Grand Parade Investments (GPI) narrowed its annual headline loss for the year as its gambling assets recovered, saying on Friday that it is well positioned to capitalise on the expected improvement in trading conditions over the next year.
In its financial results for the year ended June 30, 2022, GPI said headline loss for the year improved by R13.3 million, 49% up from a loss of R27m, to a loss of R13.7m.
“The headline loss in the current year includes an impairment against the inter-company loan with Mac Brothers, expected credit loss, and a write-off of receivables, which was realised when control of the subsidiary was lost, as a result of the liquidation of the company,” the group said.
“The positive performance of the group was underpinned by the turnaround of the gaming assets, which had been impacted by Covid-19 and the related lockdown restrictions in the prior year,” it said.
On October 1, 2021, South Africa moved to alert level 1, which allowed businesses to trade with no curfew. Capacity restrictions remained in place for the most part of the year, which together with rising inflation and sustained power outages prevented a full recovery of the gaming businesses.
GPI said despite this the gaming assets contributed R107.9m to headline earnings over the year, an increase of R34.9m (48%), compared to the prior year.
During the year, GPI said it had made good progress on the implementation of its strategy to unlock value, which was showcased by the completion of the Burger King South Africa (BKSA) sale and the unbundling of the group’s interest in Spur Corporation.
“Together these initiatives allowed the group to return R1.25 per share to shareholders and reduce debt by 41% or R95.9m,” it said.
Mac Brothers had continued to perform poorly, resulting in the decision to place the business under voluntary liquidation on April 4.
“Excluding the impairment of the Mac Brothers loans and write-off of receivables, the adjusted headline earnings per share increased by 17.43 cents to 11.14 cents per share, from a headline loss of 6.29 cents per share in the prior corresponding period,” the group said.
Headline loss per share decreased by 49% to 3.20 cents per share, from 6.29 cents per share in the prior corresponding period.
Revenue from continuing operations increased by R16.5m to R17.5m from R1m in the prior corresponding period.
An ordinary final dividend of 12 cents per share was declared for the year, with no final ordinary dividend declared in respect of the previous 2021 financial year.
“During the current 2022 financial year, the group also declared and paid a special dividend of 88c per share and unbundled its interest in Spur Corporation through a dividend-in-specie which amounted to 37c per share,” GPI said.
It said management’s continued efforts to reduce costs also had contributed to the improvement in its performance. Central costs decreased by a further 12% over the year. Corporate costs, excluding transaction and finance-related costs, decreased by 18% over the year, while finance costs reduced by 56% due to the decrease in overall debt.
Talking about its prospects, GPI said it was now left with its 15.1% interest in SunWest, 15.1% interest in Golden Valley Casino, 30% interest in Sun Slots and two non-core properties.
It said the gaming businesses had performed extremely well following the lifting of all Covid-19-related restrictions, saying that Sun Slots, in particular, had been resilient to the tough trading restrictions and had surpassed pre-Covid-19 levels.
“We expect trading conditions to continue to improve over the second half calendar year as international travel improves, which will assist the recovery of GrandWest and the Table Bay Hotel. All GPI’s gaming businesses have resumed dividend payments and are well positioned to capitalise on the expected improvement in trading conditions over the next year,” it said.
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