Echo Entertainment Group Ltd. (EGP) Chief Executive Officer John Redmond will step down after only about a year in the role, the casino company said today as it reported a 31 percent slump in first half earnings.
Redmond, who started in the role Jan. 18 last year, will leave the company in about three months and be replaced by Chief Financial Officer Matt Bekier, according to a regulatory filing. Net income in the six months ended December was A$46 million ($41 million) as the company lost money on interest rate derivatives and won fewer-than-expected bets against high-rolling VIP gamblers.
Echo is facing competition from billionaire James Packer’s Crown Resorts Ltd. in Sydney, where its Star site currently has a casino monopoly, and from new entrants in Queensland state where it has the only casinos in Brisbane and the Gold Coast. Redmond, a former chief executive of MGM Grand Resorts had promised to bring his expertise in managing large, Las Vegas-style casino resorts to help Echo capitalize on Asian gamblers and tourists.
“We are fortunate to have had the leadership of a man of John’s calibre,” Chairman John O’Neill said in a statement. Redmond had “established solid foundations for profitable future growth” and was returning to his home in the U.S. for personal reasons, O’Neill said.
The shares fell 0.4 percent to A$2.31 at 10:19 a.m. in Sydney, compared with a 0.2 percent rise in the benchmark S&P/ASX 200 index.
Bekier, who has been Echo’s chief financial officer since it was spun out of Tabcorp Holdings Ltd. in 2011, will take on the chief executive role after a three-month transition, the statement said.
There was “soft underlying consumer sentiment” during the first half of the year, O’Neill said, driving sales to domestic visitors and gamblers down about 3.5 percent from a year earlier. Echo cut its average commission and rebates that are used to lure VIP gamblers, and normalized gross revenue in that business fell 9 percent over the period, the company said.
The A$46 million profit missed the A$56 million median estimate of four analysts surveyed by Bloomberg News.
Echo last month announced plans to sell its Townsville casino for A$70 million and said today it was seeking development approvals to spend A$345 million expanding and refreshing its casino in the Gold Coast south of Brisbane.
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