The number one casino and hotel group in South Africa, Tsogo Sun Holdings Ltd. or TSH has been experiencing an increase in sales from across the globe. However, it has, unfortunately, also seen an equally significant increase in its debts. Therefore, TSH has decided to halt any market expansions or plans to purchase existing hotels or casinos, so that they may focus on managing their current debtors.
Interview With the CEO
The CEO of TSH Jacques Booysen informed Bloomberg recently while in an interview, that although TSH was always aware of opportunities that can be acquired into the TSH group, that they were trying to be more prudent due to the current financial balance. Adding that TSH was not the type of company to purchase something simply for the sake that it was available, no they would only be adding the most suitable hotels and casinos to their growing portfolio.
But just because TSH has decided to temporarily end investment into new businesses, does not mean that there will not be any added innovations or market growth for this year. As it currently stands TSH will still be launching their new Garden Hotel in Zambia, as well as the Southern Sun Hotel in Ghana, as they move further into Africa. At present, there has been no definite launch date for the hotels but CEO Jacques Booysen has stated that it will be occurring in 2019.
In addition, to opening the new hotels, TSH will be continuing their current project to the Suncoast hotel that is currently located in Durban, South Africa. The renovation budget is standing on $127 million, which is a lot of money considering they started off the interview with remarks over debt.
The CEO Jacques Booysen then went on to discuss the Western Cape and more specifically Cape Town’s role for TSH. He described how there is a large number of possibilities for TSH in Cape Town, not only will TSH be taking advantage of the need for affordable accommodation with the implementation of budget hotels in Maputo for example, but they will also be considering relocating some smaller hotels to Cape Town as well.
The Financials of TSH
TSH has been working on reducing its spending for the past two years as it is, just last year the group managed to lower their total expenditure down to $261.5 million, which was only made possible by an 8% drop in total spending within the company. While doing all of that tight budgeting in 2017, they still managed to purchase shares in Gameco, these shares have resulted in $50 million revenue thus far.