Echo Entertainment Group Ltd (ASX: EGP) which operates The Star Casino in Sydney as well as the Treasury Casino in Brisbane and Jupiters Casino on the Gold Coast has reported a solid set of full year results for the financial year (FY) ending 30 June 2015.
Here's what investors need to know:
- Normalised gross revenue was up 20.6% to $2.3 billion thanks to good domestic gaming and strong international VIP rebate business revenues
- Normalised earnings before interest, tax, depreciation and amortisation (EBITDA) leapt 24.1% to $521 million
- Normalised net profit after tax (NPAT) soared 52.2% to $219 million reflecting a strong operating performance and lower interest expense due to lower debt levels
- The full year dividend will total 11 cents per share
Outlook positive
While this time a year ago investors were fretting over the effects of an entry by the James Packer-controlled Crown Resorts Ltd (ASX: CWN) into the Sydney market; this year investors have arguably factored in the increased competition in NSW and are breathing a sigh of relief that Echo has successfully won the bid process for the Queen's Wharf development in Brisbane.
Buy, Hold, Sell?
For some investors it could now be more of a question of which casino stock represents the greatest upside from this point forward. SKYCITY Entertainment Group Limited-Ord (ASX: SKC) has also reported an impressive uplift in full year profit, while Crown is yet to report.
Over the past 12 months, Echo's shares have rallied nearly 60%, SKYCITY's share price has climbed 16%, while Crown's share price is down over 8%. For value investors, arguably Crown's shares could currently be their best bet.
