FIFI PETERS: After a couple of six-year hiatus of not paying dividends, Sun International declared a dividend of 88 cents per share within the six months to June. It did this as its income grew strongly, boosted by a rise in home journey, extra conferencing, and sports activities. Income from its on line casino enterprise – that a part of the group’s operations – additionally grew strongly over the interval.
We have the CEO of Sun International, Anthony Leeming, on the Market Update for extra. Anthony, thanks a lot to your time.
Let’s begin with the live shows. You had a extremely large live performance yesterday at Time Square [Casino in Pretoria]. Karyn White was there, I’m advised. I missed it, sadly. But you even have the SAMAs [South African Music Awards] at Sun City – how did these go?
ANTHONY LEEMING: Hi, good night. They all went very properly. I feel persons are coming again in droves to go to live shows. They’ve been absent for thus lengthy and we’ve an excellent line-up arising. So properly acquired by our visitors.
FIFI PETERS: I needed to ask you about your line-up as a result of I bear in mind earlier than the pandemic I used to be actually desperate to go and see Boyz II Men, however they by no means ended up coming as a result of the pandemic occurred and that needed to be cancelled. Any risk of a re-feature of them – and who else is presumably in retailer?
ANTHONY LEEMING: I’m not too concerned in that aspect of the bookings of the enterprise, however definitely The Lumineers are coming on the finish of the 12 months. Quite a lot of worldwide artists are lined up for this 12 months. Foreigner is coming and some others. So a really thrilling line-up, and I feel [we are] going to be very busy over these durations at Time Square and GrandWest [Casino and Entertainment World in Cape Town].
FIFI PETERS: You are simply concerned in managing your entire group, because it had been. I need to speak to you about what is occurring within the gaming portfolio proper now. You speak about sturdy development that you’re seeing at your casinos – not fairly [at] the degrees of [before] the pandemic but, however not far both. What’s driving extra playing on this surroundings?
ANTHONY LEEMING: Look, this era was nonetheless a restoration from final 12 months; I feel it was extremely impacted final 12 months by Covid. And this 12 months, with out the restrictions, persons are popping out and need to get pleasure from themselves, so we’re seeing footfall rising fairly considerably. But, as you mentioned, nonetheless beneath 2019, however getting shut. So the outlook for the remainder of the 12 months nonetheless appears to be like constructive. I feel simply typically individuals need to get out. They’ve missed it for a protracted, very long time.
FIFI PETERS: I questioned when you thought there was a component of individuals going out, betting on the slots and the like because of needing to complement their incomes proper now – which aren’t stretching far sufficient as a result of gas costs are larger. Food is larger, every little thing is larger, and salaries usually are not maintaining.
ANTHONY LEEMING: Yes. The on line casino gaming tends to be extra on the high finish, and it’s individuals with more cash. I gained’t say there aren’t drawback gamblers, however we’ve got excellent programmes to attempt to cope with that. But definitely there usually are not lots of people going on the market making an attempt to earn a dwelling [through gambling], that’s for certain.
So sure, we’re undoubtedly weighted in the direction of the highest finish, and in our enterprise 85% is coming from the highest 15% of our clients. So it’s not the individual going with the final thousand rand that’s actually going to take the grocery cash away. Yes, we’ve got drawback playing, and we’ve got, as I mentioned, excellent programmes to cope with that.
FIFI PETERS: I see that whereas revenues from this aspect of the enterprise usually are not fairly on the ranges they had been earlier than the pandemic, your margins are. And the truth is your revenue margins are barely larger. What’s driving that?
ANTHONY LEEMING: Look, throughout Covid we checked out actually every little thing that we might presumably have a look at. We did some restructuring in sure elements of the enterprise, notably Sun City, Wild Coast and the resort properties. But [together with] the casinos, we lowered workers in addition to all our gaming techniques and every little thing – safety, cleansing, you identify it.
We relooked at each single contract, each single expense line, and noticed how we might do issues higher and actually enhance the enterprise.
It’s not simply [about] reducing prices, however I definitely suppose we’re working higher and among the features are coming in market share. We’ve seen market share features, and I feel that’s quite a bit to do with the VIP administration and the opposite occasions we throw in our properties.
FIFI PETERS: The market share features – is that this a operate of possibly different operations, different motels, different casinos and the like having needed to shut their doorways as a result of they couldn’t climate the pandemic storm? I’m considering realizing the place you’re discovering this new market share?
ANTHONY LEEMING: The features on the on line casino aspect are those you might be actually quoting. On the resort aspect is a bit bit completely different. But on the on line casino aspect for our rivals no casinos have closed throughout Covid. All casinos that had been there earlier than are nonetheless buying and selling. I feel all of them are fairly cash-generative. So there’s no motive for any of them to have closed.
The market share features – I feel it’s by lots of laborious work from our groups, individuals on the bottom taking care of the client and an actual deal with each our workers and our clients, as a result of that’s what it’s all about.
FIFI PETERS: Just the final query on this house, notably because it pertains to on-line gaming the place the group is making strikes to experience larger on that wave: you describe it as a fast-growing market and also you’re increasing into the remainder of the continent, the remainder of Africa. Just inform us extra about what you’re doing there, and what this can imply to your shareholders.
ANTHONY LEEMING: Well, what’s occurred previously 12 months, first of all, reside video games had been licensed final 12 months spherical about August – or we began it final 12 months in August. And then just lately, solely originally of this August, slots video games had been additionally licensed by the Western Cape Gaming Board. So we’ve seen sturdy development in income.
We see our benefit extra on the on line casino aspect of the video games, the place we’ve got fairly a large buyer base and might supply our visitors, each on-line and land-based, a kind of omnichannel strategy. They can go to us land-based or on-line, or go to our motels and resorts. So we do supply fairly an entire providing, [with] an excellent loyalty programme for the highest clients. So I actually suppose it’s an entire providing.
Online will develop strongly. We don’t see it cannibalising land-based, and definitely what we see in the meanwhile is outstanding development within the on-line aspect,
In Africa we purchased into an organization known as EasyBet, with three licences in Ghana, Botswana and Zambia. We’ll most likely launch in the direction of the tip of this 12 months or subsequent 12 months in these markets, [if] we’ve got these licences. So sure, we’re going to start out wanting on the African continent. It’s not large capital funding, extra operational expenditure on individuals and advertising – so one thing, if it doesn’t work, we are able to pull again [from] fairly rapidly. But we’re very, very optimistic that Africa presents excellent development potential for on-line gaming.
FIFI PETERS: Where else are you spending for development?
ANTHONY LEEMING: Well, at Sun City, we’re increasing our Vacation Club. We are beginning for part one in every of, uh, part three of Vacation Club at Sun City shortly. That’s a couple of R248 million growth, four- and three-bedroom villas. And thereafter, if this proceeds properly, we’ll launch an additional couple of hundred villas at Sun City.
We’ve seen excellent demand, even by Covid, for individuals’s self-catering getaways, and notably self-drive.
So the Vacation Club has been a really profitable product, which we hope we might be launching quickly, and begin development shortly.
We are additionally increasing the resort in GrandWest. GrandWest is likely one of the largest casinos, with solely 39 resort rooms. We are going to push to 103. And that’s once more simply to take care of our clients – not likely making an attempt to promote the rooms, however extra to take care of our top-end clients and guarantee that they benefit from the expertise.
But aside from that, we’ve reinvested again in our merchandise. Our properties are wanting good. So sure, proper now I feel all is on observe for one more good six months.
FIFI PETERS: Let’s speak then, Anthony. We’ll depart it there. Anthony Leeming is CEO of Sun International.
