Crown Resorts marginally tops full-year forecasts

Crown Resorts is hoping for more certain regulation, as its full-year result edged expectations.

Billionaire James Packer. Crown’s normalised profit fell 23pc while its reportable result surged 146pc.

The boss of James Packer’s listed casino company, Rowen Craigie, has called for a stable regulatory environment for Australia’s online wagering sector.

The Crown Resorts chief executive — who delivered a 22.7 per cent decline in annual profit today to $406.2 million — said the company and its wagering subsidiary, CrownBet, were supportive of a regulatory environment that provided certainty to operators, customers and the general public.

“What you are seeing is a transition to a more certain regulatory environment,” he said, referring to a list of changes proposed for the sector.

The online wagering space is set for a major shake-up, with anti-gambling Senator Nick Xenophon promising to use his Parliamentary power to push for reforms. The federal government is already set to push through new reforms this year and the Northern Territory, which licences most of the foreign corporate bookmakers operating in Australia, has flagged it is reviewing its regulatory framework.

“We have led this country, and arguably the world, in responsible gaming measures and we are comfortable that online wagering moves to a regulatory environment that pays sufficient regard to those issues,” Mr Craigie said.

He added that it was important an environment was created that delivered a “steady state” regulatory position.

“It would be hard to argue that over the last three years the regulatory position has been a steady state,” he said.

It came as the gaming empire’s profit marginally topped full-year forecasts, while it continues to weigh the merits of a potential split of its international operations and a float of a stake in its local property assets.

Crown Resorts’ (CWN) 22.7 per cent decline in normalised net profit after tax to $406.2 million, for the year to June 30, was weighed by weak market conditions surrounding its Macau operations.

However, it still edged higher of expectations for a reading of $405m, helping its shares advance 3 per cent in early trade

The normalised numbers remove the impact of volatile VIP gaming revenues, with its reportable net profit surging 146.4 per cent to $948.8m.

The number was greatly enhanced by the $555.2m gain in one-off items, which was largely tied to the sale of Melco Crown shares.

Crown also declared a 3.8 per cent lift in normalised pre-tax earnings to $855.8m, above analyst projections for $845.5m.

“The 2016 full-year result reflects a solid performance from our Australian operations and continued subdued trading in Macau,” Crown chief executive Rowen Craigie added.

Its Australian casinos and resorts showed a 5.8 per cent lift in main floor gaming revenue and a 0.8 per cent rise in total normalised revenue, although VIP program play turnover skidded 8 per cent.

Mr Craigie said the lacklustre VIP number could be pinned on a comparison to a very strong fiscal 2015 result and “the depressed nature of VIP gaming activity across Asia”.

Pre-tax earnings at its Australian operations, on a normalised basis, rose 1.8 per cent.

The company also updated investors on its plans to separate its international operations and, separately, hive off a stake in of its property assets in Australia through a listed real estate investment trust.

“Work on the proposed demerger, in particular, to obtain all the necessary approvals, consents and waivers from third parties, including from governments and gaming regulators, is ongoing,” the company said.

“Work also continues on evaluating the potential IPO of a 49 per cent interest in a property trust which would own some of Crown Resorts’ Australian hotels.

“The evaluation of any IPO is being progressed independently of the proposed demerger.”

The gaming giant declared a final dividend of 39.5c a share, well above expectations for 19c.

At 10.15am (AEST), Crown shares traded up 3.2 per cent at $13.71, against a broader market fall of 0.2 per cent.