Southern Sun experienced improved trading volumes in its latest financial period, thanks to strong performances in the Western Cape and Gauteng. The group reported an occupancy rate of 60.7% for the 11 months ending February, up from 58.3% in the previous period. Refurbishments at key properties, including Southern Sun The Cullinan and Sandton Towers, helped boost demand in these regions. Enhancements at Southern Sun Rosebank and Southern Sun Sandton also contributed to improved occupancy rates and a 5.1% increase in average room rates.
While these improvements lifted overall performance, the group faced challenges in KwaZulu-Natal and Mozambique. In KZN, domestic travel demand dropped, particularly from corporate, government, and leisure sectors ahead of the May 2024 elections. Although corporate and leisure travel rebounded post-election, government bookings remained slower to recover. Additionally, reduced event activity at the Durban International Convention Centre dampened demand in Durban, while Umhlanga hotels performed well. In Mozambique, political unrest in Maputo from November 2024 to January 2025 disrupted bookings at the Southern Sun and Stay Easy hotels. Despite improved security after the presidential inauguration, occupancy levels in Mozambique remained sluggish.
Despite these regional setbacks, Southern Sun maintained strong financial performance through disciplined cost control, which bolstered cash flow and reduced net interest-bearing debt. These savings, combined with a share buyback initiative, are expected to lift full-year headline earnings per share (HEPS) by at least 20% compared to the previous year. The group’s strategic improvements and focus on cost management have positioned it for continued growth despite market challenges.