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Echo result off a bit, Star revenue grows

Echo Entertainment has reported a net profit of $66.5 million for the six months to December, a 5.3 per cent drop from the previous corresponding period.

The casino operator declared an interim dividend of 4 cents per share, fully franked at the company rate of 30 per cent.

Shares were up 0.4 per cent to $3.495 in afternoon trade.

Echo said the lower profit was a result of a lower effective tax rate in the first-half of 2012, and higher depreciation and amortisation in the first-half of 2013 following investment in Sydney's The Star casino.

Echo also operates Jupiters casino on the Gold Coast, the Treasury casino in Brisbane, and Jupiters in Townsville.

The company said 14.9 per cent actual revenue growth from The Star had been offset by a 5.2 per cent drop in Queensland revenues.


"With the period of openings behind us, the focus has turned to maximising returns on the investment made," Echo chairman John O'Neill said.

"Our expanded capacity coupled with new product offerings that are receiving global industry accolades means The Star is in a great position to drive earnings that are more consistent with the potential of our valuable licence which has 80 years remaining to run."

Revenue in the first part of the second half of the financial year was down 17 per cent from the same period in the previous year, Echo said.

‘‘The Queensland properties continued to experience soft revenue trends in [first half 2013] driven by general macro-economic conditions in our core markets,’’ chief executive John Redmond said.

‘‘We expect that the business is likely to trade in line with general market conditions in [second half 2013].

‘‘Further attention is being placed on the operating cost base in those properties.’’

He said the company was working with the Queensland government to maximise the value of its casinos, and talks were underway for a possible relocation of the Treasury casino in Brisbane.

Expansion of The Star was complete and the focus would now be on reducing operating margins, Mr Redmond said.