The official approval Tsogo Sun received to relocate a casino to Somerset West is being reviewed by the High Court following an application by the holder of the biggest casino operator in the Western Cape metropole, in an effort to preserve its exlusivity.
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Tsogo Sun put in a resilient 7% increase in earnings from its casinos and hotels for the year to March 31, and after its online betting business turnaround from a loss.
Headline earnings per share (HEPS) was up 8% to 153 cents. Headline earnings increased by 7% to R1.57 billion. Total income of R11.13bn generated was in line with the prior year. A 30 cents per share dividend was declared, in line with last year’s dividend.
The loss-making online betting business turned around from August 2025, said the CEO Chris du Toit and CFO Egbert Loubser in the financial results released Tuesday.
Gross gaming revenue net of bonusing (NGR) increased by 24% to R313 million, and adjusted earnings before interest tax and amortisation (EBITDA) increased to R50m, compared to a loss of R15m for the prior year.
The group’s appointments of the CEO and several other senior managers towards the end of the 2026 financial year came with extensive online betting industry experience, said Du Toit and Loubser.
“The investment in human capital is essential to deliver an improved offering. Development of systems and the product portfolio and improvement of customer experience will be core drivers for the 2027 financial year,” they said.
Group adjusted earnings before interest tax depreciation and amortisation (EBITDA) of R3.46bn was achieved at the same margin of 31.1% as the prior year.
Net interest-bearing debt (NIBD) and guarantees (net debt) reduced to R6.49bn, a reduction of R701m for the year. On April 30, the group further reduced net debt to R6.3bn. Net finance costs amounted to R550m, a 20% decrease from the prior year.
“The continued reduction of NIBD will further assist in reducing finance costs, but a change in the direction of the interest rate cycle could counteract this improvement,” the directors said.
Some R904m cash was returned to shareholders. Share buy-backs came to R438m at R7 per share. Dividends paid came to R466m. The company repurchased a further 10 million shares at an average price of R6.70 in May 2026.
The City Lodge stake was reduced due to changed circumstances and to focus resources on improving existing portfolios and initiatives. Some R215m was realised from the sale of these shares, with the remaining 15 million expected to be sold in the ensuing year.
Other unproductive or non-core assets sold, but still subject to suspensive conditions, include the two smallest casinos of the group and vacant land. The potential total value to be realised was R119m, of which R17m was received by May 2026.
“The balance of the sale proceeds were expected to be received around June 2026 and the group’s 15 casinos will reduce to 13.
The directors said the casino and hotel precincts division delivered a resilient performance, producing strong growth in rooms revenue, whilst financial pressure was predominantly being felt in the loss of revenue generated by slot machines in casinos.
Revenue for this division was flat at R8.2bn, and adjusted EBITDA was down by 3% to R3bn.
Gauteng delivered a solid performance and the Western Cape was stable - apart from Caledon where revenue and adjusted EBITDA declined by double digits - but the KwaZulu-Natal performance came under pressure.
In Gauteng, Gold Reef City made progress in stabilising its business and the group was hopeful to resolve the balance of challenges in the immediate future.
“The group is committed to improving this business, by investing (in) the upgrading of the casino gaming floor and certain rides in the theme park,” said the executives.
The approval received to relocate a casino in the Helderberg area in Somerset West from Caledon in the Western Cape was positive for the prospects of the casino and hotel portfolio, they said.
The sole casino operator in the metropole’s period of geographical exclusivity previously applicable to the metropole had expired many years ago, but it continued attempts to retain its effective exclusivity and had instituted High Court proceedings to review the regulator’s decision approving the relocation, and to interdict the implementation of that decision.
“Tsogo Sun remains committed to the relocation investment program over the next approximate two years. This may be impacted by unforeseen disruptions, applicable regulatory requirements or the outcome of those proceedings,” they said.
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