Gareth Vorster

Gaming, resorts and hotel group Sun International said on Friday that it would maintain capital expenditure at about R1 billion, having reached R1.031 billion over the past year.

"We will keep capex similar to last year, with no big jumps on spend.

"We have a number of big commitments ahead, but they will be over a gradual period," said chief executive David Coutts-Trotter.

Sun International on Friday reported a 12% drop in its full year headline earnings per share to 562 cents from 636 cents previously.

Revenue for the year to end June 2010 declined 1% from last year to R8 billion, while comparable revenue, excluding Monticello in Chile and the Federal Palace in Nigeria, was 3% lower.

Gaming revenue was in line with last year at R6.2 billion while rooms revenue declined by 5%.

Operating profit declined by 13% to R1.6 billion while EBITDA of R2.5 billion was 7% lower than last year.

Profit for the year was 5% lower at R665 million and earnings per share were flat at 552 cents, compared to 566 cents a year ago.

Room revenue of R857 million declined by 5% from last year.

Group occupancy was down 5% at 67% and an average room rate of R898 was achieved, which was a marginal decline on last year.

Coutts-Trotter said that while the popularity of the company's properties remained high and footfalls were strong, spend per customer declined across the board and comparable gaming revenue decreased by 2% from last year as customers continued to feel economic pressure.

He told I-Net Bridge: "On the hotel/resort side, the past 18 months in particular have been difficult, with occupancy and rates under pressure and still showing a decline.

"The situation hasn't arrested itself yet," he said. "Against this backdrop, we are not unhappy with the results.

"However, it is still going to take three to four years to get back to where we were three to four years ago, in real terms," he said.

On the hospitality side, Coutts-Trotter said that bookings, forward looking, were better, however he added that a total recovery internationally would only be seen in 2013.

"Notwithstanding this, some growth in revenue is expected from existing operations in addition to greater contributions from Monticello and the Federal Palace. Accordingly, the group expects growth in adjusted headline earnings per share," he said.

Following the earthquake in February, Monticello closed for repairs, re-opening on 30 June.

The company resumed dividend payments by declaring a dividend of 100 cents a share.

At 3.30pm Sun International had gained R1.75 or 2.06% at R86.75 on the JSE.

Source: I-Net Bridge