Operator News
Australia – Crown welcomes ‘a complete and comprehensive corporate re-set’
By Phil - 18 February 2021
Beleaguered Australian casino operator Crown Resorts has taken another body blow with the publication of its half year results, but with resignations of key executives mounting, and following the report of the NSW Independent Liquor and Gaming Authority Inquiry, Crown has confirmed it is undergoing ‘a complete and comprehensive corporate re-set.’
The impact of the COVID-19 closures on Crown Resorts saw revenues plummet by 62 per cent to $581m for the half year with Crown Melbourne down 90 per cent to $97.1m and Crown Perth down 5.3 per cent to $409m.
Crown’s Chief Financial Officer, Alan McGregor, said: “Crown’s first half results reflect the severe impact on operations from the COVID-19 pandemic. In particular,
Crown Melbourne was closed for most of the half. Crown Perth re-opened with restrictions towards the end of June 2020 and has traded above expectations despite ongoing COVID-19 restrictions, and limited marketing and promotional activity. The main gaming floor started strongly, with performance moderating across the half. Non-gaming revenues were adversely impacted by capacity constraints and reduced foot traffic to the property, but have shown improvement through the half, particularly over the summer holiday season, despite the restrictions which remain in place.
“Unfortunately the Perth metropolitan area was recently placed into lockdown following the detection of a new community case of COVID-19. In line with Western Australian Government directions, Crown Perth suspended gaming operations for a period of 14 days and the majority of non-gaming operations for a period of five days. On 14 February 2021, Crown Perth recommenced trading of all gaming and non-gaming operations under the same restrictions that were in place immediately prior to the introduction of the lockdown.
“Crown Melbourne has progressively recommenced operations from November, albeit with only limited initial access to the property. Since the easing of restrictions on 9 December, results had shown improvement but continued to be impacted by ongoing limitations on capacity.
“Following the introduction of a five day lockdown in Victoria on 12 February 2021, Crown Melbourne similarly suspended gaming operations and the majority of non-gaming operations in line with Victorian Government directions. Crown Melbourne has recommenced operations today under restriction. Crown is supportive of the measures taken by the Victorian and Western Australian Governments through the lockdown period, with our priority remaining the health and safety of our employees, customers and the
community.
“Crown Sydney opened in a restricted capacity in late December and, while gaming operations are yet to commence, the non-gaming elements have seen encouraging property visitation. The overall contribution from the property continues to be impacted by the limited scale of operations. Good progress has been made in Crown Sydney apartment sales, with over $870m in gross sales and pre-sale commitments achieved to date. We expect settlement of the apartment sales to occur progressively from March through the balance of the calendar year, which will help to substantially de-lever Crown’s balance sheet.
The report by the NSW Independent Liquor and Gaming Authority Inquiry was naturally at the fore of the company’s discussions when presenting its financials.
Crown’s Executive Chairman, Helen Coonan, said: “Despite the uncomfortable reading at times, Crown has welcomed the Commissioner’s report of the NSW Independent Liquor and Gaming Authority Inquiry. We see it as an opportunity for a complete and comprehensive corporate re-set. We recognise the need for immediate and swift action and I would like to reiterate my commitment to driving the necessary ‘root and branch’ change that is required. Crown has committed to working constructively with ILGA to advance reforms necessary to allow it to give effect to the Restricted Gaming Licence in Sydney.
“Crown also continues to work cooperatively with the Victorian and WA regulators as it works to restore public and regulatory confidence in its operations. With Ken Barton stepping down from his role of CEO and Managing Director earlier this week, I assumed the role of Executive Chairman on an interim basis to provide leadership stability as we undertake a search for a new CEO and implement Crown’s ambitious reform program. I want to be clear I do not see myself as Executive Chairman for an extended tenure. We have already commenced a global search for a new CEO.
“The resignations of Guy Jalland and Michael Johnston as Directors of Crown and the termination of the consultancy arrangement between CPH and John Poynton mean CPH is no longer separately represented on the Crown Board. Further, Andrew Demetriou has resigned as a Director of Crown.
“Their decisions have helped to accelerate our plans for Board renewal, which had already commenced with the appointment of Nigel Morrison subject to the receipt of regulatory approvals. Nigel will bring to the Board gaming industry experience throughout Australasia and Asia. Nigel’s appointment will also enhance our Board representation in Melbourne where he is based.
