Interim Results for the 6 Months ended December 2012

GRAND PARADE INVESTMENTS REPORTS A 11% INCREASE IN REVENUES
Adjusted HEPS increase by 12%
Group increases LPM gaming revenue by 18%

Highlights include:
• Increase in group revenue of 11%
• Increase in LPM Gross Gaming Revenue of 18%
• Increase in adjusted HEPS of 12%
• Ordinary dividend of 12.5 cents per share and a special dividend of 7.5 cents per share totalling 20 cents per share declared, presenting a 100% increase
• Acquired Burger King Master Franchise for southern Africa
• Acquired rights to manufacture gaming machines locally in a joint-venture with Merkur Gaming

(Cape Town, 27 February 2013) Grand Parade Investments (GPI), a major player in the South African tourism, leisure and gaming industry, has reported an 11% increase in revenues to R240,94 million for the year ended 31 December 2012.

Headline earning per share (HEPS) for the period ended December 2012 decreased by 31.2%, while adjusted HEPS increased by 12.3% to 15.86 cents per share.

“GPI continues to show exciting growth and deliver favourable returns,” says Alan Keet, CEO of GPI. The first half of this financial year saw GPI announcing two exciting announcements, namely the acquisition of the Burger King Franchise for southern Africa and a joint-venture with Merkur Gaming to manufacture gaming machines locally.

“Our venture into machine manufacturing facilitated by our partnership with Merkur Gaming allows GPI to reduce costs in our LPM business and diversify our business,” says Keet.

The board declared a final dividend of 20 cents per share, representing a 100% increase which includes a special dividend of 7.5 cents per share earlier in October 2012.

“GPI will continue to be a dividend-active company,” says Keet.

Despite the slow emergence of the South African economy from the tough trading environment of the last few years, GPI’s casino investments performed well, showing growth in revenues, earnings before interest, taxes, depreciation and amortisation (EBITDA) and net profit after tax.

In the casino investment division of the business, GrandWest’s revenue increased by 5.3% and its EBITDA increased by 6% to R389,4 million. The Table Bay Hotel incurred a R26,9 million loss after tax for the period.

GPI owns and operates three limited payout slot machines (LPM) route licenses, namely Grandslots in the Western Cape, Kingdomslots in KwaZulu-Natal and Grand Gaming Slots in Gauteng.

The group’s LPM gaming revenue increased by 18.5% from R194,4 million (in December 2011) to R230,3 million for the six month period ending December 2012. The number of active LPMs in South Africa increased by only 9.1% from 7,017 (at end December 2011) to 7,659 (at end December 2012).

Grandslots in the Western Cape remained the best-performing LPM business in the country with gaming revenue of R139,8 million, a 13.8% increase from the previous period. The average gaming revenue per a machine per a day increased from R747 to R875 from the previous period (at end
December 2011).

In KwaZulu-Natal, Kingdomslots remained the market leader, generating gaming revenue of R71,3 million, and a 19.6% increase (R59,6 million in 2011). The average gaming revenue per machine per day increased from R463 to R510 from the previous period (at end December 2011).

In Gauteng, Grand Gaming Slots, which is still in its relative infancy, generated R19.1 million, an increase in revenue of 60% from the previous reporting period (December 2011). Grand Gaming Slots continues to have its LPM roll-out hampered by the fact that since May 2012 the Gauteng Gambling Board has not been in a position to approve any LPM site licenses. GPI will continue to submit site licence applications and is confident that once the Gauteng Gambling Board is reconstituted it will benefit significantly from its increased number of active sites and LPMs.

The key highlights for the period were the opening of Gauteng’s first Type-B, 40 slot LPM site at the Royal Park Hotel in Joubert Park in mid-July 2012, the approval of the reallocation of 150 of Kingdomslots’ LPMs from less profitable regions in KwaZulu-Natal to the Durban metropolitan and South Coast areas in August and the announcement of GPIs first joint-venture agreement with German-based Merkur Gaming GmbH to establish Grand Merkur (Pty) Ltd to locally manufacture and distribute gaming equipment.

“Looking forward, our short term goal for our LPM business remains to maintain our market leadership in both the Western Cape and KwaZulu-Natal and to pursue the same objective in Gauteng once its Gambling Board constraints have been resolved and we are able to roll out more LPMs,” says Keet.

The majority of the activity in the food group over the period related to the acquisition of the Burger King Master Franchise which resulted in R9,1 million in costs being incurred.

Commenting on the financial results, executive Chairman, GPI Hassen Adams says: “The future for GPI is extremely bright with our exciting investments in Burger King and Grand Merkur. Both these business are expected to become fully operational during the second half of GPI’s financial year.”

The first Burger King in South Africa is scheduled to open its flagship store in Heerengracht Street, Cape Town before the end of the current financial year and “GPI will continue to look for opportunities to strategically position the company in the market and to deliver solid growth and shareholder value,” says Adams.