The ASX offers a robust number of gaming-related companies for investors to analyse. By market capitalisation the largest sub-section of the listed gambling industry is casinos.
For many investors, when it comes to casino companies, the choice is between the James Packer backed Crown Resorts Ltd (ASX: CWN) and the owner of The Star in Sydney, Echo Entertainment Group Ltd (ASX: EGP).
These two industry giants however aren't the only two options when it comes to investing in casinos…
SKYCITY Entertainment Group Limited-Ord (ASX: SKC), which has just released its half yearly results, owns and operates casinos in Adelaide and Darwin (Australia), and Auckland, Hamilton and Queenstown (New Zealand).
Meanwhile, Donaco International Ltd (ASX: DNA) provides investors with exposure to its casino operations in Vietnam and if all goes to plan in Cambodia shortly as well.
While Donaco's business development is still early stage, making the stock higher risk, it also offers higher growth potential. In comparison, SkyCity has niche monopoly assets which are likely to grow more slowly, but with the benefit of a more defensive stream of earnings.
Here are some of the highlights from SkyCity's just released half-year report –
- Normalised revenues grew 9.1% to NZ$463.8 million
- Normalised profit after tax was flat, gaining just 0.3% to NZ$66.5 million
- Normalised earnings per share declined 0.9% to NZ 11.4 cents per share (cps)
- An interim dividend of NZ 10 cps (partially franked) has been declared
- Redevelopment work on the Adelaide Casino was completed just after the end of the half year which positions the venue to boost revenues and profits in coming periods
Investors with a higher appetite for risk and a focus on high-growth opportunities may be inclined to take a closer look at Donaco to see if it suits their investment criteria. Meanwhile, investors looking for a steady, well established casino operator may be more inclined to research SkyCity further.
