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GRAND PARADE INVESTMENTS LIMITED

GPL JSE Listed

DATE: 14 January 2026 TO: Investment Committee / Retail Desk FROM: Senior Equity Analyst SUBJECT: Investment Analysis – GRAND PARADE INVESTMENTS LIMITED (JSE: GPL)

Step 1: Data Gathering & Source Verification

Reporting Periods Used:

  • Latest Annual Financial Statements: Audited Results for the year ended 30 June 2025 (Released 23 September 2025).

  • Source File (PDF)

  • Latest Interim Results: Unaudited Results for the six months ended 31 December 2024 (Released 24 March 2025).

  • Source File (PDF)

Recent SENS Activity (L12M):

  • 01 Dec 2025: Results of Annual General Meeting.
  • 23 Sep 2025: Release of Annual Financial Statements (Dividend passed).
  • 08 Apr 2025: Transfer of listing to the "General Segment" of the JSE Main Board.
  • 24 Mar 2025: Interim Results (Dividend passed).

Step 2: Metric Extraction

| Metric | Value | Notes | | --- | --- | --- | | Market Cap | ~R920 Million | Small-cap counter. | | Share Price | R1.97 | Closing price as of 13 January 2026. | | Dividend Yield (L12M) | 0.0% | Flagged. The company did not declare a dividend for the Interim (March 2025) or Final (Sept 2025) periods. The last payment (11.5c) was made in December 2024, which falls just outside the forward-looking declared yield window. | | Liquidity Check | FAIL (Illiquid) | High Risk. Average daily volume is often zero or negligible. This stock suffers from extreme lack of tradability; entering or exiting a meaningful position without moving the price is difficult. | | P/E Ratio | 12.8x | Based on Continuing Operations HEPS of ~15.4 cents. | | Net Asset Value (NAV) | ~R3.40 | Historically trades at a significant discount to its intrinsic NAV (Sum-of-the-parts valuation of its casino stakes). |

Step 3: Operational & Strategic Analysis

1. Business Overview Grand Parade Investments (GPI) has transformed from a diversified food-and-gaming group (formerly owning Burger King SA) into a pure-play Investment Holding Company focused on the Gaming sector.

  • Primary Assets: It holds minority stakes in prime gaming assets managed by Sun International:
  • SunWest (15.1%): Owns GrandWest Casino (Cape Town's only casino) and the Table Bay Hotel.
  • Sun Slots (30%): A national Limited Payout Machine (LPM) operator.
  • Worcester Casino (15.1%): Golden Valley Casino.

2. Performance Trend (FY 2025 vs FY 2024)

  • Trend: Contracting.
  • Earnings: Headline Earnings from continuing operations fell 25% to R65.7 million (FY2025).
  • Drivers: The decline reflects a tougher consumer environment affecting gaming gross gambling revenues (GGR), specifically in the LPM (slots) market which is sensitive to lower-income consumer spending power.
  • Strategic Shift: The decision to suspend the dividend in 2025 signals a shift toward cash preservation or potential capital reallocation, possibly toward new "Historical Horseracing" (HHR) ventures mentioned in their strategic outlook.

3. Sector Context (Macro Factor) Western Cape Tourism vs. Consumer Strain. GPI's crown jewel (GrandWest) benefits from the Western Cape's booming tourism and semigration trends. However, the broader gaming sector is battling the "share of wallet" crisis—South African consumers are under pressure from high interest rates, leaving less disposable income for gambling.

Step 4: The Verdict

Bull Case: The "Sum-of-the-Parts" Discount You are buying R1.00 of assets for 60 cents. The market capitalization (~R920m) is significantly lower than the intrinsic value of its 15.1% stake in SunWest alone. . The "end game" for GPI is likely a buyout by Sun International or a delisting, which would unlock this value gap for patient shareholders.

Bear Case: The "Value Trap" & Dividend Drought Without a dividend, there is no "carry" (income) to pay you for waiting. As a minority shareholder in an illiquid holding company, you have no control over cash flows. If Sun International does not make an offer, the share price could drift sideways indefinitely. The suspension of dividends removes the primary attraction for retail investors.

Fair Value Estimate R2.80 – R3.20 Based on a conservative 15-20% discount to the estimated NAV of the underlying casino assets.

Final Rating: HOLD / SPECULATIVE

  • Why? At R1.97, the downside is limited by the tangible value of the casino assets. However, the lack of liquidity and the suspension of dividends make it "dead money" for now. It is strictly a play on corporate action (a potential buyout).
AI Generated Analysis Last Updated: 2026-01-14