ECHO'S QUEENSLAND 'STARS' SHOW NO SPARKLE

ECHO'S QUEENSLAND 'STARS' SHOW NO SPARKLE

SPARKLING new Sydney casino The Star has given Echo Entertainment Group a winning boost to its bottom line as the group’s ageing Queensland casinos continue to under perform.

Echo has reported an $83.5 million net profit for the 2012 full year, up 97.9 per cent on the previous year.

Pre-tax earnings rose 25.8 per cent to $334.6 million, aided by 17 per cent growth in revenue at The Star versus a 3.3 per cent fall in revenue across Echo’s three Queensland properties, including Jupiters on the Gold Coast and Treasury in Brisbane.

The result has fired up debate over Echo’s proposed capital expenditure plan in Queensland, which includes a major new casino complex for Brisbane and the long-awaited upgrade of its Broadbeach property.

Echo says it is still in discussions with the Queensland Government regarding its proposed local investment, although the company gives little away in the notes accompanying its latest profit results.

The casino operator blames its Queensland result on a “soft consumer environment”, while it says the Gold Coast hotel market “continues to be challenging”.

“The Queensland properties will not reach their potential until further significant investment is made,” says Echo’s CEO John Redmond (pictured).

“While recent trading has been challenging in Queensland, we remain committed, positive and engaged on the underlying potential of these assets and share the Newman Government’s vision for tourism and the opportunity that segment provides for the medium-term growth profile of our assets.

“We have a wonderful opportunity to be at the forefront of that tourism push and we continue to work collaboratively with the Government to help develop those plans as a holistic approach for south-east Queensland.“

The underlying pre-tax profit from Echo’s Queensland operations came in at $70.9 million, down 33.5 per cent from $106.6 million a year earlier.

After abnormal items, the Queensland result was 40 per cent down at $62.2 million.

In a sign that The Star and James Packer’s Crown Casino in Melbourne are pillaging the “whale punter” market, Echo’s Queensland VIP revenue fell 44.5 per cent to $24.8 million.

Even at the normalised rate, which balances out big wins or losses by the casino, the Queensland take from VIPs is down 12.8 per cent to $39.5 million.

Echo is paying a final dividend of 2c a share, bringing the full-year payout to 6c a share.

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

REA Group buys full stake in end-to-end property sales interface Realtair

REA Group buys full stake in end-to-end property sales interface Realtair

Realestate.com.au operator REA Group (ASX: REA) has acquired the re...

HESTA to pump $250m into new global fund with Stafford Capital Partners

HESTA to pump $250m into new global fund with Stafford Capital Partners

Strong returns over the past three years from a $200 million global...

Pacific Smiles to extend nib dental offering to all centres

Pacific Smiles to extend nib dental offering to all centres

Takeover target Pacific Smiles (ASX: PSQ) may see its clinics filli...

The Chemist Warehouse deal is a sideshow: pharmacies are ripe for bigger disruption

The Chemist Warehouse deal is a sideshow: pharmacies are ripe for bigger disruption

There’s something curious about the proposed merger between C...