October 15, 2010
Current Price 8.78
52 Week High/ Low 7.41 - 9.16
Shares Outstanding (in mn) 758.39M
Market Cap (in $ mn) 6.66B
Earnings Per Share 0.39c
Recommendation: Key Developments:
Before the Financial Crisis Crown was trading This week James Packer Bought Over $150m of
close to $14 per share, now that the company Crown ASX:CWN
has survived the downturn and has returned to
James Packer bought 22.6 million Crown shares at
profitability I expect the shares to run toward
$16 in 2011.
The buying increased Consolidated Press Holdings'
Crown casinos are in the midst of a massive
grip on Crown by slightly less than 3 per cent to 43
$1.1 billion-plus refurbishment and expansion
program that Packer presumably believes will
increase their returns significantly. Both David Gyngell, who joined the company's board last
casinos are adding substantial new gaming month, opened his shareholding account with a
capacity. stock purchase of $100,165.
James Packer has now spent just over $400 million
buying Crown shares in the past 12 months.
About the Company
Crown Limited (Crown) ASX:CWN is an Australia-based company. The Company is engaged in gaming and
entertainment business. Crown wholly owns and operates two integrated resorts: Crown Entertainment
Complex in Melbourne (Crown Melbourne) and Burswood Entertainment Complex in Perth (Burswood).
As of June 30, 2010, Crown Melbourne operates 2,500 gaming machines and 350 table games. Crown
Towers hotel comprises 480 guest rooms. Crown Promenade hotel comprises 465 guest rooms. Crown
Metropol hotel, which opened in April 2010, comprises 658 guest rooms.
Burswood operates 1,750 gaming machines and 170 table games. Melco Crown has two properties, City
of Dreams and Altira Macau. The InterContinental Perth Burswood hotel comprises 405 guest rooms.
Holiday Inn Burswood hotel comprises 291 guest rooms.
In addition, Crown owns a portfolio of gaming investments that have been accumulated to complement
Crown's existing core businesses. These include interests in:
Betfair Australasia Pty Ltd: an online betting exchange;
Cannery Casino Resorts LLC: operates four casinos in Nevada and Western Pennsylvania in the
USA catering to local and regional customers;
Aspinall Holdings (Jersey) Limited: a casino business in the United Kingdom; and
Other North American investments: minority investments in Harrah's, Gateway Casinos &
Entertainment, Stations Casinos and Fontainebleau Resorts.
Evolution of the Company
Crown Limited assumed ownership of all of the gaming assets previously owned by Publishing and
Broadcasting Limited (PBL) as part of a members' scheme of arrangement between PBL and its members
PBL was formed in 1994 and grew to be one of Australia's largest diversified media and entertainment
groups. PBL's core businesses and investments were gaming and entertainment; with strategic
investments in television production and broadcasting; magazine publishing and distribution; and key
digital media and entertainment businesses. In 1999 Crown Limited, the original owner and developer of
the Crown Entertainment Complex in Melbourne merged with PBL.
Crown Entertainment Complex
The Crown Entertainment Complex in Melbourne is one of the largest integrated resorts in the southern
hemisphere with its casino, hotels, function rooms, restaurants, shopping and entertainment facilities.
The casino currently features 2,500 electronic gaming machines and has approval to operate 500 table
games. The Crown Melbourne casino licence extends to 2033. Crown Melbourne operates one of the
largest single-site VIP operations in the world. Its three hotels offer approximately 1,600 rooms, including
31 luxury villas. For further information visit the Crown Melbourne Website..
Burswood Entertainment Complex
Burswood Entertainment Complex The Burswood Entertainment Complex was acquired in 2004.
Burswood is Perth's premier integrated resort encompassing a casino, two international hotels, a state of
the art convention centre, the 21,000 seat Burswood Dome and award-winning food and beverage
The casino has approval for 2,000 electronic machines and 220 table games. The casino license extends
for the life of the Burswood Property Trust (currently until 2060). Like the Crown Entertainment Complex
in Melbourne, it has an extensive international VIP clientele. Burswood is in the unique position of being
the only venue in Western Australia to offer electronic gaming and table games. For further information
visit the Burswood website.
Melco Crown Entertainment Limited
Melco Crown Entertainment Limited (Melco Crown) was initially established as a joint venture company
in 2004 with Hong Kong listed Melco International Development Limited to pursue new gaming ventures
in Macau. Melco Crown is a developer and owner of casinos and entertainment resort facilities. It is
focused on the Macau market and is one of six companies granted concessions or sub concessions to
operate casinos in Macau. Melco Crown's operating businesses include City of Dreams, Altira Macau and
the Mocha Clubs.
Melco Crown listed its American Depository shares on the NASDAQ under the symbol Melco Crown in
December 2006. As at September 2010, Crown's interest in Melco Crown was approximately 33.6%. For
further information visit the Melco Crown website.
Betfair Australasia Pty Ltd (Betfair) is a joint venture company which was established in 2004 with Betfair
UK (The Sporting Exchange Limited) in which Crown has a 50% interest. Betfair is a betting exchange for
customers resident in Australia or New Zealand. A betting exchange operates an online market where
individuals with differing views on an event make fixed-price bets, effectively wagering between
themselves. Betfair does not operate retail premises, nor does it have an on-course presence; its services
are exclusively provided via the internet or telephone.
Cannery Casino Resorts
Crown holds a preferred instrument in Cannery Casino Resorts which is based in the US and has the
The Meadows Racetrack & Casino, Pittsburgh, Pennsylvania; and
Cannery Casino, East Side Cannery and Rampart Casino in Las Vegas.
Crown is seeking regulatory approval in the US to have the preferred instrument converted to an equity
interest representing 24.5% of the outstanding equity of Cannery Casino Resorts.
Aspinalls Holdings (Jersey) Limited
Crown holds a 50% interest in Aspinalls Holdings (Jersey) Limited. Aspinalls is a long-established casino
company, whose subsidiaries operate the renowned Aspinall's Club in London's Mayfair and three
regional casinos in Newcastle, Swansea and Northampton (the latter in a joint venture with Kerzner UK
Other North American investments
Crown holds a 2.5 percent stake in Harrah's Entertainment Inc, a 1 percent stake in Gateway Casinos &
Entertainment, a 4.9 percent stake in Station Casinos and a 19.6 percent equity interest in Fontainebleau
Revenue Streams and Distribution Channels
Crown Limited (ASX: CWN) results for the full year ended 30 June 2010:
• Normalised1 NPAT of $288.4 million, up 2.7%
• Reported2 NPAT of $292.3 million, up 20.7%3
• Australian casinos achieved further growth:
⎯ normalised revenue growth of 5.9% to $2,292.4 million
⎯ normalised EBITDA4 growth of 6.1% to $657.2 million
⎯ reported EBITDA growth of 7.3% to $692.9 million
⎯ normalised EBIT growth of 4.8% to $494.1 million
⎯ reported EBIT growth of 6.4% to $529.8 million
⎯ main floor gaming generated revenue growth of 1.6%
⎯ VIP program play turnover of $39.7 billion was up 14.1%
⎯ non-gaming revenue growth of 9.6% to $483.4 million
• Final dividend of 19 cents per share announced (total full year dividend of 37 cents per share –
representing 97% of normalised NPAT)
2010 Annual Report - INTERACTIVE VERSION
The Chief Executive Officer of Crown, Mr Rowen Craigie, said:
“Overall, the results for Crown’s wholly-owned Australian casinos, Crown Melbourne and Burswood,
were reasonable. Our local casino operations were adversely impacted due to a softening in consumer
sentiment and corporate hospitality spending and a greater than expected impact of refurbishment
works at the two properties. Specifically, premium table revenue at Crown Melbourne and main floor
gaming revenue at
Burswood were impacted by major renovations.”
“VIP program play grew a solid 14.1% with revenue of $536.0 million. However, the growth rate in VIP
Program play moderated in the second half with some initial impact being seen from the opening of the
two new integrated resorts in Singapore.”
“Non-gaming revenue grew by 9.6%, benefiting from the opening of the Crown Metropol hotel, as well as
a number of new food and beverage outlets in Crown Melbourne.”
Company Industry Sector S&P 500
Quick Ratio (MRQ) 0.62 3.07 0.57 0.82
Current Ratio (MRQ) 0.65 3.23 0.72 0.99
LT Debt to Equity (MRQ) 20.85 17.37 19.58 125.77
Total Debt to Equity (MRQ) 24.80 19.95 33.66 183.38
Interest Coverage (TTM) -- 0.03 0.38 31.37
Company Industry Sector S&P 500
Gross Margin (TTM) 23.11 5.61 8.38 32.27
Gross Margin - 5 Yr. Avg. -- 42.65 24.19 28.97
Company Industry Sector S&P 500
Dividend Yield 4.22 3.36 1.11 1.66
Dividend Yield - 5 Year Avg. -- 2.36 1.35 2.55
Dividend 5 Year Growth Rate -- 10.42 1.85 -7.34
Payout Ratio(TTM) 96.00 12.36 10.51 35.82
Shayne Heffernan of Ebeling Heffernan prepared this report, Mr Heffernan holds a PhD in Economics
serves as CEO of Heffernan Holding Inc and Co Founder of Ebeling Heffernan www.ebeling-heffernan.com
Ebeling Heffernan (EH) distributes research and other information purchased and compiled from outside sources and analysts. This
report/release/advertisement is a commercial advertisement and is for general information purposes only. Do not base any investment decision
on information in this report/release/advertisement. EH is not a registered Investment Advisor or a member of any association for other
research providers. Under no circumstances is this report/release/advertisement to be used or considered as an offer to sell or a solicitation of
any offer to buy any security or other debt instruments, or any options, futures or other derivatives related to such securities herein. All
information herein is not intended to be used for investment advice. Price Targets are academic theory and should not be relied upon. The
majority of these profiled companies are highly risky OTC Bulletin Board or Pink Sheet companies. All readers of this information indemnify EH
from any liability for all accessed information. EH will not be responsible for updating any of its information in its report/release/advertisements.
EH advises recipients of all such data to be validated from the issuing company including all statistical information derived from SEC filings, from
data sources or financial information and data from the issuing company contained herein. The reader should seek professional financial advice,
verify all claims and do his/her own research and due diligence before investing in any securities mentioned. EH will not be liable to any person
or entity for the quality, accuracy, completeness, reliability or timeliness of information in this report/release/advertisement, or for any
direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information, products or services from any
person or entity including but not limited to lost profits, loss of opportunities, trading losses, and damages that may result from any
incompleteness or inaccuracy in any of EH’s profiled companies. When paid in stock, EH its affiliates, directors, officers, outside sources, investor
awareness groups and employees may liquidate shares at any time or hold for investment purposes. Readers are advised to review SEC periodic
reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D, www.sec.gov.nasd.com, www.pinksheets.com, www.sec.gov
and www.finra.com. SPC is compliant with the Can Spam Act of 2003. Investing in micro cap and small cap securities is speculative and carries a
high degree of risk. Investors can lose their entire investment. The Private Securities Litigation Reform Act of 1995 provides investors a 'safe
harbor' in regard to forward-looking statements. EH cautions all investors that such forward-looking statements in this
report/release/advertisement are not guarantees of future performance. Investors should understand that statements regarding future
prospects may not be realized. This report/release/advertisement does not have regard to the specific investment objective, financial situation,
suitability, and the particular need of any specific person who may receive this report/release/advertisement. Investors should note that income
from such securities, if any, may fluctuate and that each security's price or value may rise or fall substantially. Accordingly, investors may receive
back less than originally invested, or lose their entire investment. Past performance is not indicative of future performance. The Company has
not paid compensation for this commercial advertisement. HCM. has written this commercial advertisement for EH.