Tsogo Sun takes a hit from Covid-19

TSOGO Sun Gaming took a broadside hit from Covid-19 regulations and compliance in the year to March, which shaved 51 percent off income to R5.7 billion, and resulted in a headline loss of 102 percent to a paltry R32 million and a headline loss per share of 103 percent to 3.1 cents a share.

With earnings per share down 90 percent at 2c per share, the group decided not to declare a dividend in the year to March, as it grapples with the losses and further potential hits to its bottom line with a supposed third wave in the offing.

All the group’s businesses were closed for the first quarter of the 2021 financial year and reopened in a staggered manner. Not all businesses were fully operational as yet, with the curfew, in particular, adversely affecting the businesses reliant on late evening trade, the group said.

The casino division experienced a difficult 2021 financial year with its significant fixed cost base. The division focused on improving the structure and efficiency of the business while reducing its operating expenses, which was critical in enabling the division to generate the positive cash required to assist the group to reduce its significant debt burden.

The bingo division faced the same restrictive environment as that of the casino division, but because of the smaller scale and lower overheads of bingo versus casinos, the bingo division was better placed to cope with the restrictive environment.

Tsogo Sun opted to waive its 2021 covenants and reset short-term ones for September.