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Reviewed condensed consolidated financial results
for the year ended 31 March 2020
Tsogo Sun Gaming Limited
(Incorporated in the Republic of South Africa)
(Registration number 1989/002108/06)
Share code: TSG ISIN: ZAE000273116
("Tsogo Sun" or "the company" or "the group")
Reviewed condensed consolidated financial results
for the year ended 31 March 2020
Income R11.7 billion up 1%
Ebitdar R4.0 billion down 1%
Operating profit R1.0 billion down 67%
Final dividend per share Nil
Total dividends per share paid 26.0 cents down 86%
Net asset value R1.8 billion down 83%
EPS 19.6 cents down 87%
HEPS 124.7 cents down 32%
Adjusted HEPS 137.6 cents down 24%
Adjusted HEPS continuing operations 134.5 cents down 14%
Review of operations
The group unbundled its entire holding in Tsogo Sun Hotels Limited
to its shareholders on 14 June 2019 by way of a distribution in specie.
The effective disposal date when the board approved the distribution was
on 23 May 2019, and, in terms of IFRS 5 Non-current Assets Held for Sale
and Discontinued Operations, the group has accounted for the hotels division
as held for distribution to owners. The commentary that follows thus relates
to the gaming business remaining in the group.
The spread of the Covid-19 virus and government's subsequent regulatory
restrictions negatively impacted the business. Trading until Sunday,
15 March 2020 was solid and the group was on track to show growth on the
prior year. The negative impact became directly evident following the
President's speech and deteriorated significantly with sites operating with
limited capacity due to increasing regulatory restrictions. As a result of
the lockdown measures announced on 23 March 2020 all sites were closed to
the public by Wednesday, 25 March 2020 to allow for the properties to be
secured.
Total income for the year of R11.7 billion ended only 1% above the prior
year mainly as a result of the impact of the regulatory restrictions
implemented in response to the Covid-19 pandemic during March 2020 which
reduced the annual income growth by approximately 3%.
Earnings before interest, income tax, depreciation, amortisation, long-term
incentives and exceptional items ("Ebitdar") at R4.0 billion was 1% down on
the prior year as a result of the negative impact in the last two weeks of
March of Covid-19.
Exceptional losses of R2.0 billion for the year relate mainly to impairments
of intangibles of R1.9 billion which is a result of the adjusting post-balance
sheet event of the extended lockdown of the business and the risk-based strategy
implemented by government without certainty for our sector.
Interest-bearing debt net of cash at 31 March 2020 totalled R11.2 billion at
a debt: Ebitda ratio of 2.96 times. The lenders have agreed to the waiving of
financial covenants for the September 2020 measurement period and deferring
interest payments for three quarters to provide the group with additional
liquidity.
The hospitality and tourism industries have been impacted the most as a result
of the Covid-19 pandemic. The group is currently faced with the uncertainty of
when its various divisions (casinos, bingo and LPMs) will be able to commence
trade and if so, under which restrictions. However, the business has developed
a robust strategy of enhanced hygiene and social distancing which will enable
it to operate successfully with its loyal customer base, when provided the
opportunity to do so.
The contents of this short form announcement are the responsibility of the
board of directors of Tsogo Sun. The information in this short form
announcement has been extracted from the reviewed condensed consolidated
financial statements, but the short form announcement itself is not reviewed.
Any investment decisions by investors and/or shareholders should be based on
consideration of the full announcement as a whole and shareholders are
encouraged to review the full announcement, which is available at
https://senspdf.jse.co.za/documents/2020/jse/isse/TSGE/FY20.pdf and on the
group's website at https://www.tsogosun.com/gaming. In addition, copies of the
full announcement may be requested from the company's registered office, at no
charge, during office hours by contacting the Company Secretary at Private
Bag X200, Bryanston, 2021.
9 June 2020
Sponsor
Investec Bank Limited, 100 Grayston Drive, Sandton, 2196
(PO Box 785700, Sandton, 2146)
www.tsogosun.com/gaming
Date: 09-06-2020 05:24:00
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