Sun City owner hits the jackpot

Sun International continues to see strong growth via its online gambling business, with Sunbet recording a 60.6% increase in income.

In 2024, the group’s continuing income increased by 5.1% to R12.6 billion. Its adjusted EBITDA increased by 3.0% to R3.5 billion.

“Sunbet maintained its impressive upward trend, with income increasing by 60.6%, once again exceeding its ambitious growth targets,” said the group.

“The rapid expansion of online gaming, fuelled by technological advancements, evolving social attitudes, and several other challenges, necessitates enhanced compliance monitoring.”

Amidst the intense scrutiny of online gambling from civil society organisations and political parties, the group stressed it is investing in education and research to promote responsible online gambling.

GNU member Rise Mzansi has characterised the rise of online gambling as a runway crisis, with South Africans spending R1.1 trillion to gamble in 2023/24.

The group’s income from the four largest urban casinos increased by 0.7%, while growth in the smaller regional casinos posed challenges.

Rooms and food and beverage revenue from the group’s resorts and hotels grew by 10.9%. However, Sun Slots’ income dropped by 3.1% to R1.4 billion.

The group’s debt dropped from R5.7 billion to R5.2 billion. This includes the 2023 final net dividend of R510 million, the 2024 interim net dividend of R402 million, and share buy-backs of R141 million.

The board kept its dividend payout ratio at 75% of the adjusted headline earnings per share, declaring a total dividend of 398 cents per share.

Outlook

“The gaming industry is experiencing dynamic changes, and Sun International, through its omnichannel strategy, will continue leveraging its strong brand and market presence to retain and expand its customer base.”

“Our balance sheet remains robust, providing us with the financial flexibility to invest and to continue paying dividends at our targeted payout ratio,” said the group.

“Through strategic planning, efficient capital allocation, cost management, and a focus on operational excellence, Sun International will sustain its growth trajectory and deliver stakeholder value.”

Although the macro environment remains uncertain, the group expects lower inflation and interest rates to create a more favourable operating environment in the medium to long term.

The group said that year-to-date trading has followed a similar trend to prior periods, with strong growth in Sunbet, increased resort and hotel income, and rban casinos and Sun Slots achieving low single-digit growth.