Shares in Echo Entertainment (EGP) eased more than 2% yesterday, despite the big rise in the wider market, after the casino group revealed a solid rise in interim profit and a lift in dividend.
Echo said it more than doubled its first half profit thanks to strong revenue and earnings growth from its flagship Sydney casino, The Star.
Echo said net profit of $97.1 million for the six months to December 31 was up from $46.1 million a year ago, after a 25% lift in revenue in the half year to $1.09 billion.
That saw the interim dividend lifted a quarter or 1 cent to five cents a share.
And yet the shares eased 2.3% to $4.13.
EGP 1Y – Echo improving at The Star
Normalised earnings before interest, tax, depreciation and amortisation was up 31.5% to $261.4 million, which is slightly ahead of its guidance of between $245 million and $260 million.
And reported EBITDA was $239.6 million, after taking into account the $1 million after-tax gain on the sale of Jupiters Townsville and $9 million outlay in the bidding process for the Queen’s Wharf Brisbane development against Crown Resorts.
Chief executive Matt Bekier said the half year finished "well ahead of guidance provided at the AGM".
The company forecast a normalised earnings before interest, tax, depreciation and amortisation range of $245 million to $260 million, and delivered a normalised EBITDA of $261 million.
The company said the result flowed from a strong performance from The Star, which lifted revenue 39% compared to December half of the 2013 year.
“The $870 million refurbishment of the property that was completed at the end of 2011, now delivering on the board’s and management’s expectations,” the CEO said yesterday.
The Star reported an actual EBITDA of $160.8 million, up 19.5% on the previous corresponding period.
