Crown Resorts (ASX: CWN) held its annual general meeting (AGM) today and gave a trading update. Here’s what happened to the share price.
Crown Resorts is one of Australia’s largest gaming and entertainment groups. It operates two integrated resorts in Melbourne and Perth. Crown also fully owns and operates Crown Aspinalls in London, one of the high-end licensed casinos in the West End entertainment district. It is currently developing Crown Sydney at Barangaroo.
Here’s What Crown Announced At Its AGM
The Crown share price went up by 0.7% after updating shareholders about recent trading.
Crown management said that so far in FY20 from 1 July to 20 October 2019 it saw revenue from the main floor gaming (excluding VIP program play revenue) up 2% compared to the prior corresponding period, while non-gaming revenue was broadly flat. Interestingly, Crown Perth showed growth in both segments, but it was Crown Melbourne’s non-gaming revenue that was down.
However, Crown’s VIP program plat turnover at Australian resorts decreased by 46% compared to the prior period. Crown Executive Chairman John Alexander said this reflects the “difficult trading conditions in the international VIP market.” The actual win rate experienced during the period was above the theoretical rate.
Crown’s wagering and online social gaming revenue declined 4% on the previous period, with revenue declining for both Betfair Australasia and DGN.
What Does FY20 Have In Store For Crown?
Crown is working on costs and investing in Crown Melbourne and Crown Perth to improve the underlying performance of the two resorts and return to revenue growth. Some initiatives include new premium gaming areas, particularly at Crown Melbourne, new gaming products and improve marketing capability.
The construction of Crown Sydney is a big focus. It’s on time and on budget. The tower elevator core structure has now reached level 52, whilst the fit-out of the hotel guestrooms and suites is well advanced. Pre-opening activities have commenced and will continue this year.
Sales of the residential component of ‘One Barangaroo” continues and over $450 million of sales have been contracted.
The total net cost is expected to be about $1.4 billion, with the gross cost at $2.2 billion.
Crown also announced an agreement to acquire the joint venture partner’s interest in the One Queensbridge development site in Victoria. Options are being considered for this site.
Is Crown A Buy?
I’d rather consider Crown shares under $12 considering how flat profit seems to be at the moment. Until Crown Sydney is complete I don’t think profit is going to move, but this could be a major change for investors. But there are businesses growing much faster and could be better value, like the ones in the free report below.
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