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Crown tight-lipped on VIP fix

Trevor Chappell  |  04 Aug 2017Text size  Decrease  Increase  |  

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MELBOURNE [AAP] Crown Resorts (ASX: CWN) will wait until all its employees jailed in China are released before saying how it plans to address a big slump in its high-rolling gambling business.

The last five of 16 Crown employees who were jailed in China after pleading guilty to gambling crimes are expected to be released in mid-August.

Crown, whose biggest shareholder is billionaire James Packer, says turnover in its VIP high-roller business had plunged by 49 per cent to $33 billion in the 2016/17 financial year. VIP play at Crown's Melbourne and Perth casinos was hit hard, after China's crackdown on gambling and gambling promotion deterred visits from Chinese high-rollers.

Crown also exited its joint-venture casinos in Macau following the detention of its employees in China.

Executive chairman John Alexander says a large proportion of Crown's VIP business had been based on Chinese high-rollers but, following the detentions, the company wanted to be very cautious.

He said Crown no longer had a sales force in China, took a very cautious view toward marketing and would not comment on China or how it will generate more activity in the VIP business until the last employee is freed.

"Until the detentions are finally resolved, we're basically just stepping back from an aggressive position in the VIP market," Mr Alexander told reporters.

"Wait 'til the China situation is resolved and then we're going to sit down and consider our long-term position."

Mr Alexander also played down Crown's potential interest in Japan's gambling market as the Japanese government moves to finalise regulations allowing integrated casino-resorts.

""It (Japan) is certainly not a priority, let's leave it at that," he said.

Crown on Friday booked a 96.7 per cent lift in annual profit to $1.9 billion, but stripping out significant items and variations in the theoretical win rate against high-rollers, "normalised" net profit was down 15.5 per cent at $343.1 million.

Reported net profit was boosted by a $1.6 billion gain from significant items, mostly from the sale of Crown's share in its former Macau joint-venture Melco Resorts & Entertainment.

Crown's main-floor gaming revenue at its casinos in Melbourne and Perth was down 1.4 per cent to $1.7 billion, with Melbourne flat and Perth soft. Mr Alexander said a 12.7 per cent drop in normalised revenue for the Australian casinos was primarily due to the fall in VIP play.

Crown also announced a new share buyback of 29.3 million shares, after completing a $500 million buyback of about 39.5 million shares in June.

Crown shares were 41 cents, or 3.2 per cent, lower at $12.36 at 3pm today.

VIP GAMBLING WEIGHS ON CROWN FY RESULTS

* Statutory annual net profit up 96.7pct to $1.87b

* Normalised net profit down 15.5pct to $343.1m

* Normalised revenue for Australian casino-resorts down 12.7pct to $2.82b

* Final dividend down 24pct to 30 cents, 60pct franked

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