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Strong gaming boosts Gold Reef
Message was posted: 11:09 Aug 24th, 2006

User: 4Flush Rank: Casino Gold: 4490CG Contributor rating: 10400 Status: Offline

Casino news from http://business.iafrica.com/ A continued increase in gaming revenue driven by strong performances from all its casinos, bolstered Gold Reef Resorts' revenue by 28.4 percent to R711.8-million for the six months to June 2006. The active period saw Gold Reef raise the level of BEE participation at Gold Reef City to 25.01 percent. EBITDA was up 32.9 percent to R291.4-million, representing 40.9 percent of revenue. In line with the July 2006 trading update, headline earnings per share (HEPS) increased by 29.2 percent to 56.7 cents from the IFRS restated comparative of 43.9 cents. Profit attributable to shareholders grew 16.7 percent to R110.2-million. Flagship strength Gold Reef CEO Steven Joffe said that flagship Gold Reef City enjoyed an improved performance off the back of robust trade at the casino. Gold Reef City Casino increased its market share of South Africa's largest gaming market in Gauteng and posted a 16 percent increase in revenue to R447.2-million. A comprehensive refurbishment of the casino in the next year is set to entrench strong trading over the long-term. Higher Theme Park revenue, albeit off a low base, contributed to 15.8 percent overall growth for Gold Reef City. "Although trading at the Theme Park remained subdued, a platform for future growth was consolidated during the period," said Joffe referring to the success of the ongoing revitalisation programme and the special entertainment events that attracted more patrons than expected. Legal proceedings continue With regard to action against M-Net and Carte Blanche for incorrect negative publicity, Joffe said only that legal proceedings continue in anticipation of a court date next year. He pointed out: "Notwithstanding Gold Reef's reduced economic interest in Gold Reef City, the casino's healthy performance offset the potentially lower return to Gold Reef." An ongoing economic boom in the Western Cape drove much of the 24.8 percent increase in revenue for Casino Mykonos to R49.5-million. Looking ahead Joffe said: "The refurbishments planned at a number of existing casinos will entrench their competitive advantage in their respective regions to the benefit of the group". Accordingly Gold Reef's greater exposure through increased stakes in a number of the casinos, bodes well for the group. Favourable long-term prospects are further underpinned by strengthened BEE platforms at the casinos. Joffe concluded that the corporate transactions and the Silverstar acquisition have given Gold Reef opportunity to re-gear its balance sheet. "The de-gearing over time will be earnings-enhancing for the group," he says.