Annual review

The 2025 financial year has been an exceptional year for Southern Sun, marking record profitability. Total income increased by 9%, while Ebitdar grew by 14%, and adjusted HEPS grew by 34% to 75.6 cents per share (2024: 56.4 cents). The group declared a second dividend of 25.0 cents per share, doubling the 2024 maiden dividend of 12.5 cents per share.

Free cash flow generation remained strong at R952 million for the year, only R18 million less than in 2024 despite increased capital expenditure of R450 million (2024: R298 million) spent on major refurbishment projects at Southern Sun Cullinan, Southern Sun Rosebank, Southern Sun Sandton, Radisson Blu Gautrain and Paradise Sun and higher income tax payments of R326 million (2024: R225 million) in line with increased profitability. These funds were deployed to fund expansion capex of R45 million, pay dividends of R168 million, and to reduce debt reduce debt by R758 million, resulting in a comfortable leverage ratio of 0.1 times Ebitda.

This strong financial performance was supported by the strict maintenance of cost efficiencies and the group’s portfolio mix, notably its significant ownership exposure to the Western Cape, particularly Cape Town which enjoyed high demand from tourism, business travel and events.

Group occupancy increased by 2.2 percentage points to 60.8% (2024: 58.6%), exceeding the pre-Covid-19 benchmark of 60.6% recorded in 2019. The Western Cape and Gauteng were standout regions, bolstered by a recovery in local and international travel and robust conferencing demand. Rooms revenue increased by 10% to R4.5 billion (2024: R4.1 billion) driven by a 5% increase in ARR (pre-frequentGuest adjustment).

Combined South African and offshore hotel trading statistics, excluding hotels managed on behalf of third-party owners and those leased by third parties, are as follows:

For the year ended 31 March	2025	2024
Occupancy (%)	60.8	58.6
Average room rate (R)	1 463	1 388
RevPar (R)	890	813
Rooms available (’000)	5 050	5 035
Rooms sold (’000)	3 071	2 948
Rooms revenue (Rm)	4 493	4 092
frequentGuest loyalty expense (Rm)	(79)	(84)
Rooms revenue per the income statement (Rm)	4 414	4 008

The group's operating costs were tightly controlled increasing overall by 7% for the year ended 31 March 2025. Main contributors to the increase being variable costs in line with increased levels of trading. The suspension of loadshedding resulted in a saving of R36 million on diesel, offset by a R37 million increase in electricity costs largely due to tariff increases. The group continues to explore energy-saving initiatives and alternative energy sources to reduce long-term energy cost exposure.

The group generated Ebitdar of R2.2 billion (2024: R1.9 billion), translating to an Ebitdar margin of 33%, which exceeds the 2024 margin of 31%.

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