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Johannesburg - JSE-listed leisure and hotel group Gold Reef Resorts (GDF) on Friday reported an 18.3% increase in adjusted
headline earnings per share of 150.7c for the year ended December 31, 2007, from 127.4c in the same period in 2006.
It has declared a dividend for the year of 65c (2006: 55c) per share, covered 2.3 times by adjusted HEPS (2006: 2.3 times).
"From time to time the board will reconsider dividend cover based on the group's cash flow, gearing and capital requirements," it said.
Further, in view of the positive cash flow of the group, the board declared a special dividend of 35c per share to be paid out of retained earnings.
The special dividend will not result in an additional secondary tax on companies (STC) burden on Gold Reef given the existence of excess STC credits. Both dividends will be financed out of Gold Reef's cash resources after servicing the debt of the group's underlying operations.
Revenue for the period grew by 14.8% to R1.742bn, but
operating profit declined from R506.50m to R409.28m
and profit for the year decreased by 39.6% to R194.987m.
"All of Gold Reef's existing casinos posted increases in revenue for the year to continue the group's overall growth," it said.
It added that two new casinos were successfully opened - Silverstar Casino in Gauteng and Queens Casino in the Eastern Cape - and the refurbishment of Gold Reef City and Goldfields Casino was substantially completed. It also said that all casinos had been adequately equipped to counter power outages.
The group explained that it had to report adjusted headline earnings per share to eliminate once-off effects, which include pre-opening expenses at Silverstar Casino and Queens Casino as well as charges resulting from the BEE transactions and various transaction costs associated with these.
In March last year, Gold Reef concluded a number of BEE transactions, which became unconditional in June last year and were accounted for effective July 1, 2007.
These transactions increased direct black shareholding in the group to more than 25.1%.
It said that in the year ahead, Gold Reef would focus on optimising its existing properties, with improved facilities at Gold Reef City and Goldfields Casino set to enhance performance.
"The two new properties position Gold Reef for growth, with the benefits of the first full year of trading for both Silverstar Casino and Queens Casino to be realised in the current year. Silverstar Casino in particular presents an opportunity to increase Gold Reef's market share in Gauteng," it added.
- I-Net Bridge