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Southern Sun Limited Achieves Record Financial Growth in FY 2024: Revenue Up 19%, HEPS Surges 88%, EBITDAR Grows 32% | Rateweb
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Southern Sun Limited Achieves Record Financial Growth in FY 2024: Revenue Up 19%, HEPS Surges 88%, EBITDAR Grows 32%

Southern Sun Limited has released its reviewed condensed consolidated financial statements for the year ending 31 March 2024. The results demonstrate significant financial improvements, positioning the company for continued growth. In this article, we will delve into the key financial metrics, operational highlights, and strategic decisions driving Southern Sun’s impressive performance.

Revenue and Earnings Growth

Revenue Increases by 19%

Southern Sun’s revenue for FY 2024 reached R6.0 billion, marking a 19% increase from the previous year. This growth was driven by robust demand in the tourism and business travel sectors, especially in the Western Cape.

Adjusted HEPS Surges by 88%

Adjusted headline earnings per share (HEPS) increased by an astounding 88%, reaching 56.4 cents. This significant rise underscores the company’s improved profitability and operational efficiency.

EBITDAR and Profitability

EBITDAR Growth of 32%

Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent (EBITDAR) climbed by 32% to R1.9 billion. The increase in EBITDAR reflects the company’s effective cost management and revenue growth.

Attributable Profit Declines

Despite strong operational metrics, attributable profit for the year decreased by 16% to R856 million. This decline is attributed to non-recurring income in the previous year.

Share Buybacks and Debt Reduction

Significant Share Buybacks

Southern Sun invested R617 million in share buybacks, demonstrating confidence in its long-term value. This move also enhances shareholder value by reducing the number of shares outstanding.

Net Debt Reduced to R1.0 Billion

The company reduced its net debt to R1.0 billion, resulting in a comfortable leverage ratio of 0.7 times EBITDA. This reduction in debt enhances the company’s financial stability and flexibility.

Dividend Declaration

Final Dividend of 12.5 Cents per Share

Southern Sun declared a final dividend of 12.5 cents per share for FY 2024. This is a significant announcement, considering the absence of a dividend in the previous year.

Dividend Payment Details

The gross dividend of 12.5 cents per share will be subject to a 20% Dividend Tax. Shareholders liable for this tax will receive a net dividend of 10 cents per share. Key dates for the dividend include the last date to trade cum dividend on 11 June 2024, and the dividend payment on 18 June 2024.

Table: Dividend Payment Schedule

EventDate
Last date to trade cum dividend11 June 2024
Shares trade ex-dividend12 June 2024
Record date14 June 2024
Dividend payment18 June 2024

Operational Highlights

Tourism and Business Travel Boost

The Western Cape, particularly Cape Town, experienced a surge in tourism and business travel. This increase contributed significantly to Southern Sun’s revenue growth. The company’s owned portfolio of hotels in this region performed exceptionally well.

Cost Efficiency and Restructuring

Southern Sun maintained strict cost efficiencies achieved during its COVID-19 restructuring. These measures have proven effective, allowing the company to capitalize on the recovery in travel demand.

Investment in Expansion

The company allocated R180 million to expansion capital expenditure during the financial year. This investment aims to enhance its portfolio and support long-term growth.

Strategic Focus and Future Outlook

Focus on Core Markets

Southern Sun’s strategy focuses on strengthening its presence in key markets. The Western Cape remains a critical area of growth, with continued investments expected in this region.

Innovation and Customer Experience

The company is committed to innovation and enhancing customer experience. New initiatives and improvements are planned to meet the evolving needs of travelers.

Financial Stability and Growth Prospects

With a reduced debt burden and strong cash flow, Southern Sun is well-positioned for future growth. The company’s financial health enables it to pursue strategic opportunities and navigate economic uncertainties.

Conclusion

Southern Sun Limited’s financial results for FY 2024 highlight a remarkable turnaround. The company achieved significant revenue and earnings growth, driven by strong performance in the Western Cape and effective cost management. Share buybacks and debt reduction have strengthened its financial position, while the declaration of a final dividend underscores confidence in its future prospects.