Our opinion on the current state of SUI

Sun International (SUI) is a casino and hotel operator with interests in South Africa, Chile, Peru and recently, Argentina. The depressed economy in South Africa impacted on the performance of South African casinos and hotels even before COVID-19. The company increased its stake in Sun Dreams in Peru by 10% to 65%. It also bought a hotel and casino in Argentina for $25,5m. The company invested R4bn in the Time Square casino near Pretoria which was beginning to perform before COVID-19. The group also owns well-known South African casino/hotel operations like Sun City, Carnival City and Grand West. The share has fallen from a high of R142 in February 2015 to current levels around R18.24. At this level its debt was close to double its market capitalisation. The company plans to sell its Nigerian interests and has received a number of offers. It has not paid any dividend in the past two years and only expects to resume dividends in a further two years or so. The company retrenched 2195 staff and its debt fell sharply. In its results for the six months to 30th June 2023 the company reported income up 11,7% and adjusted headline earnings per share (HEPS) up 10,1%. The company said, "Gaming income, which makes up 78.0% of group income, showed continued sustained growth with income up 6.6%. Despite the difficult economic climate and increased competition, casino income proved resilient and increased by 3.2%. Sun Slots’ operations were impacted by load shedding with income slightly behind the prior comparative period. SunBet generated record income during the review period, up 138.4% on the first half of 2022". Technically, the share has been in an upward trend since its low point in March 2020. It should continue to recover.