Sun International's digital transformation is delivering. SunBet — the online sports betting and gaming platform — grew income 35.5% to R1.18bn and now contributes 24% of group adjusted EBITDA. That's up from roughly 17% a year ago. The land-based casino division finally found its footing too, expanding market share by 2.3pp to 49.0% through new slot machines and stadium gaming. Hospitality was modest (+2.8%) but held up despite war-related booking cancellations. The headline numbers: group income +7.4% to R6.58bn, adjusted HEPS +7.9% to 247cps, dividend +7.6% to 185cps. Net debt/EBITDA is a comfortable 1.6x with interest cover at 8.3x — the 2025 refinancing is paying off. CEO Ulrik Bengtsson is initiating Section 189A restructuring at smaller 'Casino Lite' properties, which tells us management isn't comfortable with a 24.1% EBITDA margin (down 1.3pp). H2 has started strongly with August revenue exceeding the 6-8% full-year guidance. At 7.3x PE with a business that's rapidly digitising its earnings base, we see value.
Harmony reported a tragic fatality at its Moab Khotsong mine near Orkney on Sunday 6 September — an employee lost his life in a seismicity-related incident. This is the second fatality at Moab Khotsong this year (the first was in January). Operations have been suspended pending the standard DMR investigation. While the financial impact of a few days' stoppage is immaterial against Harmony's R14bn+ quarterly revenue, the human cost is real and the safety record bears watching. Moab Khotsong is Harmony's highest-grade operation and a deep-level mine (3,000m+) where seismic risk is inherent. The gold price at elevated levels provides a buffer, but a pattern of fatalities invites regulatory scrutiny and potential production disruptions. The investment case — cheap gold ounces, strong cash generation, dividend upside — remains intact. But every fatality chips away at the social licence to operate.
City Lodge's voluntary trading statement confirms the tourism recovery is gaining traction. Adjusted HEPS — the group's preferred operational metric, stripping out forex swings and exceptional items — is expected between 39.1c and 42.9c, a 13-24% jump on FY25's 34.6c. That's powered by international arrivals and corporate travel returning to pre-pandemic levels. But the statutory numbers tell a more nuanced story: diluted HEPS could decline up to 3%, and basic EPS could drop 5% at the low end. The wide range reflects forex volatility and the lingering drag of once-off items. The share price has run 12.7% over 52 weeks — some recovery optimism is already in the price at 11.2x PE. Results on 10 September will show whether the adjusted-to-statutory bridge has narrowed and whether the group can convert occupancy gains into sustainable EPS growth. For now, the direction is right but we want confirmation of the magnitude before turning bullish.
AVI delivered a classic 'tale of two halves' — H1 strong, H2 battered by energy costs, June unrest stock deferrals, and creamer margin compression. Yet operating profit still grew 4.4% with margin expanding to 22.9%. Strip out the non-cash R84m abalone revaluation loss and the creamer profit decline, and underlying operating profit was up 10.1%. That's the power of relentless restructuring — R110m in benefits this year alone, with another R40m flowing into FY27. Cash generation was the standout: R4.4bn from operations, 101.8% conversion, net debt down to R1.7bn. The special R3.00 dividend on top of the 5.9% higher ordinary (R6.63 total) gives a 9.6% yield at year-end prices. Management's tone was cautious but not defensive — hedged on wheat/coffee for 12 months, no forced price increases expected, Spitz going online in October, and a quiet exploration of internationalising some brands. The 11.4x PE reflects a market that respects the dividend machine but still worries about the consumer. We think the margin resilience and cash generation deserve more credit.