Avior Capital Markets - Sun International Ltd. (1034) Sun International | Never waste a good crisis

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Avior Capital Markets

Sun International | Never waste a good crisis

Sun International (SUI) had a challenging start to its FY'18, with Group like-for-like revenue increasing 1% in SA and Latam income flat to Jun'18. A potential smoking ban, the risk of an increase in Gauteng gaming taxes and draft legislation allowing the relocation of a casino licence into the Cape Metropole) may be a risk to SUI's future. Additionally, the Group is sailing close to its SA debt covenants at 3.2x Net Debt/EBITDA in a deteriorating trading environment. Nonetheless, a private equity group, Value Capital Partners (VCP), sees opportunity and recently bought a stake in the Group. VCP has a record of changing management teams, cutting costs and focusing on capital allocation decisions to maximise value.

17/09/2018 11 EN

Underlying

Sun International Ltd.

Sun International owns, develops, invests in and manages and operates casino, hotel and resort properties in South Africa, other African countries and Latin America. Co.'s South African properties comprised of GrandWest, Sun City, Sibaya, Carnival City, and Boardwalk. Co.'s Other African properties comprised of The Royal Livingstone and Federal Palace. Co.'s Latin America properties include Monticello.

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ZAE000097580 Johannesburg Stock Exchange South Africa

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Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Sun International | Never waste a good crisis

Sun International Limited: 1 director bought

SUI | Sun International |TSH | Tsogo Sun Holdings | SA Travel and Leisure: Casinos - Laying the odds for 2018

Tiger Brands | ESG | Pressed to execute

SA Investment Strategy | Review of January 2020 for SA investors: Coronavirus weighs on the ZAR

SA Banks | Low credit risk in commercial property | Time to buy SA banks

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