Positive signs for Crown drives share price up
Crown Resorts said the early signs of the reopening of its casino in Perth bode well for reopening scheduled elsewhere, as the casino giant looks to bounce back from the COVID-19 pandemic.
The Australian Financial Review reports that Crown Resorts chief executive Ken Barton said results from other Australians casinos that had reopened were encouraging.
Crown’s flagship casino in Melbourne has been closed since March, while its Perth property reopened on June 27.
Between July 1 and August 16, gaming revenue from the main floor at Perth was up 18 per cent on the previous corresponding period, although non-gaming revenue was down 24 per cent and VIP play was minimal, due to international border closures.
“It does seem as though once people are given the opportunity to come back to casinos they will come back,” he said.
“I don’t think there’s anything we’ve seen that says people don’t want to go out – they just need the opportunity.”
Mr Barton said the early trading numbers suggested capacity restrictions at casinos – every second gaming machine has been shut down at Perth and table games are operating at reduced levels – can be managed.
He said he was keeping a close eye to see whether or not pent-up demand would fade.
“It would seem like the constraint is around the visitation of the property and longer-term, people’s capacity to spend…not the physical constraints,” Mr Barton said.
The rebound in revenue on reopening was one reason Crown did not impair the value of its Australian casinos, despite writing down the value of the Crown Aspinalls casino in London by $52.8 million and its investment in the Nobu restaurant chain by $21.7 million.
These items helped push down Crown’s reported net profit by 80.2 per cent to $79.5 million for the 12 months to June 30.
Net profit excluding then hit from COVID-19 fell $56.3 million to $161 million.
Crown shares rose 2.7 per cent on Wednesday to $9.75 on news of the solid revenue from Perth’s reopening, but the stock has fallen 19 per cent since the start of the year.
Investors, including major shareholder James Packer, will feel more of the financial pain of Australia’s COVID-19 crisis after the casino giant said it would not pay its usual 30 cents final dividend.
Under its dividend policy, Crown typically pays a full-year dividend of 60 cents, split between half and full year.
Mr Packer, who owns a 36.8 per cent stake in the company, usually receives two dividend cheques a year worth $75 million each.
The bulk of Crown’s staff are receiving JobKeeper payments
Crown stood down about 95 per cent of its staff at the peak of the pandemic and has received $111 million through the JobKeeper scheme.
The company has also established a hardship fund that has assisted 430 staff.
Crown Perth will not continue to receive JobKeeper under the government’s revised scheme, but Crown Melbourne is likely to if restrictions remain in place.
Mr Barton said JobKeeper was important to support the nexus between a big employer and taxpayer like Crown, and its staff.
“It’s really a recognition that organisations like ours have, for the right health reasons, had to stop the main revenue-generating activity. But we want to be able to bring our people back at very short notice.”