Sun International reported a 7.4% revenue increase in its first half of the fiscal year, driven primarily by the growth of its online brand, SunBet. Group income reached R6.58 billion (approximately $411.9 million), excluding the Table Bay Hotel (TBH), which operates under a management agreement with IHG.
The adjusted EBITDA excluding TBH grew by 2%, totaling R1.59 billion. The company noted that the revenue growth was at the "upper end of expectations."
A significant contributor to this growth was SunBet, which saw a revenue increase of 35.5% year-over-year, reaching R1.18 billion. CEO Ulrik Bengtsson pointed out that this revenue surge notably exceeded the overall 19% growth rate of the South African online market during the same period. The growth of SunBet was fueled by a 32.3% rise in active player days, alongside a 17.5% increase in first-time depositors.
The improvement can also be attributed to the deployment of proprietary technology within SunBet’s tech infrastructure, which enabled the launch of a new user interface in South Africa and Botswana. Bengtsson expressed optimism about the growth trajectory and early successes across the platform, remarking that growth continues to stem from existing customers in slots and casino games, although there is a potential to expand into sports betting as momentum builds.
While Sun International has not disclosed SunBet’s share in the South African online market, the company previously announced ambitions to double its market share.
Beyond online performance, Sun International's land-based casinos saw revenue growth for the first time in three years, increasing 1.5% to R3.42 billion. The company's market share in this segment rose by 2.3% to 49%. This growth was driven by investments in product offerings and marketing, as land-based casino gross gaming revenue (GGR) grew by 4.4%. During the first half, the company introduced 876 new slot machines and stadium games.
Bengtsson credited the land-based revenue increase to Sun International’s effective execution and prudent investment decisions. However, despite the revenue growth, gross profit from land-based operations fell by 0.7% to R2 billion largely due to increased marketing expenditures.
Looking forward, Sun International anticipates that the evolution of land-based gaming into a more digital and experience-oriented landscape, coupled with a shift to a low-cost operating model, will enhance performance, market share, and profitability over time.
In addition to gaming, hospitality revenue grew by 2.8% to R1.29 billion, despite suffering about R20 million in losses from war-related cancellations.
As the company enters the second half of the year, they have noted a strong start with revenue growth as of August 31 exceeding their expectations of 6% to 8%. Yet, significant investments have increased capital expenditure from R277 million to R492 million. Bengtsson emphasized the company's commitment to substantial capability-building projects and intentional investments in marketing, customer acquisition, and market share improvements.
Despite ongoing investments, adjusted EBITDA growth has accelerated compared to the first half of the year. Sun International is now focusing on improving efficiency and margins by implementing a lower-cost, centralized operating model, particularly concerning the profitability of underperforming assets.
Sun International has begun a formal consultation process in line with Section 189A of South Africa’s Labour Relations Act, which deals with large-scale job cuts. The process aims to ensure fairness, transparency, and respect, as the company intends to retain and redeploy employees wherever possible.
Additionally, the company has launched a "Casino Lite" model aimed at bolstering profitability at smaller, lower-performing venues. This initiative is designed to enhance adjusted EBITDA and operating margins by optimizing operations in both gaming and hospitality.
