Crown Resorts Limited (ASX:CWN) announced that billionaire James Packer has stepped down as Chairman of Crown Resorts and will be replaced by Robert Rankin.
James Packer commented on the announcement: “Crown remains my number one business priority and passion. Rob Rankin has my complete trust and respect as an executive and he will do an outstanding job as Chairman.” He believes that it is the right time to make this internal changes due to the company’s global growth aspirations. He also ensured that both will work closely together. Packer also ensured that he will remain Crown’s largest shareholders and therefore do whatever he can to ensure strong performance and shareholder benefits.
The announcement was released together with Crown’s full year results for the financial year 2015 which showed an increase in revenue of 12.6% to $3.49bn. Net profit for the period decreased 41% to $385m. The company announced a final dividend of 19cents in line with last year’s distribution.
Despite the significant decline in profit, Crown managed to strengthen its balance sheet and almost doubled cash on hand to $341m, up from $177.8m last year. Total equity increased to $4.6bn.
Chief Executive Officer Rowen Craigie called the results ‘mixed’ and commented on the challenges for Crown. He said:” Crown Melbourne’s results were pleasing with normalised EBITDA up 17.8% (…) while Crown Perth’s results were more subdued with normalised EBITDA up 5.3%.”
Gaming revenue across Macau declined 26.8%, with the rate of decline increasing in the second half of FY15. The company blames weak market conditions in Macau.
Corporate costs increased by $51.4m to $107.3m due to the Queen’s Wharf Brisbane project and other business development costs. The results were also negatively impacted by significant items of $61.3m due to the Cannery investment and costs associated with the proposed project in Sri Lanka. The Sri Lanka project has ever since been terminated and therefore account as one-off related charges.
Shares of Crown Resort fell in the opening hour of trading on the Australian Securities Exchange today. CWN was last traded around the $13 mark, down 3.5% from yesterday’s close. Shares fell as low as $12.66 on the opening before recovering slightly. CWN is down more than 13% in the past 12 months but relatively flat year-to-date.
Author: Imran Valibhoy
Aug 13, 2015
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.