Sun International Share Price Faces Support Despite Better Earnings, Dividends
The diversified gaming and hospitality company Sun International (JSE: SUI) released strong half-year earnings for the six months that...
Quick overview
- Sun International reported a 6% increase in adjusted headline earnings per share and a corresponding rise in interim dividends for H1 2025.
- Despite the closure of the Table Bay Hotel for renovations, the company saw strong growth in its digital platform, Sunbet, which surged 70.7% in income.
- The company's financial position improved with a debt-to-EBITDA ratio of 1.5x and a consistent cash generation capacity, allowing for disciplined capital allocation.
- Sun International's failed acquisition of Peermont highlights regulatory challenges in the South African gaming market, but the company remains open to future expansion opportunities.
The diversified gaming and hospitality company Sun International (JSE: SUI) released strong half-year earnings for the six months that concluded on June 30, 2025. Notwithstanding operational challenges and regulatory obstacles, the business was able to increase adjusted headline earnings and continue to pay out dividends to shareholders.
Financial Performance
The group reported an increase of more than 6% in adjusted headline earnings per share (AHEPS), matched by a similar rise in its interim dividend distribution. This growth came in spite of the closure of the Table Bay Hotel in Cape Town, one of its flagship properties, which is undergoing a R1 billion renovation funded by the V&A Waterfront.
Over the past five years, Sun International’s share price has rallied strongly from R7 to a peak of R51, but the latest earnings report triggered a retreat to R45.66. The move coincided with the share price encountering resistance at the 200 SMA on the monthly chart, while support sits just below R40, a potential level for buyers to re-enter if pressure continues.
SUI Chart Monthly – The 200 SMA Rejected the Price
Business Operations
The first half of 2025 highlighted the shifting dynamics across the company’s portfolio. Growth in Sunbet, its digital platform, continued to provide strong momentum, balancing weaker results from the group’s urban casinos, where tighter competition and subdued consumer demand weighed on performance. Resorts and hotels delivered a solid showing despite the Table Bay Hotel closure, with conferencing and tourism demand supporting recovery.
Cash generation remained robust, enabling Sun International to maintain disciplined leverage and a clear dividend policy. With consistent free cash flow and balanced capital allocation, the company demonstrated its ability to navigate headwinds while preserving shareholder value.
Strong Cash Generation and Dividend Growth Highlight Sun International’s H1 2025
Key Financial Highlights
- Continuing income up 6.7% to R6.1bn (excluding Table Bay Hotel impact).
- Adjusted EBITDA up 1.1% to R1.6bn; margin stable at 25.4%.
- Sunbet income surged 70.7% to R874m, leading digital momentum.
- Cash conversion strong: 62.4% of R1.7bn operations cash converted to free cash.
- Debt-to-EBITDA improved to 1.5x, showing healthier balance sheet.
- EPS down 8.9% to 307c; HEPS up 60.5% to 305c; Adjusted HEPS up 6.5% to 229c.
- Interim dividend declared: 172cps, up 6.8%, maintaining 75% payout ratio.
Operational Highlights
- Diversified portfolio continues to buffer macroeconomic headwinds.
- Urban casinos: income down 1.4%, facing competitive and operational challenges.
- Resorts & Hotels (excluding TBH): revenue up 4.3%, boosted by conferencing/events.
- Sun Slots: income up 2.2% to R701m, benefiting from strategy execution.
- Sunbet: strong growth reflects rising digital adoption and deposits.
Financial Position
- Net debt (excl. IFRS 16): R5.0bn, down from R5.2bn (Dec 2024).
- Net interest costs down 15.1% due to reduced debt and lower interest rates.
- Consistent cash generation capacity strengthens financial flexibility.
Outlook
- Focus areas:
- Optimization of urban casinos.
- Sunbet digital expansion and momentum in online gaming.
- Sun Slots selective growth.
- Seasonal recovery in resorts and hotels.
- Exploring regulated African markets for expansion opportunities.
- Remain open to selective acquisitions in online gaming for scale and diversification.
- Continued commitment to balanced capital allocation: shareholder returns, reinvestment, and M&A.
- Advocacy for balanced regulation to sustain a fair, responsible gaming ecosystem.
Strategic Developments
Beyond the operational results, Sun International’s ambitions to expand through acquisitions encountered challenges. The company had been pursuing a R7 billion takeover of Peermont, owner of Emperors Palace, but abandoned the effort after the Competition Commission recommended the deal be blocked. Regulators argued that the acquisition would undermine competition in Gauteng’s casino and gaming sector. Although the Competition Tribunal had not made a final ruling, both parties walked away from the deal, acknowledging the obstacles.
The failed bid highlights the regulatory complexities facing large-scale consolidation in South Africa’s gaming market, but Sun International remains open to future acquisitions in both local and regional markets, particularly in digital and online gaming.
Outlook: Looking forward, Sun International’s strategy emphasizes digital-first growth through Sunbet, selective expansion in Sun Slots, and increased activity in regulated African markets. The company also intends to continue strengthening its resorts and casino offerings while maintaining a disciplined balance between capital investment, shareholder returns, and debt management.
Despite uneven regional performance and the challenges of mature casino markets, the group’s diversified portfolio and growing digital presence position it well for sustainable growth. Consistent dividends, strong brand recognition, and a willingness to adapt underline Sun International’s efforts to balance immediate shareholder value with long-term opportunity.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save