The Group’s primary sources of financial capital are shareholder equity, internally generated cash flows and debt. These sources of funding have been more than sufficient to maintain our properties, fund expansion and pay dividends to shareholders in the past. The Group first looks to fund expansion through internally generated funds and debt.
Sun International has a highly skilled and experienced international management team, which brings together industry knowledge and global perspectives from South Africa, Australia and Latin America. This team helps ensure that the Group makes appropriate investment decisions and operates according to global best practice. Our employees at our properties are the primary interface with our guests, which means that they are essentially the custodians of delivering the memorable experience we strive to offer. We invest in our people to ensure they have the appropriate skills to deliver on our strategic priorities and we actively align management performance to strategy.
As a gaming, leisure and entertainment group, our brand is one of our most valuable assets together with our casino licences. Our wealth of management expertise and experience is contracted to the casinos and properties in our portfolio ensuring aligned operations with the ability to meet set targets and standards. Our intellectual capital is the foundation of our entry into new jurisdictions. We also invest in technology, systems and processes to improve how we work and provide an excellent guest experience.
The bricks and mortar of our properties forms the tangible assets of the business, and we invest in building unique casino, hotel and entertainment venues. The uniqueness of our properties is a key differentiator for our business, and we focus on protecting, leveraging and growing our asset base. We constantly review our asset base and its offerings to ensure they retain relevance and are optimally utilised.
We actively manage the stakeholder relationships on which our business depends, including with communities, business partners, governments and regulators. Our casino licences – which are essentially our regulated licences to operate – are critical to our business and require that we comply with various licensing conditions. Compliance is supported by building on our stakeholder engagements. Also, our track record of being an ethical operator and good corporate citizen supports the growth of the business into new markets and is based on a belief that doing good is more than a requirement, it is about creating shared value. Our guests are probably the single most significant and important stakeholder in our business. We strive to not just meet but exceed their expectations.
We are a medium impact user of natural resources, and our business activities depend on natural capital inputs such as water and energy. Many of our properties are located in pristine environments rich in biodiversity, which are a key aspect of their appeal to our guests.
We offer gaming, hospitality and entertainment to our guests through our casino, hotel and resort properties. we are leveraging our core existing business and utilising our track record and management skills to take advantage of growth opportunities in emerging markets.
In the 2014 financial year the Group generated R2.6 billion in internally generated cash flows and increased its debt funding by R633 million. This funding was primarily used for:
Our value added statement, gives further details on the use of our financial capital.
Sun International employs 10 417 people with 6 805 in South Africa,
2 101 in the rest of Africa, 1 493 in Chile and 18 in Panama (331 as of October 2014). In 2014, we paid R2 159 million in salaries and benefits to our employees.
In Africa, 8 412 of our non-management employees partake in the Sun International Employee Share Trust which has investments valued at
R790 million. These employees benefit from Trust distributions, with
R244 million distributed in total to employees since inception.
In the past year we secured new casino licences in Panama and Colombia; the Panama casino opened on 12 September 2014 and the Colombia casino is due to open in the second half of the 2015 financial year. To improve our business operations we have invested significantly in IT, with R647 million spent on our enterprise gaming system and implementation having commenced on an enterprise resource planning system.
Over the past year we invested R179 million refurbishing the Sun City phase one Vacation Club units and R672 million on the Ocean Sun Casino in Panama. We also applied and received approval to amend Morula casino’s licence condition which will permit us to relocate to Menlyn Maine in Eastern Pretoria where we plan to develop a R3 billion casino and entertainment complex. This outcome is however subject to legal proceedings initiated by a competitor.
As a casino operator, we are acutely aware of the negative outcomes that gambling can have within communities. We actively partner with responsible gambling initiatives to help reduce the incidence of problem gambling. We also invest extensively in promoting tourism and supporting communities, creating shared value by aligning initiatives with our core business. The reputational benefit of these initiatives is crucial to accessing new markets. Over the past year we spent R30 million on CSI, socioeconomic development and enterprise development initiatives. Our focused stakeholder engagements continue to enhance our corporate reputation, which in turn has facilitated our entry into new jurisdictions and the securing of casino licences.
Through our environmental initiatives and with dedicated expertise, we are reducing our impact, use of scarce natural resources and minimising waste. Besides improving environmental performance, there is an added benefit in lower operational costs. We are sensitive to the natural environments in which we operate, and our presence in these areas helps create value for other role-players who protect these environments, such as game reserves and natural heritage organisations.