Southern Sun share price rallies on remarkable results
Southern Sun Limited reported a 19% increase in revenue and an 88% increase in adjusted HEPS.
Key takeaways
Strong Revenue and Profit Growth: For the year ended 31 March 2024, Southern Sun Limited reported a 19% increase in revenue to R6.0 billion, with adjusted headline earnings per share (HEPS) surging by 88%.
Significant Share Buybacks: The company carried out share buybacks worth R617 million during the financial year.
Debt Reduction: Southern Sun significantly reduced its net debt to R1.0 billion, achieving a comfortable leverage ratio of 0.7 times EBITDA.
Dividend Declaration: Southern Sun declared a final dividend of 12.5 cents per share for the year ended 31 March 2024.
Operational Efficiency and Strategic Focus: The company's strong performance is attributed to maintaining cost efficiencies achieved during the Covid-19 restructuring and benefiting from a robust tourism and business travel year, particularly in the Western Cape.
Southern Sun's Impressive Revenue Growth and Financial Performance
Southern Sun Limited has released its reviewed condensed consolidated financial statements for the year ended 31 March 2024, showcasing an impressive financial performance. The group reported a 19% increase in revenue, reaching R6.0 billion. This remarkable growth is attributed to the company's strategic focus on cost efficiencies achieved during the Covid-19 restructuring and a strong tourism and business travel year, particularly in the Western Cape and City of Cape Town. The exposure to high-demand travel destinations played a critical role in boosting the company's income and profitability.
EBITDAR and Earnings Surge
The company's Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent (EBITDAR) saw a 32% increase, rising to R1.9 billion. This significant growth in EBITDAR reflects the company's ability to maintain operational excellence and cost control. Adjusted headline earnings per share (HEPS) surged by 88% to 56.4 cents, highlighting the effectiveness of Southern Sun's strategic initiatives and financial management. Despite a 16% decrease in attributable profit for the year, which amounted to R856 million, the overall financial health of the company remains strong due to its robust growth metrics.
Dividend Declaration and Shareholder Value
In a move to enhance shareholder value, Southern Sun's board of directors has declared a final dividend of 12.5 cents per ordinary share, the first dividend in this financial year. This dividend will be subject to a 20% Dividend Tax, resulting in a net dividend of 10.0 cents per share for those liable to pay the tax. The dividend is scheduled for payment on 18 June 2024, with key trading dates provided for shareholders. Additionally, the company has successfully executed share buybacks worth R617 million and reduced its net debt to R1.0 billion, achieving a comfortable leverage ratio of 0.7 times EBITDA. These strategic financial moves underscore Southern Sun's commitment to maintaining a strong balance sheet and delivering value to its shareholders.
Overall, Southern Sun's notable revenue growth, impressive EBITDAR gains, strategic share buybacks, and final dividend declaration highlight the company's robust financial health and strategic focus on enhancing shareholder value. Traders and investors should keep an eye on Southern Sun as it continues to leverage its strong market position and operational efficiencies for sustained growth.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
