Marc Hasenfuss: Market Watch

increase in operating profits to R137m. Sun will do well to pursue bolt-on deals, and prepare Sunbet for the inevitable onset of online gaming.

The hand Sun appears likely to play sooner rather than later (albeit as a prudent fold rather than a brave bluff) is in the newly categorised “operations under review” (OUR). Tucked away under OUR are the Carousel, the swanky Table Bay and Maslow hotels, the old Morula casino (its licence will be transferred to The Time Square), the Naledi in Thaba Nchu and the Fish River Sun. Tagging businesses as OUR suggests disposals are likely sooner rather than later.

The opening of Time Square will not only close the Morula casino, but also (in Sun’s words) “severely impact” the Carousel, north of Pretoria. Sun adds that “all options, including disposal, are being considered for the Carousel, which will need to be downscaled when Time Square opens.”

I’m really not sure what Sun wants to do with its two upmarket hotels. The Table Bay Hotel lease expires in May 2022 and discussions are under way, including the possibility of early renewal. The Table Bay performed fairly robustly, with revenue growth of 23%. Occupancies were up 11% to 74% and the average room rate increased 13%. It managed operating profits of R51m from turnover of R310m, which might get the attention of leisure-inclined real estate contenders. The situation at the Maslow is a little different, though there was a 7.5% increase in occupancy to 68% and the room rate increased 5.2% to R1,182. However, the property posted a R48m loss, with Sun confessing that the financial obligations of the long-term lease were onerous.