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Prepared Comments for the Southern Sun Annual General Meeting and a Preliminary Trading Statement
Southern Sun Limited
Incorporated in the Republic of South Africa
Registration number 2002/006356/06
Share Code: SSU ISIN: ZAE000272522
(“Southern Sun” or “the Company” or “the Group”)
PREPARED COMMENTS FOR THE SOUTHERN SUN ANNUAL GENERAL MEETING AND A PRELIMINARY TRADING
STATEMENT FOR THE SIX MONTHS ENDING 30 SEPTEMBER 2023
The Southern Sun Annual General Meeting is scheduled for 10am, 20 September 2023 and the following
information is released in the interest of all shareholders.
Trading volumes in South Africa have continued to improve in the first five months of the financial year ending
31 March 2024, particularly when compared to the prior comparative period which was still impacted by the
Omicron variant of Covid-19 with restrictions only entirely lifted on 22 June 2022. Aided by more normalised
demand from local and international travellers and strong demand for conferencing and events, Group
occupancy at 55.3% for the five-month period ending August 2023, has increased by 11.1pp compared to 44.2%
in the prior comparative period and is only 1.9pp below the 57.2% achieved for the same five-month period in
2019, being pre Covid-19. The Group’s average room rate has increased by 13% for the five-month period ending
August 2023, compared to the prior comparative period and by an encouraging 26% compared to the same five-
month period in 2019. The improvement over the pre Covid-19 period is achieved through a combination of
higher achieved yielding and a change in the mix of hotels with the consolidation of a number of previously 3rd
party leased properties.
Improved trading has been particularly prevalent in the Western Cape, which has enjoyed several large events
hosted at the Cape Town International Convention Centre such as the recent Netball World Cup. In Gauteng, the
Group proudly hosted the 15th BRICS summit in August 2023 at the Sandton Convention Centre, which led to
substantial demand for accommodation at the surrounding hotels. In addition, most regions have seen good
transient demand, with a substantial portion of the Group’s hotels trading above pre Covid-19 levels. Certain
hotels in the Sandton and Rosebank nodes and the Group’s budget offering, Sun1, have not fully recovered but
are showing improvement as the year progresses. Hotels in Maputo and Lusaka in the Group’s offshore division
have not traded in line with expectations and are impacted by developments or lack thereof, in the oil and gas
sectors and other mining activities, while Paradise Sun in the Seychelles has performed in line with expectations
in the five months. Results from the Group’s associate companies in the United Kingdom have been encouraging
with trading and profitability being above pre-Covid levels. The Group has continued to maintain good cost
controls, with specific focus on ensuring that the significant savings achieved through the restructuring during
the Covid-19 period are not lost.
As previously announced, an additional 89 million shares were bought back in May and June of this year which,
together with shares acquired in the prior financial year, has reduced the overall shares in issue net of treasury
shares by just over 100 million shares or 6.7%.
The Group is encouraged by these results and indications are for a strong summer tourism season, but remains
cautious as the challenges of loadshedding, fiscal constraints on government and the overall poor state of the
South African economy continue. Traditionally, the majority of the Group’s profits are earned in the second half
of the financial year.
Shareholders are reminded that the Group received a once-off payment of R399 million (R313 million after tax)
from Tsogo Sun Limited on implementation of the Separation Agreement on 30 September 2022 (“Separation
Payment”). This gain was included in the comparative numbers for Earnings per share (“EPS”) and Headline
Earnings per share (“HEPS”) and excluded for Earnings before interest, tax, depreciation, amortisation, rentals
and exceptional items (“EBITDAR”) and Adjusted Headline Earnings per share (“AHEPS”).
Preliminary Trading statement
In terms of paragraph 3.4(b) of the JSE Limited Listings Requirements, a listed company is required to publish a
trading statement as soon as it is reasonably certain that the financial results for the next period to be reported
on will differ by at least 20% from those of the prior comparative period, being 30 September 2022. The Group
accordingly provides the following preliminary ranges, based on management accounts to 31 August 2023 and
an estimate of September trading, and excludes any potential impact of management’s assessment of
investment property fair values or impairments or reversal of impairments of property, plant and equipment.
Continuing
operations for the Range for the six
Note six months ended Change on months ended
30 Sep 2022 30 Sep 2022 30 Sep 2023
Revenue (Rm) 1 2 082 Increase of 29% to 39% 2 690 – 2 890
EBITDAR (Rm) 1 449 Increase of 54% to 74% 690 – 780
EPS (cents) 2 22.0 Decrease of 21% to 34% 14.5 – 17.4
HEPS (cents) 2 22.7 Decrease of 23% to 36% 14.5 – 17.4
AHEPS (cents) 3 1.2 Increase > 100% 14.5 – 17.4
1) Excludes the Separation Payment of R399 million pre-tax
2) Includes the Separation Payment of R313 million post-tax
3) Excludes the Separation Payment of R313 million post-tax
The ranges provided will be updated if required and Southern Sun is currently scheduled to release its financial
results for the six months ending 30 September 2023 on or about 21 November 2023.
The financial information in this trading statement has not been reviewed and reported on by the Group’s
external auditors.
20 September 2023
Sponsor
Investec Bank Limited
Date: 20-09-2023 08:00:00
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