Crown Resorts Ltd (ASX:CWN) is suing the NSW Government

Crown Resorts Ltd (ASX:CWN) is suing the NSW Government.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Crown Resorts Ltd (ASX: CWN) reported its FY18 result today, as covered here by my colleague James Mickleboro.

One interesting piece of news to come out of the market releases was that Crown is suing the Barangaroo Delivery Authority (BDA), an NSW Government agency.

Why on earth would Crown do that?

"The proceedings seek injunctive relief and declarations against the BDA that, in substance, require the BDA to comply with a number of its contractual obligations under the Crown Development agreement (CDA).

"These obligations include consulting with Crown about any application for the proposed development of Central Barangaroo that differs from that provided for in the relevant Concept Plan for Central Barangaroo in existence at the time the CDA was entered into, and negotiating in good faith and agreeing with Crown and Lendlease Group (ASX: LLC) any required changes to that application to ensure that sight lines from the Harbour Bridge to the Sydney Opera House are retained for the Crown Sydney Hotel Resort."

Essentially, Crown are saying that the BDA have approved a building that will block Crown Sydney's views of the Sydney Harbour Bridge and the Sydney Opera House.

Just think how much more houses are worth when they have sea views, then add millions onto this situation with a huge development like Crown Sydney.

Crown are planning for Crown Sydney to be a six-star hotel with harbour views. It has been constructed to the sixth level so far and is projected to be completed by the end of FY21 at a cost of $2.2 billion.

This is obviously going to create an enormous amount of extra earnings for Crown if all goes to plan. I think this is one of the best reasons to invest in Crown shares for the long-term.

Foolish takeaway

Crown is currently trading at 23x FY19's estimated earnings. I don't think the view sue news damages the investment thesis, but it's hard to say whether Crown is good value today. If you can be patient for the next three years, then FY22's result could make today's price look cheap.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Crown Resorts Limited. 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.

More on Share Market News

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why BHP, Catalyst Metals, Mesoblast, and Pilbara Minerals shares are shooting higher

These shares are ending the week with a bang. But why?

Read more »

Disappointed man with his head on his hand looking at a falling share price his a laptop.
Share Fallers

Why 29Metals, Atlas Arteria, DroneShield, and Yancoal shares are falling today

Let's see why these shares are ending the week in the red.

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

The Mesoblast share price just rocketed 38%! Here's why

ASX investors just sent the Mesoblast share price up 38%. But why?

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Record Highs

Big ASX 200 news! Market hits 8,700-point record high

It's a historic day for the ASX.

Read more »

Miner with thumbs up at mine
Broker Notes

Up 55% this year, does Macquarie rate Gold Road Resources shares a buy, hold or sell?

Does this strong performing gold miner have more room to run?

Read more »

Two happy woman on a couch looking at a tablet.
Opinions

Why I'm excited to see the results of these ASX 200 shares

These stocks could reveal very interesting insights.

Read more »

couple having a happy discussion with a banker
Healthcare Shares

Expert: 4 ASX healthcare stocks to buy ahead of reporting season

Could these ASX healthcare stocks be good additions to your portfolio?

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Broker Notes

Morgans names 3 ASX stocks to buy

The broker is feeling very positive on the investment opportunities here.

Read more »