The owner of The Star casino in Sydney and Jupiters in Brisbane, Echo Entertainment Group Ltd (ASX: EGP), has released an impressive set of half-yearly results.
Those results included a normalised net profit after tax of $112.6 million which represented a gain of 77.7% on the prior corresponding period (pcp).
The profit growth can be attributable to strong performances by both of Echo's business divisions. Domestic gross revenues grew 12.5% to $824.4 million, while Normalised International VIP Rebate business gross revenue soared 96.7% to $332.2 million. Pleasingly, operating expenses only increased by 7.1%.
Echo's shareholders will receive an interim fully franked dividend of 5 cents per share (cps), up from 4 cps in the pcp, on 11 March.
In trading on Wednesday – post results release – Echo's shares have given up over 1.5% in a particularly strong market which has seen the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) jump 1.2% by lunchtime. This would suggest that the market had already accurately priced in a strong result for Echo.
Could it be a different story for Crown Resorts Ltd (ASX: CWN)?
Investors will have to wait until later this month (the scheduled release date is February 20) to get the official results from James Packer's Crown Resorts, however, recent news flow regarding Crown could make for a sombre affair.
Here are some of the issues:
- Crown has failed in its attempt to open a casino in Sri Lanka
- A recent report in the Fairfax media suggested that Mr Packer is frustrated with delays to planning approval for the Barangaroo site
- The recent change of government in Queensland which has the potential to lead to delays or changes in the bidding process for Brisbane's casino license
- A crackdown by Chinese authorities in Macau is proving troublesome for the group's interests there
- Last but by no means least, the share price is down 13% over the past 12 months
There are a number of headwinds facing Crown while in comparison Echo appears to be sailing along well. Despite this state of affairs, it may only take a small amount of good news to provide a catalyst to kick Crown's share price higher come reporting time.
