Sun City-owner’s online betting boom continues

Sun City-owner Sun International expects to post strong financial results for the first half of its financial year as its online betting platform, Sunbet, continues to boom. 

The company releases a trading statement on Monday detailing its expected performance for the six months to the end of June 2024. Its interim results are set to be released in full on 9 September. 

Sun International said it delivered a robust trading performance in the six months, underpinned by the strength of its diversified income streams. 

The company has expanded rapidly into the online betting scene with Sunbet, which averaged R8.2 million in daily cash deposits in 2023. 

Its meteoric growth trajectory was sustained in the first six months of 2024, the company said. Sunbet continues to exceed the company’s targets. 

Interestingly, the company said this growth has not come at the expense of its traditional casinos, which have continued to grow and protect margins. 

This is despite a wider trend of South Africans increasingly gambling online and turning away from traditional casinos. 

Another area of the company’s business that has been under some pressure is its resorts and hotels, which have continued their recovery since the pandemic-era lockdowns. 

Sun International said this business segment achieved robust growth in the first half of 2024 and improved its margins. 

Thus, the company expects a marked improvement in its basic earnings per share, headline earnings per share, and adjusted earnings per share. This is shown in the table below. 

In its trading update, the company explained the significant differences between the different metrics. 

The company’s basic earnings per share include the second part of the R348 million sale of Dreams S.A.. 

The primary difference between HEPS and adjusted HEPS is the estimated increase in the value of the company’s SunWest put option of R48 million. 

This metric is also affected by R14 million worth of transaction costs relating to the proposed Peermont acquisition. 

Late last year, Sun International announced the acquisition of competitor Peermont Holdings for R7.3 billion. 

Founded in 1995, the Peermont Group has a reputation for its expertise in the design, development, management, and operation of multifaceted integrated resorts. 

This includes hotels, casinos, convention centres, retail spaces, health spas, restaurants, bars, and diverse sports and entertainment facilities. 

The Peermont Group’s properties house an impressive number of gaming machines and hotel rooms, encompassing 3,349 slot machines, 152 gaming tables, and 1,636 rooms. 

Sun International will acquire Peermont’s entire portfolio of 11 properties, including the iconic Emperors Palace resort and PalaceBet.