’s dividend strategy to provide its shareholders with an appropriate, sustainable pay-out over the long term while maintaining a targeted debt to adjusted EBITDA ratio of two times and a dividend pay-out ratio of 75% of adjusted headline earnings per share, the board has resolved to pay an interim gross cash dividend of 161 cents per share, totalling R416 million.

The proposed acquisition of Peermont Holdings Proprietary Limited, which received overwhelming shareholder approval on 4 March 2024, is progressing well. Sun International has received credit approved funding from its current lenders, for the total enterprise value of R7.3 billion. The group awaits Competition Commission and Gambling regulator approval for the proposed acquisition, with a likely outcome in the first quarter of 2025.

Urban casino income was up 0.5%, with adjusted EBITDA, pre-management fees, of R1.1 billion for the period. The group‘s larger properties have continued to grow and protect margins, while regional properties lacked topline income growth. The adjusted EBITDA margin, pre-management fees, of 33.1% was down 1.6 % on the prior comparative period.

Leeming said, “We remain focused on enhancing the customer experience through our services and products to ensure that our acquisition and retention strategies result in sustainable revenue growth.“

 Overall income for Sunbet, at R512 million, delivered a record adjusted EBITDA, pre-management fees, of R170 million (up 88.9% on the prior comparative period). Active players continued to grow, with additional games being offered and the overall player experience being enhanced.

While customer acquisition is key, retention of long-term players will deliver profitable results for Sunbet.  At the end of the period under review, Sunbet achieved substantial growth in its key performance indicators against 2023, which included:

• unique active players up 72.2%;
• first time depositors up 111.6%; and
• deposits up 74.2%.

“Sunbet, as one of the fastest growing companies in the online market, presents the group with significant and exciting growth potential. With this in mind, we continue to invest in our people and invested in a new website front-end look and feel, which is more user-friendly, with a marketing campaign tying in the iconic Sun City to complete its brand relaunch. The improvements to the registration, customer deposit, and withdrawal processes, as well as an overhaul of the customer contact centre means our customers interact with us seamlessly,“ said Leeming.

Sun Slots, a strategic business in the group’s gaming portfolio, has shown the impact of the difficult economic environment, including challenges such as a slow rollout of licenses. Sun Slots achieved income of R686 million, generating adjusted EBITDA of R162 million and an improved margin of 23.6% when compared to 23.2% in the prior period.

The group has made several strategic interventions to address the current challenges and ensure Sun Slots is well-positioned to capitalise on an economic recovery.

Hospitality income (excluding casino income) from resorts and hotels exhibited exceptional growth, increasing by 12.3%, as Sun City and Table Bay enjoyed the benefits of local and international travel.

Total resorts and hotels income was up 6.2% to R1.5 billion on the prior comparative period. Overall, an adjusted EBITDA, pre-management fees, of R346 million was achieved, which is an improvement from the R314 million in the prior period.

Leeming said, “The gaming industry is experiencing dynamic changes and Sun International, through Sunbet, will continue leveraging our strong brand and market presence to expand our customer base. Our balance sheet remains robust, providing us with the financial flexibility to invest in growth opportunities. Through strategic planning, efficient capital allocation, cost management, and a focus on operational excellence, Sun International will sustain its growth trajectory and preserve stakeholder value.

 “We expect the recent government initiatives aimed at stimulating economic activity and improving infrastructure including the stabilisation of the electricity supply, easing inflation and lower interest rates to create a more favourable operating environment in the medium to long term.“