Not sunshine and roses

It’s hard to avoid the suspicion that a company that slips out a trading update as the market closes on a Friday afternoon may not be overly keen on garnering the maximum attention.

Presumably the hope is that at that stage the market is more focused on grabbing a few of Charles Glass’s finest than on trawling through the Sens announcements, and by the time everybody’s back at the desk on Monday morning something else will have come along to catch the eye.

This was the time that Sun International chose to announce that its headline EPS were expected to come in at a fat loss for the year, and to issue a business update that was an awfully long way short of being perky and upbeat. (See page 42.)

The gloom was attributed to challenging trading conditions in its SA and Latin American operations, with political uncertainty and weak business confidence in SA and low growth in Chile slashing disposable spending. Its Monticello casino in Chile was closed for a while after a customer dropped his life savings on the roulette table, pulled out a gun and shot a number of staff members.

Sun International has pulled out of Colombia and scaled down its operation in Panama, while its newly opened Time Square development in Gauteng has been trading well below expectations.

All this has meant that its debt is getting mighty close to bumping up on its covenant levels, and the group has announced a rights issue to de-risk the balance sheet and give it a bit of headroom to get the business back on track.