Sunbet is sizzling

Sunbet has achieved record income in the first half of the 2024 financial year as its owner, Sun International, cashes in on South Africa’s online betting boom.

This was revealed in Sun International’s interim results for the six months through June 2024, which were released on Monday, 9 September.

The results showed that Sun International delivered a robust trading performance, with the company’s income for the period increasing 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%. 

Casino income at the group’s four largest urban casinos grew by 2.2%, while the smaller regional casino growth remained challenging. 

Sun International’s hospitality income, which excludes casino income, from its resorts and hotels exhibited exceptional growth, increasing by 12.3%. 

However, Sun Slots’ income declined by 4.3% to R686 million compared to the prior period, but the company’s management said it has launched a range of initiatives to address this decline.

The real stand-out from Sun International’s results was Sunbet, the company’s online betting platform that continued its phenomenal growth trajectory, with income surging by 71.8%, surpassing its aggressive growth targets.

Overall income for Sunbet, at R512 million, delivered a record adjusted EBITDA, pre-management fees, of R170 million – up 88.9% from H1 2023.

Sun International explained that 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%
• Deposits up 74.2%

Sun International’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. 

The company attributed this to the effectiveness of cost optimisation initiatives implemented by the group and lower diesel costs following the reduction in load-shedding.

The net savings in diesel costs resulting from the reduction in load-shedding, and after accounting for additional electricity costs, was R36 million. 

“We continue to drive cost mitigation strategies, including investments per our renewable energy strategy,” the company said.

Sun International is in a strong financial position with South African debt at R5.4 billion, down from R5.7 billion as of 31 December 2023, with debt to adjusted EBITDA at 1.6 times. 

The company achieved a continuing adjusted EBITDA of R1.6 billion, up 4.0%, with group adjusted headline earnings up 8.7% to R524 million and adjusted headline earnings per share up 9.1% to 215 cents per share.

Sun International declared an interim cash dividend of 161 cents per share.