Covid-19 scuppers Grand Parade


Covid-19 scuppers Grand Parade

Published Date: 2020-09-25 | Source: Stephen Gunnion | Author: Stephen Gunnion

Covid-19 scuppers Grand Parade

The investment group says the pandemic eroded all the gains it achieved in the first half of the year.

Grand Parade Investments (GPI) says Covid-19 dominated the second-half of its financial year, reversing the gains made in the first six months. Under level 5 lockdown restrictions in April, all its operational businesses were closed - while its gaming-related businesses remained shut for even longer.

The investment group, which is selling assets to reduce debt and return capital to shareholders, said its Burger King fast-food franchise sold no burgers in April and was only permitted to resume home deliveries in May, with all service modes resuming in June. Its gaming businesses, including SunWest casino and Sun Slots, were closed from the end of March until the end of June and only resumed operations in July under restrictive operational controls.

During the period, it said it acted quickly to preserve cash through various cost-cutting initiatives including rental reductions, salary cuts and the sale of non-core assets. These initiatives improved liquidity, helping it get through the worst of the lockdown.

Revenue fell 6.9% to R1.31 billion for the year to end-June and operating profit declined by 5.7% to R41.7 million. It swung to a headline loss of 14.44c per share from earnings of 8.91c last year. Its basic loss per share widened to 28.93c from 8.48c previously. Its net asset value per share declined by 9.4% to 393c.

On top of the financial impact of Covid-19, GPI said it also affected its strategy to unlock value through a controlled sale of assets. Before the lockdown, it was in the process of disposing its 30% stake in Sun Slots and had announced the sale of Burger King SA and Grand Foods Meat Plant. As a direct result of the pandemic, the Sun Slots deal fell through and management was forced to renegotiate the Burger King sale at a reduced price.

Grand Parade's shares rose 2.9% to R2.10 in light trade on Wednesday.

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