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Crown Resorts (ASX:CWN) share price rises on FY20 report

The Crown Resorts Ltd (ASX: CWN) share price outperformed the S&P/ASX 200 (ASX: XJO) today. Investors sent Crown shares more than 3% higher in response to the full-year result.

Key points from Crown’s FY20 report

  • Revenue from operations of $2.24 billion, down 23.6%
  • EBITDA of $504.6 million, down 40.6%
  • Net profit after tax of $81.9 million, down 79.7%

Crown Melbourne contributed $1.48 billion of revenue, 31% lower than the revenue result achieved in FY19. Main floor gaming revenue was $890.6 million, down 31% on the prior year, while hotel occupancy across Crown Melbourne’s three hotels was approximately 82%.

Crown Perth delivered $613.3 million of revenue, down 23% on FY19. Main floor gaming revenue came in 24% lower than the prior year at $344.6 million, while non-gaming revenue was $219.2 million, down 20% on FY19. Occupancy levels fared worse than Melbourne, with overall hotel occupancy across Crown Perth’s three hotels approximately 66%.

Crown Aspinalls in London contributed a further $33.1 million of revenue, down 41%, while the company’s wagering and online social gaming operations grew revenue by 4% to $135.5 million.

Closure costs

Although Crown didn’t generate any gaming revenues during the government-imposed closure period, it continued to incur expenses to maintain its operations and corporate responsibilities. 

As a result, $107.3 million of closure costs impacted the EBITDA result, while $81.6 million of closure costs were included in NPAT after factoring in the tax effects. 

As previously announced, Crown Perth re-commenced gaming activities and the majority of its food and beverage venues on 27 June. Gaming activities re-commenced at Crown Aspinalls on 15 August but remain closed in Melbourne.

During FY20, Crown Melbourne and Crown Perth qualified for the JobKeeper program. Through the program, Crown recorded $43.4 million in payroll subsidies in FY20 for employees that continued to work in either a full or partial capacity. Additionally, Crown recorded $67.9 million in JobKeeper payments on behalf of employees that were stood down.

Crown’s dividend

Crown’s dividend policy is to pay 60 cents per share on a full-year basis, subject to the company’s financial position. 

Given the impact of closures and the uncertainty surrounding the resumption of trading at Crown Melbourne, the company decided not to declare a final FY20 dividend.

Crown noted that future dividends will be subject to the board’s assessment of Crown’s financial position at the appropriate time.

Now what?

Commenting on recent trading conditions, the company revealed that Crown Perth’s main floor gaming revenue was up roughly 18% on the pcp for the period 1 July to 16 August. However, non-gaming revenue was down around 24% and VIP program play turnover has been minimal due to ongoing international border restrictions.

Based on current trading levels, the company doesn’t expect Crown Perth to qualify for the JobKeeper program beyond 27 September 2020. 

In other news in the ASX gambling space, Tabcorp Holdings Ltd (ASX: TAH) delivered its full-year result today and announced a $600 million capital raising.

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Disclosure: At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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