GPI ON THE MOVE: GPI ENTERS LUCRATIVE GAUTENG LPM MARKET AND DELIVERS ON EXPANSION PROMISE
Cape Town, 3 May 2011:- Grand Parade Investments Limited (GPI) is set to deliver on its promise to expand its Limited Payout Machine (LPM) network from 2 000 to 5 000 machines. Company chairman Hassen Adams stated late on Friday that the acquisition of Playmeter Leisure Services (Pty) Ltd’s (Playmeter) slot route operator business and license to operate 1 000 LPMs in Gauteng re-enforced GPIs commitment to delivering on its promises.
“When we acquired our initial two LPM licences just under a year ago, we stated that aggressively growing our licensed LPM slots network was our main short- to medium term goal,” said Adams, “….and the conclusion of this transaction re-enforces GPIs commitment to growth and its vision of becoming a major and respected force in the gaming and leisure industry. We are now strategically positioned to leverage off South Africa’s economic hub and in so doing afford ourselves the opportunity to expand even more locally and into areas outside of the country too.”
The Gauteng Gaming Board’s approval of the license transfer to GPI’s subsidiary Thuo Gaming Gauteng (Pty) Ltd (TGG), and the conclusio of the transaction on Friday, represents a major step forward in GPI’s stated strategy of transforming from an investment holding company to a fully-fledged gaming operations company with investments.
“This deal has again demonstrated GPI’s ability to pursue, negotiate and implement the opportunities necessary to achieve our strategic goals,” says GPI CEO Adrian Funkey. “The LPM market continues to show significant economic resilience, affords us long term growth opportunities and reduces GPIs dependence on the success of traditional land-based casinos.”
According to Funkey, Gauteng’s LPM performance has shown a strong upward trend, with the average revenue generated per machine per day in the Province increasing by 19% from R339 in March 2010 to R405 in March 2011 and the number of active machines increasing from 288 to 755 over the same period.
“We intend to capitalise on this trend, and believe we are well positioned to reach a similar market leadership position in Gauteng as we enjoy in the Western Cape (Grandslots) and KwaZulu-Natal (Kingdomslots),” says Funkey. “More importantly, LPMs remain a relatively untapped market within South Africa and this transaction will ultimately serve as a springboard to start investigating opportunities in the rest of the country and Africa.”
LPMs already make a significant contribution to GPI’s overall success. The company’s interim results for the six months ending December 2010 showed that Grandslots and Kingdomslots generated a combined R155.6 million in Gross Gaming Revenue (GGR) during the six months under review, 14% more than in the previous year.
The full value of the Playmeter deal equates to R25 million, of which R23.2 Million was settled through the issue of GPI ordinary shares, and the remainder in cash. As at the end of April 2011 Playmeter was operating 113 LPMs, across 25 venues, in Gauteng. The job security of existing Playmeter employees will not be affected by the transaction.
For further information, please contact Duncan Pollock at (021) 421-7771