South Africa Casino Group GPI Eager to See Growth This Year

The South African casino and investment group, Grand Parade Investments is hoping to see major growth of its brands this year, as it awaits news of the outcome of the National Lottery bidding process. GPI has been shortlisted to operate the R40 billion lottery, among a group of four successful bidders, and the government is set to announce the winners any day now.

However, GPI is not pinning all its hopes for growth on winning the lottery contract, and management has been actively looking for ways to increase growth and revenue in other areas.

Earlier this year, GPI sold its investments in SunWest and Worcester casino groups, of which it owned a quarter in both. Explaining this decision to pull out its 25% stake, GPI chairman Hassen Adams said: “The casino landscape is changing and as a minority investor, we didn’t think we had sufficient influence over our own future. We think casino-based gambling is being eroded by online gaming, sports betting, electronic bingo and in time, application gaming.”

As such, GPI earned over R1.7 billion in two years after selling its Western Cape and Northern Natal casino interests, as well as its limited payout business, Grand Slots which was acquired by Sun International.

That is not to say that GPI is not interested in being part of South Africa’s diverse gambling industry, and says that it will remain involved in areas where it believes growth is imminent. It will continue to concentrate its efforts on slot machines and has rolled out limited payout machines from its property in Tellumat to supply to Sun International casinos across the country.

The sale of some its casino interests led to the loss of around R100 million per year in annuity income, which GPI hopes to “replace with an opportunity that is as powerful”. This may or may not come in the form of becoming the national operators of the lottery.

Moving away from the South African gambling landscape, GPI continues to invest heavily in its Burger King franchise chain, and launched 18 branches in the past 18 months. According to GPI, it will launch a further 20 by the end of 2014. The catering equipment company, Mac Brothers, co-founded by Adams over a decade ago, recently received approval to become a supplier to Burger King.

The group believes that by the end of the year, 90% of the ingredients used in its Burger King ventures will be locally sourced, except chicken wings which the group “can’t get enough locally”.Click here for Lotto Results | Click here for Powerball Results