Grand Parade Investments (GPI), posting a 649% profit leap in its annual results, said it plans to exploring future participation in the historical horse racing (HRR) segment of the gaming market.
HHR, originally known as Instant Racing, is an electronic gambling product that allows players to bet on replays of horse races.
“This segment is growing dramatically in certain jurisdictions of the US, and the Group believes that similar opportunities exist in South Africa,” it said.
GPI performed well over for the year ended June 30 with headline profit for the year improving by R71.4 million from earnings of R11m in the prior corresponding period.
“The strategy of the group, which is now focused exclusively on the gaming sector, has yielded positive results, with the group delivering solid results for the year ended 30 June 2024,” it said.
Headline earnings per share increased by 650% to 19.20 cents per share, from earnings of 2.56 cents per share in the prior corresponding period.
Basic earnings per share increased by 584% to 17.14 cents per share, from a loss of 3.54 cents per share in the prior corresponding period.
“The considerable improvement in the earnings per share and headline earnings per share for the current reporting period is mainly due to the reduction of the costs of the restructuring transactions associated with the exit of the non-core investments of the group in the prior year,” it said.
The directors declared a final gross dividend of 11.5 cents per share from 10c per share the prior year.
In GPI’s investment portfolio sits SunWest, which owns 100% of GrandWest Casino and Entertainment World, Sun Slots and Worcester Casino.
The gaming assets’ headline earnings contribution decreased by R7m to R113.9m in the current period. Earnings from the group’s gaming investments were 6% down on prior year, largely as a result of the performance of Sun Slots.
“The challenging macro-economic environment and business interruptions arising from load shedding has negatively affected Sun Slots,” it said. Increased load shedding experienced in the current year reduced the footfall of patrons at sites.
Earnings before interest, taxes, depreciation, and amortization (Ebitda) for the year decreased by 3% to R350.7m. Net profit after tax decreased by R19.3m to R160.4m. The effect of this led to a decrease in revenue from R1.5bn in the prior year to R1.4bn in the current year.
The revenue of SunWest for the year increased by R300m to R2.5 billion in the current year. Ebitda for the year increased by 4.5% to R762.2m. Net profit after tax increased by 4.8% to R430.2m for the year.
In Worcester revenue for the year decreased by R11.5m to R119.6m. Ebitda for the current year decreased from R10.9m to R3.2m.
GPI said overall central costs decreased by R73.8m compared to the prior year. This is largely due to the significant decrease in transaction costs, which was R70.3m less than prior year.
The write-back of prescribed dividends accounted for an increase of R10.9m to the headline earnings.
GPI said it was now exclusively focused on the gaming sector.
Going forward, the group’s strategies included continuing its robust oversight of its existing gaming investment and selected investments in the gaming sector, both land-based and online.
“While business prospects in South Africa remain challenging, management believes that the gaming sector as a whole is well-positioned for future growth. Management believes that by virtue of the group’s existing gaming holdings and interests, interesting strategic and organic growth opportunities will arise,” it said.
In the year to date the share price of GPI leapt 16.51% on the JSE, while over five years it has risen by 46.8%.
BUSINESS REPORT