GPI expects better annual results as it pares debt, sees a recovery

JSE-LISTED Grand Parade Investments (GPI), an empowered investment company, said yesterday that for the year ended June 30, 2022, its adjusted headline earnings per share improved due to a recovery in the gaming assets and a reduction in corporate costs, which decreased as a result of the debt reduction.

In its trading update for the year ended June 30, 2022, the group said headline loss per share was expected to be between 2.75 cents and 4c, representing an improvement of between 56% and 36% compared to the headline loss per share for the group of 6.29c reported for the previous year.

Loss per share for the group will be between 1.55c and 2.93c, representing an improvement of between 77% and 57% compared to the loss per share for the group of 6.75c reported for the year ended June 30, 2021.

In May, GPI announced that it had completed its exit from the food businesses. It unbundled its 9.28% interest in Spur Corporation, unbundled its Burger King South Africa accounts, and placed Mac Brothers under voluntary liquidation.

The group said if the impairment of the Mac Brothers loans and writeoff of receivables are excluded, then adjusted headline earnings per share for the group would be between 10.36c and 11.62c representing an increase of between 16.65c and 17.91c compared to the headline loss per share for the group of 6.29c reported for the previous year.

“On April 4, 2022, Mac Brothers was put into voluntary liquidation with a liquidator appointed by the Master of the High Court. In accordance with IFRS 10, Mac Brothers have been deconsolidated from the group.

“In accordance with IFRS 9, the group is required to impair its intercompany loans and write-off receivables held with Mac Brothers at the end of the period. This resulted in impairment or loss of R61.7 million being accounted for in the financial year. In terms of IFRS 9, this non-cash, non-recurring loss must be included in headline earnings,” GPI said.

GPI said for the reported financial year Burger King South Africa and Grand Foods Meat Plant would be treated as discontinued operations as the sale of these assets was concluded on November 3, 2021.

GPI financial results will be published on or about September 30.

GPI shares closed at R2.99, 0.34% up on the JSE yesterday, and have increased by 8.76% in the past year.