Sun International, the South African casino, gaming and hospitality group, reported a decline in profit for the first half of 2026 despite stronger revenue, as investments in technology, customer acquisition and capabilities, alongside inflationary cost pressures, weighed on margins.

The group’s profit fell 3.5% to R719 million ($44.9 million) in the six months ended June 30, 2026, from R745 million ($46.57 million) a year earlier. Revenue increased 2.9% to R1.29 billion ($80.4 million) from R1.25 billion ($78.2 million), while group income excluding Table Bay Hotel rose 7.4% to R6.58 billion ($411.5 million).

Sun International’s online gaming business leads growth

Sunbet, the group’s online gaming business, remained its strongest growth engine, with income increasing 35.5% to R1.18 billion ($74.0 million) from R874 million ($54.6 million).

The performance outpaced the South African online gaming market, which grew by approximately 19%, supported by a 32.3% increase in active player days and a 17.5% rise in first-time depositors.

During the period, Sunbet launched a new user interface in South Africa and Botswana as part of the rollout of proprietary technology designed to create a faster customer journey and improve conversion. Land-based casinos also returned to growth, with gross gaming revenue rising 4.4% and market share increasing 2.3 percentage points to 49%.

Revenue growth comes with higher investment

Group adjusted EBITDA increased 2% to R1.59 billion ($99.4 million), although the EBITDA margin declined to 24.1% from 25.4%. Sun International said the lower margin reflected deliberate investment in technology, capabilities and customer acquisition, alongside inflationary cost pressures.

Adjusted headline earnings rose 6.5% to R591 million ($37.0 million), while adjusted headline earnings per share increased 7.9% to R2.47.

The group increased capital expenditure to R492 million from R277 million, with spending directed toward Sun City, Sun Time Square, GrandWest, Sibaya and Sunbet’s digital platforms.

Hospitality growth offsets pressure elsewhere

The hospitality business delivered 7.7% revenue growth despite approximately R20 million in cancellations linked to Middle East tensions and war-related disruptions.

Growth was supported by stronger customer experience, improved food and beverage offerings, domestic demand and investments in Sun City and other properties.

Sun Slots, the group’s limited-payout machine business, remained resilient despite disruptions and outlet closures stemming from anti-illegal-immigration protests. Sun International also said it is implementing a lower-cost, more centralised operating model and productivity initiatives, with benefits expected from 2027.

Dividend rises as group maintains financial flexibility

Founded nearly 6 decades ago by the late South African accountant and business magnate Sol Kezner, Sun International has evolved into a leading gaming and hospitality enterprise under Anthony Leeming’s leadership.

The board declared an interim cash dividend of 185 cents per share, up 7.6% from R1.72, maintaining its policy of distributing 75% of adjusted headline earnings. Sun International returned R1.2 billion to shareholders through dividends and share repurchases during the period and repurchased 5.1 million shares for R256 million.

Total assets declined modestly by 1.06% from R13.64 billion ($852.74 million) to R13.5 billion ($843.71 million), while total equity declined from R3.67 billion ($229.13 million) to R3.39 billion ($212.01 million). The group ended the period with R1.8 billion in available liquidity and said second-half trading had started strongly, with revenue growth as of August 31 ahead of its 6% to 8% guidance range.