With the implementation of GPI‘s growth plan, our prospects for the next five years are well defined and give the Company an opportunity to establish targets driven by KPIs. GPI is confident that its existing and newly acquired businesses will drive it to new heights.
Since listing in 2008, GPI has been determined to remain in control of its own destiny. The journey, so far, has been an exciting one in which GPI has challenged new frontiers and substantially diversified its interests. GPI’s five-year strategy is coming together and its implementation is at an advanced stage.
The Group decided to migrate its gaming assets from bricks-and-mortar gambling to technology gaming, which resulted in the sale of GPI’s prized casino assets. GPI brokered a substantial deal with Sun International and Tsogo Sun Holdings Ltd (Tsogo Sun), the two largest casino operators, to sell its interests in GrandWest and Worcester Casino, as well as its indirect interest in Sibaya Casino. The SunWest and Worcester Casino transactions will result in significant value for GPI shareholders and represents an excellent return on investment. It will also entrench GPI’s relationship with these casino operators which, in turn, will support the Group’s gaming machine manufacturing initiative.
GPI also embraced its partnership with Sun International by selling them a percentage of the Group’s Slots business. This partnership changes the whole landscape of the Group’s Slots business in the Group’s drive to be the biggest and the best LPM operator in South Africa. It also allows the Group to expand into other countries, especially with the support, track record and experience of Sun International as our partner. The Slots business has grown substantially and it is the Group’s intention to grow this business to 10 000 LPMs throughout the country within the short to medium term.
In each of the abovementioned transactions there was a significant opportunity to generate cash, which enables GPI to accelerate its ambitious growth strategy. Importantly, these transactions place the Group in good stead to take advantage of a larger shareholding by exercising meaningful influence.
GPI has established an online sports betting business and is presently operating as GrandPlay. GPI is also one of the four bidders for the third Lottery Licence. Winning this bid would be a great step forward in GPI’s technology gaming strategy. At the time of writing this report no announcement has been made of the successful candidate.
The decision to invest in the food business has changed the face of GPI, championed by the BURGER KING® investment.
The decision to invest in the food business has changed the face of GPI, championed by the BURGER KING® investment. It has enhanced the GPI image and significantly influenced its overall value proposition. GPI’s annuity income from gaming assets will be replaced by that of the Group’s BURGER KING® operations in future. The BURGER KING® investment also gave the Group the opportunity to venture into the manufacturing and production of food. The Group established a joint-venture relationship with Excellent Meat Burger Plant (Pty) Ltd (Excellent Meat), which affords the Company an export opportunity, and GPI purchased a catering equipment manufacturing company, Mac Brothers Catering Equipment (Pty) Ltd (Mac Brothers), which complements our vertical integration strategy.
After year-end, GPI announced the acquisition of a 10% stake in Spur Corporation Ltd (Spur). Spur is a market leader in its category and GPI is excited to be its chosen partner and GPI sees many opportunities for collaboration, especially in the supply chain.
These transactions signify GPI’s coming of age. It has always been GPI’s dream to play a greater part in the South African economy, without sacrificing our corporate identity. As a BBBEE company, our vision is to grow the intrinsic value of our business, and in doing so, to take our community-based shareholders along on this journey. It is essential for the Company, as one of the pioneering BBBEE companies, to create a tradition that will allow GPI to grow even further.
The Group’s strategy is mapped out and the implementation of the Group’s growth plan is in full swing. GPI now have the necessary tools to venture into new frontiers through acquisitions and other exciting opportunities, which the Group is pursuing vigorously.
This year, I was awarded the Ernst & Young Entrepreneurial Award in the Exceptional Category for Africa, which would not have been possible without the assistance and support of my colleagues, and my profile at GPI.
I would like to express my sincere appreciation to the Board of Directors, management, employees and consultants for their support and tireless efforts throughout the year. This journey cannot be possible without their dedication and passion for the business.