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Crown Resorts share price pushes higher after posting $368.6 million profit

The Crown Resorts Ltd (ASX: CWN) share price has pushed higher this morning following the release of its full year results.

The casino and resorts operator’s shares are up 1% to $11.50 at the time of writing.

What happened in FY 2019?

In FY 2019 Crown Resorts reported a normalised net profit after tax of $368.6 million. This was a decline of 4.7% on the prior corresponding period. Despite this, the company maintained its final dividend of 30 cents per share, bringing its full year dividend to 60 cents per share.

On a reported basis, the company’s net profit after tax came in at $401.8 million, which was a 23% increase before significant items or a 28.1% decline after significant items. 

These significant items related to a net gain of $232.2 million in the prior corresponding period for the reversal of an impairment of the Alon Las Vegas land and gains on the sale of CrownBet and Ellerston.

What were the drivers of the result?

The weakness in its normalised result was largely down to the subdued trading conditions that it has faced over the last 12 months.

During the year the company saw its normalised Australian resorts revenue slide 5.4% due to a 26.1% reduction in VIP play. And whilst main floor gaming revenue edged higher, it was not enough to offset the softness from its high rollers.

Crown Resorts’ Executive Chairman, John Alexander, explained: “Crown’s Australian operations’ full year result reflected subdued market conditions. Total normalised revenue across Crown’s Australian resorts decreased by 5.4% on the prior comparable period. This decline was primarily due to the reduction in VIP program play revenue in Australia, which was down 26.1%. Main floor gaming revenue increased by 0.5%, with modest revenue growth in Melbourne offset by continued softness in Perth, particularly for the table games business.”

Mr Alexander also hit out at the negative media coverage the company has received this year.

He said: “During the 2019 financial year, Crown again made a major contribution to the Australian economy through its role in tourism, employment, training and its corporate responsibility programs. Crown’s contributions risk being overshadowed by recent media reporting which has unfairly sought to tarnish Crown’s reputation.”

“Crown has zero tolerance for criminal elements and we view these inquiries as an opportunity to continue our cooperation with regulators and other agencies,” he added.

Elsewhere in the industry today, the Star Entertainment Group Ltd (ASX: SGR) share price is down 3% and the SKYCITY Entertainment Group Limited (ASX: SKC) share price has edged higher with Crown Resorts.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Crown Resorts Limited. The Motley Fool Australia has recommended Sky City Entertainment Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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