Empty tables leave Tsogo Sun with a loss

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Empty tables leave Tsogo Sun with a loss

Published Date: 2020-11-20 | Source: Stephen Gunnion | Author: Stephen Gunnion

Empty tables leave Tsogo Sun with a loss

The gaming group says its operations delivered a solid performance last month as restrictions were relaxed.

Tsogo Sun Gaming has swung to a first-half loss after it was forced to close its casinos for the first quarter of the reporting period. After that, it reopened them in a staggered manner but still faced other restrictions including the curfew, limited capacity due to social distancing and a ban on alcohol sales.

The gaming group says with the significant investment in infrastructure, high employment numbers and staff costs, casinos were not built to operate in a constrained environment. As a result, severe pressure was placed on its cash flow and debt position. It said the resultant focus on reducing operating costs should help it survive, recover and emerge as a stronger business once the crisis is over.

Trading levels at its Bingo sites were also constrained by floor limitations and the curfew. However, it said there were limited cost saving opportunities in that division. While the ban on alcohol and closure of bars and restaurants had a detrimental impact on its limited payout machines (LPM) division as well, it recovered the fastest as a result of its low cost base and the low number of machines per site, making social distancing easier to manage.

Income for the six months to end-September fell 74% to R1.6 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 90% to R200 million. It swung to a loss per share of 52.6c and a headline loss of 51.9c per share. It hasn't declared an interim dividend.

Net interest-bearing debt and guarantees at the end of September totalled R11.8 billion, R400 million above March's levels. It said its strategy remained to reduce the long-term debt levels, decreasing risk and funding costs.

Tsogo said its operations delivered a solid performance last month as the curfew was relaxed.

Its shares rose 2.9% to R3.88 yesterday.





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