Star shines as Echo boosts revenue
Echo Entertainment Group has lifted its revenues by nearly 13 per cent, buoyed by strong growth at its flagship Sydney casino The Star.
Chairman John O'Neill told shareholders at Echo's annual general meeting on Thursday that total gross revenue for the first 16 weeks of the financial year was 12.9 per cent higher than the same period a year ago.
The Star had lifted its revenues by 27.5 per cent, with its international rebate business posting a 21.1 per cent rise on a normalised basis.
However, trading remained difficult at Echo's Queensland operations which include the Treasury Hotel and Casino in Brisbane and Jupiters Hotel and Casino on the Gold Coast and Townsville.
Revenues were lower than the same time last year, with Echo blaming the softer economic environment and its inability to provide new facilities due to government red tape.
"Without the opportunity for a game-changing investment, our properties in Queensland cannot and will not perform better than the markets they operate in," Mr O'Neill said.
"But, all in all, we are pleased with the momentum for the group, especially at The Star and in VIP."
Mr O'Neill acknowledged that while The Star had endured its fair share of controversy in 2012, the company had "drawn a line in the sand" and was now looking ahead.
He said Echo had not done enough to highlight the strategic value of its exclusive casino licence in Sydney.
Echo currently holds a monopoly on the city's casino licence until 2019, but billionaire James Packer appears to be keen to secure a second one.
Mr Packer is in talks with the NSW government about building a $1 billion luxury waterfront hotel and casino complex at Barangaroo in Sydney's CBD.
NSW Premier Barry O'Farrell on Thursday said Mr Packer's unsolicited proposal had been signed off by the heads of the Department of Premier and Cabinet and the Treasury.
That has concluded the proposal should now be subject to a rigorous financial appraisal to see if it is in the state's best interests.
But, Mr O'Neill told shareholders he believed that states, including NSW, should stick to having just one casino in every major city.
Such a policy was "the right one to create the platform for truly distinctive developments that safeguard responsible gambling and provide a growing stream of tax revenue to governments as well as adequate returns for shareholders," he said.
Mr Packer's Crown casino business has a 10 per cent stake in Echo and is keen to win regulatory approval to buy more shares.
The Hong Kong arm of Malaysian casino group Genting holds a 5.2 per cent stake, which it is keen to increase, while its Singapore division owns about five per cent.
Mr O'Neill said Crown and Genting's interest demonstrated the inherent value Echo's licences and properties.
He told shareholders that Echo's board and management were not "sitting on their hands simply awaiting other parties to present business plans and growth opportunities to the company or to progress their own plans for competing properties in our territories".
"We have a strategic growth agenda of our own and well-developed plans to drive our business forward," he said.
Meanwhile, Echo continues its search for a chief executive to replace Larry Mullin, who steps down in January.
Mr O'Neill said an international search was well-progressed and the board was confident of attracting a suitable, experienced senior executive to lead Echo.
Echo's shares were 11 cents, or 2.9 per cent, lower at $3.68 at 1111 AEDT.