Wrap Text
Prepared comments for the Southern Sun Annual General Meeting
Southern Sun Limited
Incorporated in the Republic of South Africa
Registration number: 2002/006356/06
Share Code: SSU ISIN: ZAE000272522
("Southern Sun" or "the Group")
PREPARED COMMENTS FOR THE SOUTHERN SUN ANNUAL GENERAL MEETING
Ahead of the Southern Sun Annual General Meeting, scheduled at 10h00 today Monday, 15 September 2025,
the following information is released in the interest of all shareholders.
Trading volumes have improved for the first five months of the financial year ended 31 March 2026, with South
African occupancy at 59.2%, 1.6pp ahead of the 57.6% achieved in the prior comparative period. Similarly, the
Group's average room rate in South Africa increased by 6.7% for the five-months ended August 2025 compared
to the prior comparative period and resulting in room revenue growth of 9.7%.
This has been offset by the Group's offshore segment where the average occupancy for the five-months ended
August 2025 of 33.4% is 13.1pp below the 46.5% achieved in the prior comparative period. The main driver is
the closure of Paradise Sun in Seychelles from 1 April 2025 for a major refurbishment including bedrooms,
bathrooms as well as all public areas. The hotel reopens today with trading over the remainder of the year
expected to recover strongly. Further weighing on the Group's performance is the continued weak trading in
Maputo, following the political unrest in December 2024, and in Tanzania, where business has remained
subdued since the reopening of Southern Sun Dar es Salaam on 5 October 2024.
Consequently, the Group's overall occupancy for the five-months ended 31 August 2025 increased marginally
from 57.1% to 57.8% while average room rates increased by 4.0%, resulting in room revenue growth of 6.4%.
The Group's South African operations delivered Ebitdar growth over the five-month period, driven by strong
demand for Eventing, as well as Groups and Conferencing in the Western Cape and Gauteng. This was countered
by muted transient travel demand from Government and Corporate segments, stemming from uncertainty
surrounding the delayed approval of the national budget and the April Easter period which did not occur in the
prior year. Encouragingly, demand from both sectors has begun to recover in recent months, supported by the
lead-up to the G20 and B20 conferences.
The Group has faced cost pressures in IT, which includes revised SAP licence fees, higher utility costs impacted
by electricity tariff hikes and water outages, as well as increased channel costs.
Earnings for the first half of the year will be impacted by the costs detailed above and some R30 million after tax
due to the closure of Paradise Sun which is expected to return to profitability now that it has reopened. The
change to the IFRS16 accounting policy (leases) in the prior year is expected to have a R14 million after tax
impact for the half year results and no impact on the full year results. September trading is expected to be muted
due to, inter alia, sporting events held in the prior period not repeating.
The Group's strategy remains internally focussed with several refurbishments undertaken in the first six months
of the financial year, including Paradise Sun in the Seychelles, Southern Sun Newlands, Southern Sun Rosebank,
Southern Sun Mbombela, Phase 1 of Mount Grace in Magaliesburg and some 120 rooms at the Birchwood Hotel
& OR Tambo Conference Centre.
The Group is also pursuing expansion opportunities in the Western Cape and KwaZulu-Natal. In Cape Town, we
are progressing a proposed joint venture for the development of two new iconic mixed-use sites in the key
Foreshore area. In KwaZulu-Natal, the Group is participating in the Southern Sun Hotels & Residences Oceans
uMhlanga through a management contract and an equity investment, whilst planning and design for the
redevelopment and expansion of the Beverly Hills hotel continues.
Given the Group's strong balance sheet position and strategy to co-invest in these developments alongside
partners, these initiatives are expected to be undertaken utilising existing facilities and operational cash flows
with sufficient scope for the Group to continue returning cash to shareholders. Since 1 April 2025, the Group
has repurchased a further R79 million worth of shares at an average price of R8.83 and paid the final dividend
for the year ended 31 March 2025 of R335 million.
Further updates will be provided to shareholders in due course if required and Southern Sun is currently
scheduled to release its financial results for the six months ended 30 September 2025 on or about
19 November 2025.
The financial information in these comments has not been reviewed and reported on by the Group's external
auditors.
15 September 2025
Sponsor
Investec Bank Limited
Date: 15-09-2025 07:31:00
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