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CWN

Crown Resorts Limited - Reports FY19 Results

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Crown Resorts Ltd (ASX: CWN) is a leading Australian entertainment group that operates integrated casino resorts in Perth, Melbourne and a soon to be completed resort in Sydney. The Company also has holdings in international ventures namely in London.

Crown-Resort-FY19-300x128

What are the FY19 results for CWN?

This morning (21st August 2019) CWN reported its FY19 results that are highlighted below:

  • Normalised Net Profit After Tax (NPAT) of $368.6m down 4.7%.
  • Normalised EBITDA of $802.1m down 8.7%.
  • VIP program play turnover of $38 billion down 26.1%.
  • Revenue of $2, 954.8m down 5.4%.
  • Total FY19 dividends of 60 cents per share with a final dividend of 30 cents per share.

Segment specific results for CWN  include:

  • Crown Melbourne reported normalised revenue of $2, 155.4m down 5.4%.
  • Crown Perth reported normalised revenue of $799.4m down 5.3%.
  • Crown Sydney expected to be completed by 2021.

 

What are the key drivers of this result?

Crown’s reported reduction in revenue is driven by worsening market conditions, this was most evident in the 26.1% decline in VIP turnover a result of poor conditions in the Chinese domestic market. Further reducing VIP turnover an investigation by NSW Liquor and Gambling authorities into Crown’s conduct in securing visa access for criminal VIPs has tarnished Crown’s reputation, however Crown retains it operates in accordance with the high standards set by Australian regulatory authorities.

 

What is the outlook for CWN?

Crown is expecting to complete its Sydney casino complex in the first half of 2021 at a projected cost of $2.2 billion. The residential component of the site has already secured sales valued at $450m and Crown has settled disputes that arose over sight-lines to the Harbour Bridge and Opera House. Accordingly, Crown Sydney is well positioned to generate substantial revenue in the medium-term future.

 

How has the market reacted?

The share price has risen slightly in response by 0.79% to a share price of $11.51, as investors had been expecting weak results for FY19 but are optimistic of Crown’s Barangaroo project.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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