Billionaire James Packer, who stepped down in August as chairman of Crown resorts, isn’t that happy with the returns from the casino business he used to head.
“We have to get better at achieving an acceptable return on the capital expenditure we spend in Australia,” he told the company’s annual general meeting in Melbourne.
The latest results show full year normalised net profit down 17.9% to $525.5 million.
Crown Melbourne’s results were good but business at Crown Perth was subdued.
“The capex we’ve spent in Australia hasn’t delivered the returns we budgeted on,” Packer said.
Packer says the Australian operations had previously been sheltered by the good returns from the casino opertaions in Macau. However, there was no nowhere to hide because Macau revenue had dropped.
Macau earnings have fallen mainly because of a regulatory crackdown by China authorities. This chart shows the declining contribution to Crown from Macau:
In Macau, Crown’s share profit for the year to June 2015 was down 44.6% to $161.3 million.
Crown CEO Rowen Craigie told the AGM Macau is experiencing a difficult period which has adversely affected all casino operators.
Overall gross gaming revenue across the Macau market fell 26.8% for the year.
However, Craigie says the company believes Macau remains the world’s most important and exciting gaming market over the longer term.
Crown shares are up 2.6% today to $11.89.