GPI announced yesterday that headline earnings fell 16,5% to R39,83m while headline earnings per share fell by only 13,8% to 8,86c, aided by the buy-back last year of 27-million shares. The drop in earnings was largely driven down by soft trading conditions at GrandWest Casino - in which GPI holds a 35% stake through its investment in SunWest and Rail Africa Holdings - and the Table Bay Hotel, a wholly owned subsidiary of SunWest. Revenue at Grand West fell 6,4% to R787m as earnings before interest, taxation, depreciation and amortisation (ebitda) slipped 11,6% to R303m. At The Table Bay low occupancies led to a 55% drop in ebitda of R15m. This translated into a 10,5% decline in GPI's income from associates to R52,616m. Revenue also declined, to R12m from R13,3m the year before, due to lower fees generated by the Western Cape Manco . "The tourism sector was hardest hit by the economic decline. Holidays are the first to be cut from the consumer's budget ," CEO Adrian Funkey said.

In the limited payout machine market Thuo Western Cape grew revenue by more than 3% and Thuo KwaZulu-Natal by 38%. "Unlike our urban casinos, limited payout machines are side purchases where consumers may play ... while sitting having a drink in a bar, unlike the casinos, which are destinations in themselves and therefore harder hit by the weak economy," Funkey said. Operating as Grand Slots in the Western Cape and Kingdom Slots in KwaZulu-Natal, the Thuo companies are rolling out 1000 machines in each province. During the period under review, GPI acquired a greater interest in Thuo SA, buying Carentan Investments from Australia 's Tatts for R170m. Carentan owns 90% of Thuo SA, which in turn owns 70% of Thuo Western Cape and 70% of Thuo KwaZulu- Natal, supplementing GPI's existing 25,1% and 22,5% stakes . Funkey sees the limited payout machine market as key to GPI's expansion in SA and possibly in Africa. They "provide a far lower risk than casinos in that the capital costs are far less and the payout far greater. It is a great model in which to expand into Africa." - Business Day