Australian gaming company Crown Limited has announced normalised net profit after tax of $A370.1 million for the twelve months to 30 June 2008. The company states that major property upgrades will drive future earnings, that Crown Macau is trading successfully and that Cannery is trading satisfactorily. Executive Chairman of Crown, James Packer said: “The past year has been one of significant activity with the most important event being the separation of Crown and PBL into two separately listed companies.”

He described notable events for the year as being Crown Melbourne and Burswood performing well; Crown Macau successfully completing its first full year of operations; Melco Crown Entertainment Limited (MPEL) issuing further equity to the public raising US$570 million; completing the acquisition of a 50% interet in Canada’s Gateway Casinos; finalising an agreement to acquire a 100% interest in Cannery Casino Resorts in the US, subject to regulatory approval; and raising $A1 billion of term debt thereby lengthening Crown’s debt maturity profile.

Commenting on the results and the focus for the coming year, the Chief Executive Officer of Crown, Rowen Craigie, said: “Crown Melbourne and Burswood further cemented their leadership position in the Australian Casino industry by again posting a solid set of results. Crown is committed to maintaining this position and has a comprehensive capex program continuing over the next three years to accelerate the growth of these properties. The majority of the additional $660 million capex being spent at both properties is dedicated to projects with a targeted minimum return on investment of 15%. Construction of the third hotel at Crown Melbourne is well underway, refurbishments of the main casino floors at both Crown Melbourne and Burswood are progressing steadily and the upgrade of the Crown Towers hotel in Melbourne has commenced.”

He added, “The licensing process in Nevada and Pennsylvania is progressing well and we look forward to settling the Cannery acquisition in late calendar 2008. Eastside Cannery in Las Vegas opens later this month. It will be the first new property in 10 years on the Boulder Strip and we expect it to perform well in that market. This will be followed in April 2009 by the opening of The Meadows permanent casino in Pittsburgh in what is proving to be a very strong market.”

“MPEL is on track to open City of Dreams in the first half of 2009. We are very excited about this project and think it will be a truly spectacular property. The announcement by the Chief Executive of the Macau SAR in April 2008 that the number of licensed casino operators will remain the same ’for the foreseeable future’ and that commission rates will be capped is considered to be a benefit for MPEL.”

Of its joint venture business the company reported that Aspinalls, currently operating a high end casino in Mayfair (Aspinalls Club) and three regional casinos in Newcastle, Swansea (opened September 2007) and Northampton (opened June 2008; a Joint Venture with Kerzner UK), has been impacted by the introduction of smoking bans in July 2007, an increase in the levels of casino tax and a low win rate at Aspinalls Club. Aspinalls’ result was also impacted by preopening costs for Swansea and Northampton. Recent trading is said to have improved with significantly higher VIP volumes at Aspinalls Club and Newcastle trading profitably in the second half. Further revenue enhancing strategies are being implemented in order to improve performance.

Crown and Betfair (UK) have a 50:50 joint venture for a betting exchange business in Australia and New Zealand. The business continues to build critical mass and has recently achieved a cash break even position despite the negative impacts of the Equine Influenza epidemic and the severe marketing restrictions imposed on the business by various State Government legislation.

Rowan Craigie concluded, “Crown management’s focus over the coming twelve months will be on consolidating the performance of recent international acquisitions, delivering forecast earnings and managing the major capex programs at its existing Australian properties.” (E-08.20.08)

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