Tsogo Sun Holdings, one of the country’s leading hotel and casino companies, posted fiscal 2014 numbers this week, showing a 19% growth in profits. The group put these successful figures down to an expansion plan which has helped boost revenue from gambling properties and hotel room rates.
According to Tsogo Sun Holdings, net income in the 12 months until March 2014 rose to R1.9 billion. This was up from R1.6 billion last year. In addition, sales were reported to be R10.8 billion – an increase of 9%.
South Africa is Tsogo Sun’s major source of revenue, with 95% of its income derived from this country. Despite slow economical growth, Tsogo Sun has continued to expand into the market and improve its existing hotels and casinos. This plan has helped Tsogo Sun Holdings remain ahead of the game and buck poor economic trends.
The Chief Executive Officer of Tsogo Sun, Marcel von Aulock, said that it was not certain that the group would be able to sustain its current rate of increase “due to weaker half trading, on-going macroeconomic pressure and weak consumer demand.” He did, however, say that continued growth in profitability was an encouraging sign.
In the meantime, the group said that it was poised to re-enter the Dubai market, after identifying the country as a “priority”.
Andrew Hosking, Tsogo Sun Holding’s offshore operations director, said: “One of the reasons we based our regional office in Dubai is to stay close to the market and stay on top of any opportunities that come up.”
A year ago, Tsogo Sun’s management contracts for two main hotels in Dubai – the Al Manzil and the Quamardeen – ended, and since then the company has not operated in Dubai’s market. However, it retained its office in the country, in the hope that it could one day set up shop once more. Early this month, the group opened the Southern Sun Abu Dhabi hotel, a 353 room property in the Emirates Tourist Club area of Dubai. The four star hotel is centrally located, near to major shopping centers, the beach and many local attractions.
“We’ve looked at product offerings in Muscat and Jeddah in the past,” said Hoskin, “In terms of large cities, we would definitely consider those. Dubai is priority.”
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