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