Grand Parade lowers dividend

Cape Town - Gaming investment company Grand Parade Investments (GPI) - which has a large pool of previously disadvantaged shareholders - has reiterated its commitment to pay regular and generous dividends.

But with GPI's key investment - the GrandWest casino in Cape Town - feeling some strain, the annual payout was cut by 25% to 7.5c per share.

Chairperson Hassan Adams said provision had been made for the dividend as GPI needed to be mindful of the needs of its shareholders and "our commitment to be a dividend active company".

GPI CEO Adrian Funkey noted that the group held an "exceptional" balance sheet with low levels of debt. "This is a good position to be in, particularly in this pressing economic environment."

GPI earned the bulk of its keep from the 29.2% stake in SunWest, which operates the GrandWest casino in Cape Town. The company also has smaller interests in gaming investment company Real Africa Holdings (30%), the Golden Valley casino in Worcester (36.7%) and limited payout machine operator Thuo Gaming (25%). The company also holds 50% of the Western Cape Casino Resort Manco as well as 5% of the national Manco.

The most surprising aspect of the results was that the combined net value of GPI's gaming interests equates to around 370c/share - up markedly from last year's 335c/share despite the economic slowdown in SA.

This means GPI's company's shares (currently trading at 245c on the JSE) are discounting these cash-generative assets by a whopping 34%.

Understandably GPI's directors were active in buying back the company's own shares, re-purchasing 27m shares at an average price of 218c/share during the past financial year.

The market responded positively to GPI's results, lifting the share 2% to 245c in light trade.

- Fin24.com