Tsogo Sun Hotels Limited is one of the largest hotel groups on the African continent. The Group has a history dating back to 1969 when it was first established as Southern Sun Hotels by prolific hotelier Sol Kerzner. The company manages a portfolio of over 100 hotels in South Africa, Africa, the Seychelles and the Middle East, more than 300 restaurants and bars, and over 250 conference and banqueting facilities including the renowned Sandton Convention Center.

 In 2019 Tsogo Sun Holdings (THL) distributed its entire interest in Tsogo Sun Hotels Limited (TSH) in an unbundling ratio of 1 THL share for every TSH share held to shareholders in terms of the s46 “unbundling transaction” per the Income Tax Act. The separation of the group into two focused companies provides Tsogo shareholders with greater investment choice and the ability to elect their exposure to Tsogo Sun Gaming (TSG) and Tsogo Sun Hotels (THL) respectively.

The Group’s high-value portfolio includes such well-known brands as Southern Sun, Sun Square, Garden Court, and StayEasy. The portfolio has a wide geographic distribution across the region, including Mozambique, Zambia, Tanzania, Nigeria, Kenya and the Seychelles.

Data from the Group’s 2019 financial analysis shows actual dividends of R 403 million paid to shareholders. Total revenue for the year was at R4.4 billion, ending 1% above the prior year with a 2% growth in both rooms revenue and food and beverage revenue, and assisted by a 9% growth in management fees, offset by a 14% reduction in property rental income on the third party managed hotels in Hospitality Property Fund Limited.

The Offshore division of hotels achieved total revenue of R 605 million which increased 7% on the prior year, impacted by 4% due to the opening of the StayEasy Maputo hotel during April 2018. This was further favourably impacted by the weakening of the Rand against the US Dollar. EBITDAR (pre-foreign exchange gains/losses) increased by 16% to R 138 million. Foreign exchange gains of R 6 million (2018: R1 million) were incurred on the translation of offshore monetary items, principally between local country currencies and the US Dollar.

While the Group’s domestic trading was impacted by the continued pressure on the consumer due to the macro-economic environment, it has invested in expansion products considering the improved sentiment arising from positive political developments.

In terms of the Group’s continued growth strategy, R 445 million was spent during the year, including the completion of a US$ 16 million 125 room StayEasy in Maputo, Mozambique, which opened during April 2018. Added to this, the Group invested R 411 million on its replacement capex, including major hotel refurbishments, ensuring that its assets remain best in class.

These investments are predicated on an expected upswing in the economy, from which the Group stands to benefit immensely due to its high-value portfolio of popular hotels that have retained positive consumer sentiment to date.

Tsogo Sun Hotels Limited trades on the Johannesburg Stock Exchange (JSE), where investors can purchase shares under the stock symbol -TGO.

While pressure on the domestic economy has dampened consumer spending, the Group continues to deliver a thriving performance elsewhere on the continent. With the domestic economy set to bounce back after positive improvements in the political environment, the Group is set to capitalize on future growth, driving returns to investors who choose to buy shares on the JSE today.

The Group’s popular and diversified portfolio range provides a solid buy-in, and stable improvements to its share price are set to deliver good long-term growth for investors.

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