James Packer’s private company slumps to $400m loss as Crown’s travails hit billionaire’s wealth
The private Consolidated Press Holdings had $600m wiped from its assets as Crown struggled during COVID-19 and cancelled its dividend.
The plunging share price of Crown Resorts and the scrapping of its dividend has weighed heavily on James Packer’s flagship private company, which has slumped to a $400m paper loss and had more than $600m wiped from its assets.
The financial accounts of the billionaire’s Consolidated Press Holdings, lodged with the corporate regulator late on Monday evening, reveal how the earnings hit Crown took due to COVID-19 had a knock-on effect on Mr Packer’s wealth.
CPH made a $402m loss for the year to June 30 from only $16m revenue, compared to a $46m profit from $321m income in 2019.
Much of the loss was due to the falling Crown share price during the 2020 financial year, in which it fell by more than 25 per cent, and the subsequent fall in the value of the assets on the CPH balance sheet.
Mr Packer has also missed out on a big payday from his major shareholding in Crown, which in August cancelled its final dividend for the 2020 financial year after its profits and revenue fell due to the forced closure of its Melbourne and Perth casinos at the height of the pandemic.
Crown’s stated dividend policy is to pay 60c a share, which delivers its major shareholder Mr Packer a $73m payment every six months.
The CPH accounts show a dividend of $127m was paid for the year – only slightly less than the $140m unfranked payment made to Mr Packer in 2019 and above the $124.2m for the previous year.
CPH’s accounts lodged with the Australian Securities and Investments Commissions are not consolidated, so never give a complete picture of Mr Packer’s wealth.
But they do at least provide a snapshot of the large amount of assets under his control and the fluctuations in the value of his holdings each year.
The accounts show CPH’s net assets fell $646m or about 15 per cent to end the financial year at about $3.88bn. While there was a $400m increase in the financial assets held on the CPH balance sheet, there was a $1.4bn increase in interest bearing liabilities or borrowings from other subsidiaries and holdings in the wider CPH empire.
Overall though, the fall in net assets is mainly attributable to the declining value of Mr Packer’s Crown holdings.
However, CPH has a string of other private assets and many of them performed strongly in 2020.
CPH has investments with venture capital firm Square Peg Capital, led by Andrew Bassat, with both firms investing in companies such as the New York Stock Exchange-listed ride sharing firm Uber.
CPH is said to have about $100m directly invested in Square Peg and co-invested with the venture capital firm in a range of companies, including Israeli freelance marketplace Fiverr, which has surged almost 10 times in value since listing on the NYSE last December.
It retains an interest with Hollywood actor Robert De Niro in a $US250m luxury resort project called Paradise Found Nobu on the Caribbean Island of Barbuda, which is still to be developed and has been held for that purpose during the pandemic.
CPH also owns a block overlooking the Sea of Cortez, 10 minutes from San Jose El Cabo in Mexico, where Mr Packer is building a holiday home, and other properties around the world.
There is also a half-share in NRL club South Sydney on the CPH balance sheet and a 40 per cent holding in swimwear business The Upside, founded by Mr Packer’s first wife Jodhi Meares, and a stake in successful peer-to-peer lender SocietyOne.
In the middle of 2019, as he battled a mental health crisis, Mr Packer resigned from all 22 of his Australian corporate directorships, including CPH.
However he remains director of the Bahamas-registered Consolidated Press International Holdings, the ultimate parent company of the CPH business that lodged its accounts with ASIC.
The financial result for CPH caps a tumultuous period for Mr Packer, who made high-profile appearances before the NSW Independent Liquor and Gaming Authority’s inquiry into Crown in recent months.
Crown has delayed the opening of its new $2bn casino at Barangaroo in Sydney until ILGA hands down its report on February 1, though non-gaming elements will open.
Crown could face a battle to keep its casino licence after admitting that its bank accounts had probably been used for money laundering.
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