Food and gaming group Grand Parade Investments on Friday said it managed to reduce its overall debt by 41% – or R95.9 million – to R135.87 million, supported by the sale of fast food restaurant Burger King South Africa and the unbundling of the group’s interest in Spur Corporation.
Further, for the full-year period ended June 2022, the JSE-listed group improved headline loss by R13.3 million to R13.7 million down from R27 million in the previous comparable period.
Headline losses this period were led by losses linked to the group’s interests in catering equipment company Mac Brothers, which Grand Parade subjected to a voluntary liquidation process in April 2022 as a way to limit further losses.
“The headline loss in the current year includes an impairment against the intercompany loan with Mac Brothers (expected credit loss) and a writeoff of receivables, which was realised when control of the subsidiary was lost, as a result of the liquidation of the company.”
“The total adjustments amount to R61.7 million and if this amount is excluded from the headline loss, it would result in adjusted headline earnings of R47.9 million, a R74.9 million improvement from a R27.0 million loss posted in the prior year.”
Excluding losses linked to the Mac Brothers business, adjusted headline earnings per share (Heps) improved to 11.14 cents per share, up from a loss of 6.29 cents per share in the previous period.
Revenue from continuing operations increased by R16.5 million to R17.5 million, up from the R1 million reported in the previous comparable period. The group further resumed final dividend at 12 cents per share this period.
The recovery of the gaming industry post Covid-19 played a significant role in the group’s earnings turnaround this period. This as the last two years of the pandemic dealt a huge blow to the entertainment industry which faced crippling lockdown related restrictions to the sale of alcohol, capacity and operation times.
Grand Parade has interests in SunWest International (which owns GrandWest in Cape Town), Sun Slots and Worcester Casino – which owns and operates Golden Valley Casino and Golden Valley Lodge in the Western Cape.
All three gaming businesses saw an improvement in revenue this period, with SunWest registering the largest revenue growth of R391.7 million to R1.72 billion.
However, despite this improvement, SunWest’s revenue remains 32% below pre-pandemic levels.
Earnings before interest, depreciation and amortisation (Ebitda) this period came in 19% higher to R533.2 million but still remains 48% lower than pre-Covid-19 levels.
Sun Slots managed to increase its revenue for the period by 19% to R1.41 billion, R 178 million ahead of pre-pandemic levels. With current period Ebitda of R401.7 million being R85.29 million ahead of pre-Covid-19 levels.
Gaming operations in Worcester reported improved revenue of R120.2 million, up from R116.6 million in the previous period. However, the business saw a drop in Ebitda to R10.9 million from R12.6 million in the previous period.
The market responded well to the group’s performance with the stock trading 3.67% stronger during midday trade to R3.11.