Aug. 14 (Bloomberg) -- Crown Resorts Ltd., the Australian casino company planning a hotel on the Las Vegas Strip, surged the most in almost a year in Sydney trading after its Macau affiliate fueled a 66 percent rise in full-year profit.
Net income was A$655.8 million ($610 million) in the year ended June 30, the company controlled by billionaire James Packer said in a regulatory statement today. That compares with the A$396 million profit a year earlier.
Growing profits provide extra cash for Melbourne-based Crown as it works on possible projects and ventures in Sydney, Brisbane, Las Vegas, Sri Lanka, Manila and Japan. Crown is the world’s most richly valued gambling company and Macau’s quarterly casino revenues hit a record in the three months to March.
“There’s a lot of cash coming through the business,” Killian Murphy, a Sydney-based analyst at CIMB Group Holdings Bhd., said by phone before the announcement. “Macau has been the gaming market of the last decade.”
Crown shares rose 5.6 percent, the most since Aug. 23, to close at A$15.66 in Sydney, paring this year’s decline to 7.1 percent. The benchmark S&P/ASX 200 index has risen 3.7 percent over the same period.
Packer, Crown’s chairman and controlling shareholder, has quit most of the media investments inherited from his father Kerry in an attempt to capitalize on Asian consumer spending and tourism through casino investments.
Alongside existing resorts in Melbourne and Perth, Crown is building a casino hotel on the shores of Sydney Harbor and considering new projects in Brisbane and Sri Lanka.
City of Dreams
Through its 34 percent share of Hong Kong-based Melco Crown Entertainment Ltd., it also owns a stake in Macau’s City of Dreams casino and is planning new developments in Japan and the Philippines.
Crown is the only gambling company considered investment-grade by all three major ratings companies. It has debt and equity worth about 15.66 times its expected earnings.
After smoothing out the volatility in casino winnings, net income rose 35 percent to A$640 million from A$473.2 million a year earlier. High-rolling VIP gamblers accounted for about 27 percent of Crown’s revenue in 2013 and can have an unusually big impact on reported net income because the amounts they wager are so large.
Regulations around Crown’s planned casino in Sydney require that such VIP gamblers bet a minimum of A$2,160 per hour when playing baccarat, the most popular game in such rooms.
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