Tsogo Sun set to expand in KZN
SOUTH African hotel, gaming and entertainment group, Tsogo Sun, said yesterday that it was going to spend an additional R1.3 billion to expand the Suncoast Casino and Entertainment World in KwaZuluNatal.
The overall project cost is R1.6bn. The construction commenced in 2016, but was later interrupted and was stopped due to unexpected challenges.
However, construction is anticipated to re-commence in mid-June, subject to revised building approvals, with an anticipated eighteen months to completion.
Chief executive Marcel von Aulock said that the company would continue to invest in the economy and various expansionary projects, including the acquisition of two hotel businesses from the Liberty Group and through the acquisition of Hospitality Property Fund, have been undertaken.
“We have always been an acquisitive business. We are going to continue to look for possible acquisitions in the year ahead. It does not mean
“With a weak economy in South Africa and many of the commodity-focused countries in which we operate, trading is expected to remain under pressure.
“Our gaming and hotel focus leave the underlying operations of the group highly geared towards both the South African consumer and corporate markets. However, the high level of operational gearing presents significant growth potential to the group, should these sectors of the South African economy improve in the future,” said Von Aulock.
Nolwandle Mthombeni, an investment analyst at Mergence Investment Managers, said Tsogo Sun had delivered a good set of results.
“However, the casino industry is facing severe headwinds, due to low consumer confidence, and this leads to less spending and hotel occupancies are also under pressure. So to see some growth, although low, is commendable and is a testament to management efforts,” said Mthombeni.
Tsogo Sun’s share price dropped 1.02 percent on the JSE yesterday to close at R24.30.