Tsogo Sun to list hotels group next month


Tsogo Sun to list hotels group next month


Published Date: 2019-05-24 | Source: Stephen Gunnion | Author: Stephen Gunnion

Tsogo Sun to list hotels group next month

Shareholders will receive one share in the newly-listed hotels group for every Tsogo Sun share held.

Tsogo Sun is going ahead with the unbundling of its hotels business next month as it separates its casino and hospitality interests. Shareholders will be given shares in the newly-listed business on a one-for-one basis following the 12 June listing. After that, Tsogo Sun plans to change its name to Tsogo Sun Gaming, while Southern Sun Hotels will become Tsogo Sun Hotels.

The group says its hotels division services a different customer base to the gaming division and is subject to different demand and risk profiles, particularly in the regulatory sphere.

The newly-listed Tsogo Sun Hotels (THL) will continue to own, lease and manage its hotels in SA as well as several other sub-Saharan African countries, Seychelles and Abu Dhabi. It will also hold the group's minority investments in UK-based RBH Hospitality Management and International Hotel Properties. Tsogo's 59.2% interest in Hospitality Property Fund will remain owned and consolidated by THL.

Releasing results yesterday, Tsogo said trading in the year to end-March was impacted by the continued pressure on the consumer due to the weak macroeconomic environment.

Following the decision to list the hotels business separately, this division has been reported as a discontinued operation.

Total income from its gaming operations rose 18% to R11.6 billion mainly due to a 21% growth in net gaming win, including the impact of Galaxy Bingo and Slots, bought in November 2017. Revenue from hotel rooms rose 4% and revenue from food and beverages increased by 9%. Adjusted headline earnings per share declined 3% and it's lowered its final dividend by 20% to 56c per share. Its total dividend rose 84% to 188c.

Total income from the discontinued hotels business rose 1% to R4.4 billion, with a 2% growth in both rooms revenue and food and beverage revenue. This was offset by a 13% decline in property rental income on the third-party managed hotels in the Hospitality Property Fund.

Its shares closed 0.6% lower at R20.03 yesterday.


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