Crown Resorts Limited (ASX: CWN)

CWN Details

Growth in Casino and Tourism Industry - Crown Resorts an entertainment and gaming company with operations and investments in Australia, Asia, the United Kingdom and the United States, bought back 279,224 shares from the market for the consideration of $3,665,317.60 and till date (6 June 2018) it has bought back 1,420,114 shares. The Group intends to implement the on-market share buyback of up to approximately 29.3 million shares. It appointed Jane Halton AO PSM and Toni Korsanos as directors of the Company. Lately, the Victorian Commission for Gambling and Liquor Regulation (Commission) issued a letter of censure to Crown Melbourne and imposed a fine of $300,000 on Crown Melbourne in relation to the Gaming Machine Trial. The Commission accepted that the contravention was not deliberate and that the Gaming Machine Trial did not impact the return to player ratio. The Gaming machine trial did not require any kind of prior approval of the Commission. Meanwhile, one of its Directors, Sarah Jane Halton acquired 948 Ordinary Shares. On the other hand, CWN’s Australian operations’ in the first half 2018 reflected mixed trading conditions. Total normalised revenue in 1H 2018 across Crown’s Australian resorts grew by 4.8 per cent on the prior comparable period.


Debt Profile of the Company as on 31 December 2017 (Source: Company Reports)

Crown’s equity accounted result comprised of its share of equity accounted profits from Nobu and Aspers Group, offset by Crown’s share of the equity accounted losses arising from the operating costs of Ellerston, Draftstars and Chill Gaming. Construction of the Crown Sydney Hotel Resort is progressing as per schedule with the tower foundations complete, the main structure starting to rise, and approximately 75 per cent of the total trade subcontract value was awarded under fixed-price contracts. Net operating cash flow for the period (six-months ending as on 31 December 2017) was reported at $368.5 million as compared to net operating cash flow of $230.0 million in the prior corresponding period.

The Group entered into various agreements in 2017 like it entered into an agreement with a subsidiary of Wynn Resorts, Limited to sell its interest in a 34.6 -acre vacant site on Las Vegas Boulevard (the “Alon Land”) for US$300 million. It entered into an agreement with a company controlled by Mr Harold Mitchell, a Director of Crown, in relation to the sale of its interest in an aircraft for US$4.35 million. Meanwhile, CWN stock was up by 7.01 per cent in last six months but declined by 0.98 per cent in last one month. The stock climbed up by 2.44 per cent on 6 June 2018 as market is turning positive to the group. The Casino industry has grown over the past five years despite of the rising competition from the overseas casino players and a steep decline in VIP gaming. Market also favours this stock at the back of its spending in Victoria, lower disruption risk, and lower gearing. We give a “Hold” recommendation at the current market price of $13.45 by looking at the current demand of casinos in the tourism industry and due to positive market sentiments.

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