As Sun International, the South African gaming and hospitality group, delivered bumper annual 2024 results on the back of online gambling platform Sunbet, CEO Anthony Leeming, acknowledged that strained US-South African relations could see fewer American tourists heading to the country, particularly impacting Cape Town.

“I think Americans will reduce travel to South Africa with this mainly affecting Cape Town,” he told Business Report. Yet, he remained unfazed, pointing to a silver lining: Canadians and Europeans, also at odds with the US, might bypass American destinations and flock to South Africa instead.

“Some markets grow and some decrease,” Leeming noted.

Last year tourism boomed. Resorts and hotels income rose 7.6% to R3.3 billion, driven by a 10.9% increase in rooms and food and beverage revenue. Adjusted Ebitda, pre-management fees, for this segment grew 11.8% to R788 million, with a margin of 24.2%, up from 23.3% in 2023.

Sun International said, "The resorts and hotels sector in South Africa has experienced a strong recovery, driven by robust domestic leisure demand, conferencing and a resurgence in international tourism. The booming local tourism market has played a pivotal role in this recovery while South Africa’s favourable currency exchange rates and attractions have made it a highly sought-after destination for foreign visitors."

While tourism rebounded, the main star performer in the Sun International stable was its online gaming division, Sunbet, which reported a better-than-expected financial performance for the year ended December 31, driven by significant growth.

Sunbet’s performance underpinned the group’s results, with adjusted Ebitda, pre-management fees, reaching R36m up from R221m in 2023. Income soared 60.6% to R1.2bn, exceeding its five-year targets set in 2022. Active players increased 35%, first-time depositors rose 47.2%, and deposits climbed 63.3%. The division expanded with new licences in Mpumalanga, North West, and Botswana, alongside product enhancements like Aviator, new slot games from operators also featured in its land-based casinos, and an improved horse racing offering.

A revamped website with a modern e-commerce design and a marketing campaign tied to Sun City further supported its brand relaunch, positioning Sunbet as a leader in southern Africa’s online gaming market, the group said.

Looking ahead, Leeming said he wants to expand Sunbet's growth.

The results, released on Monday, reflect a resilient omnichannel portfolio amid a challenging macroeconomic environment. Adjusted headline earnings per share (Heps) rose 13.5% to 531 cents, up from the previous year, translating to adjusted headline earnings of R1.3 billion, a 13% increase. The board declared a final gross cash dividend of 237c per share, up 16.7% from 2023, bringing the total dividend for the year to 398c.

Continuing income grew 5.1% to R12.6bn, supported by a 60.6% surge in Sunbet’s income to R1.2bn. Group-wide continuing adjusted Ebitda increased 3.0% to R3.5bn, achieving an adjusted Ebitda margin of 27.9%.

Leeming added: “Our omnichannel approach has helped the group navigate the evolving gaming environment and with our significant growth in Sunbet we continue to see growth in our gaming revenue.”

Meanwhile, urban casinos showed resilience, with income from the group’s four largest properties up 0.7% and an adjusted Ebitda margin, pre-management fees, of 33.7%. Regional casinos faced headwinds from a weak economy, impacting margins.

Sun Slots, targeting a distinct demographic, generated income of R1.4bn, down 3.1% from 2023, but improved its adjusted Ebitda margin to 24.1% from 24%, yielding R342m in adjusted Ebitda.Sun International noted, "One of the key factors impacting the industry, has been the licensing of online slots in mid-2022 which has negatively affected the LPM [Limited Payout Machines] share of the national gaming market."

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