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UPDATE 1-Echo posts 59 pct rise in full year net profit

Published 12/08/2015, 10:19 am
Updated 12/08/2015, 10:26 am
© Reuters.  UPDATE 1-Echo posts 59 pct rise in full year net profit
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(Updates with more detail, shares)

SYDNEY, Aug 12 (Reuters) - Australian gaming firm Echo Entertainment Group EGP.AX on Wednesday reported a 59 percent rise in full year net profit after improved marketing and loyalty programs drove strong domestic revenue growth.

Echo and Hong Kong partners Chow Tai Fook Enterprises and Far East Consortium last month won a licence to build a casino in the centre of Brisbane, edging out rival Crown Resorts CWN.AX for a development positioned to benefit from an influx of Chinese high rollers.

Net profit for the year to June 30 came in at A$169.3 million ($123.7 million). Normalised net profit, which removes significant items and the volatility of Echo's international VIP rebate business, which refers to high roller customers who receive perks like luxury accommodation in return for gambling, rose 52 percent to A$219 million.

Revenue rose 18.5 percent to A$2.14 billion.

Chief Executive Matt Bekier said Echo had made a "reasonable start" to the current year, but warned that gross revenue exluding the VIP rebate business had shown only moderate growth in July while revamp works at its Star casino in Sydney and Jupiters on the Gold Coast would impact revenues.

Shares in Echo opened 3 percent lower at A$4.93. The stock has risen about 30 percent so far this year.

Echo is banking on its Brisbane development bringing Chinese high-rollers to Brisbane as an alternative to the Asian gaming hubs of Macau and Singapore. It already gets about 30 percent of its Sydney revenue from Chinese high-rollers, and has said it expects Brisbane would receive about the same.

The involvement of Chow Tai Fook, a quarter stakeholder in the project, gives Brisbane-based Echo a chance to close on Melbourne-based Crown in the battle for high-spending Chinese visitors, the world's biggest and biggest-spending outbound tourism market.

Gaming revenues in Macau, the world's biggest gambling hub, have fallen for the past 14 months as a broader government crackdown on corruption has discouraged wealthy Chinese punters.

($1 = 1.3682 Australian dollars)

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