Silver Heritage Group (ASX:SVH): South Asian gaming operator


by Rachael Jones

Silver Heritage Group Limited (ASX:SVH) CEO, Mike Bolsover, talks about the company's casinos in Nepal and Vietnam and the launch and ramp up of its first Integrated Resort – Tiger Palace Resort Bhairahawa in Nepal.

Rachael Jones: Hello, I'm Rachael Jones for the Finance News Network. Joining me from Silver Heritage Limited (ASX:SVH) is CEO, Mike Bolsover. Mike, welcome to FNN.

Mike Bolsover: Thanks so much for having me.

Rachael Jones: So, first up Mike, could you start by giving us an introduction to your company?

Mike Bolsover: So, Silver Heritage Limited (ASX:SVH) is a listed company here in Australia. We listed in August, 2016. We run three separate casinos, two in Nepal, one in Vietnam, including one in Nepal where we actually own the license, the underlying land, and the casino operations themselves. So in total, we have 74 gaming tables and it's over 350 gaming machines. Principally, all of our growth from now onwards is through our own integrated resort on the border with India.

Rachael Jones: So now, let's talk about your first half 2018 results. What were the highlights?

Mike Bolsover: So, the highlights really in the first half in 2018 were moving from operating losses into operating profits. So that transition is actually happened just after the first half. And then, the first two months of the third quarter, indeed, we're tracking to be about AUD$3.5 million of annualiszed Earnings before Interest, Depreciation and Amortization ( EBITDA).

Rachael Jones: Thanks, Mike. Now before we talk about your operations, can you tell us about your gaming operations and why you've chosen Nepal?

Mike Bolsover: Sure, thanks. The company itself grew up from 2003 to 2013 with casino partners all over the region, from Macao to Vietnam to Nepal and the Philippines. So we've really leveraged our experience gained in all of those countries and put that to work in Nepal. So what we've seen in Nepal is a favourable foreign direct investment market, fairly new casino regulations, and of course, a huge, burgeoning middle class in India and also in China to the north. So, it's really using all of our experience in the past 10 years and putting that to work in an area of high growth from a demographic and also from an economic perspective.

Rachael Jones: And Mike, can you give me more detail about Tiger Palace Hotel?

Mike Bolsover: Sure, so the resort itself is situated in 10 hectares or 22 acres of land. We've built on only 50% of that, so there's a lot area for expansion. The casino itself is obviously doing extremely well. Outside of that, we have Nepal's largest swimming pool. We have two fantastic villas and a hundred rooms and suites. We have food and beverage facilities in five separate locations. And we also have great meetings, incentives, convention, and exhibition facilities adjoining the resort. So, we really can cater to both gamers and non-gamers alike, and both Nepal, India, and international travellers.

Rachael Jones: Very good. Now to your operations. Can you tell us more about your three revenue lines starting with Vietnam?

Mike Bolsover: Sure, so Vietnam, we have a casino management contract. We're currently operating there with 15 gaming tables and 94 electronic gaming machines. That's a contract that we've had already for eight years now, and we have great experience in Vietnam. That current management contract goes until March of 2025, although we've had a history of re-signing contracts to manage casinos.

So, from Vietnam we move across to Nepal, where as part of our strategy, our long-term strategy has really been to integrate vertically into the casino business itself. So the first project that we have is in Kathmandu, where we lease the property and we have a casino license which we own, and also a casino management contract that we own. In there, we have 15 tables and 38 gaming machines. So, a fairly similar size to what we have in Vietnam.

And thirdly and most excitedly, we now own our own integrated resort project on the border with India, again where we own the land, the license, and also the management contract. So, this is really a perfect scenario for us, where we have total control over the property. Currently there, we have 45 tables and 216 gaming machines with a lot of space for expansion.

Rachael Jones: Excellent. So to the last question now, Mike. What can investors look out for in terms of news flow over the next 12 months?

Mike Bolsover: Sure, so we've just released our first half results and a trading update. As you've heard, last week we've announced a capital raise and a successful renegotiation of the bond terms. So this really puts the company in a fantastic situation with respect to its balance sheet, very manageable covenants, very manageable payback and amortization of that debt. So, we're very excited again now to have redone the debt package, to have had support from shareholders old and new, and also for the business itself to be trending so well. And we're very confident again moving forwards that we'll be able to both service the debt and also make additional earnings over and above that to fund expansion or for whatever strategies that we end up deciding as a board.

Rachael Jones: Mike Bolsover, thanks for the update.

Mike Bolsover: Thanks very much for having me.


Rachael Jones

Finance News Network
Rachael comes to FNN after working for Fairfax Media covering international breaking news, including the global economy and politics. She joined FNN in February 2018. She has reported on Australia’s finance news for various organisations since 2000 and has also interviewed a number of key business players, including Bill Gates. Rachael has also worked across a number of countries, including the UK and the US.