Australia’s Echo Entertainment Group has seen a surge in its annual earnings for its full year results for the year ended 30 June 2014 with revenues up 27.3 per cent.
A key highlight was the improved performance by the company’s Sydney casino The Star. Echo, which also runs a Brisbane casino among two complexes it owns in Queensland, said revenue for the year increased 3.9 per cent to A$1.81bn. The Star posted a 9.1 per cent rise in earnings before interest and 6.2 per cent increase in GGR. There are plans to inject a further A$100m into The Star in order to compete with James Packer’s casino project in Barangaroo, scheduled for a 2019 opening.
Echo Entertainment Chairman John O’Neill AO said: “The business has gained solid momentum in the second half of FY14, and it is pleasing to close out the year ahead of market expectations. We have the initiatives and management team in place to make further significant enhancements in the underlying performance of the business. On this basis, we are pleased to declare a dividend slightly in excess of our payout policy.”
Echo’s new Managing Director and CEO, Matt Bekier said: “We have started FY15 the same way we finished FY14, with good momentum in our major properties. The Star is our flagship property where we will continue to invest in product and with new management coming on board, we expect to see continued improvement in FY15. We have three priorities for this financial year. Firstly, to continue growing earnings across the Group through greater focus on our customers and prudent expense management. Secondly, we will deliver on the initial stage of the capital program to substantially redevelop and expand the Gold Coast property. And thirdly, we are working hard to develop a compelling proposal for the Queen’s Wharf Brisbane development.”
“In order to make Echo’s underlying results more comparable with domestic peers and to more closely approximate normalised results with the actual win rate experienced over the last 7 years, Echo will adopt a simplified approach to the reporting of international VIP Rebate revenues for future reporting periods. The new approach will adopt real turnover measures (including bets placed where the outcome is a tie) and a fixed win rate of 1.43 per cent. This new methodology to estimate underlying revenues will apply from FY15 results onwards,” Mr. Bekier continued.
“The full 2015 financial year result may be impacted by a number of factors (which may be material in nature) including general macro -economic conditions, potential hold and win rate volatility in the PGR and international VIP Rebate business, level of debt or provisions, success of the company’s marketing programs and any uncertainty related to the regulatory environment.