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UPDATE 1-Australia's Star casino group posts record Asia gambling activity

Published 26/08/2016, 10:26 am
© Reuters.  UPDATE 1-Australia's Star casino group posts record Asia gambling activity
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* Normalised NPAT A$241 mln vs A$238 mln analysts

* VIP turnover at record levels

* Company spending over A$500 mln on refurbs, new casino (Adds commentary, additional earnings information)

SYDNEY, Aug 26 (Reuters) - Australia's second-largest casino company Star Entertainment Group Ltd SGR.AX said on Friday its full-year net profit rose 15 percent, missing analysts' expectations even though revenue from wealthy Asian visitors hit a record high.

Net profit totalled A$194.4 million ($148.13 million) for the year to June 30, the company said, short of analyst expectations of about A$238 million. The company's shares fell 3 percent in early trade, underperforming the broader market.

Turnover from the "International VIP" unit, which involves selling tourist packages to high rollers in China and elsewhere in Asia, grew 7 percent to a record A$49.5 billion, although the win rate among VIP gamblers was higher than usual.

Profit grew because of "a combination of improved marketing, loyalty programme, sales activity, product offering and stronger macro-economic conditions", the company said in a statement.

As a Chinese government crackdown ravages the casino industry in Asian gaming hub Macau, Star and larger Australian rival Crown Resorts Ltd CWN.AX are refurbishing and building new casinos in Australia's tourism hotspots to capitalise on the exodus of big-spending Chinese gamblers.

China provided the biggest boost in Australian visitor numbers in the year to June 30, official data said, up 22 percent, and now accounts for the most foreign tourists in Australia of any country apart from neighbouring New Zealand.

While Crown plans to build a A$2 billion casino near Star's flagship complex on the Sydney waterfront, Star has trained its attention on a new development in the country's No. 3 city Brisbane, 1,000 km (600 miles) closer to Asia and warmer.

The company said it planned to spend A$120 million on the Brisbane resort plus up to A$425 million more overhauling existing casinos in Sydney and the Gold Coast.

While Star's profit missed analyst expectations, the company said its "normalised" profit, which includes a calculation to standardise its win rate from year to year, jumped 23 percent to A$241.3 million.

Star did not give guidance on the current financial year but said gambling volume and win rate of its VIP business is currently "tracking in line with management's expectations".

The company declared a final dividend of 7.5 cents per share, up 25 percent on the previous year.

($1 = 1.3123 Australian dollars)

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