Casinos operator Crown says it has not yet decided whether it will increase its stake in fellow casinos firm Echo Entertainment Group.
Crown said on Friday that it now holds a 10 per cent interest in Echo, up from the 4.9 per cent interest it previously held.
The announcement by Crown helped push up Echo shares by 50 cents, or 13.16 per cent, to $4.30 on Friday.
The Echo constitution restricts persons having voting power over more than 10 per cent of Echo’s shares without the consent of the NSW Casino, Liquor and Gaming Control Authority and the Queensland Attorney-General.
“Crown is seeking these consents so that it has the ability to increase its voting power in Echo beyond 10 per cent,” Crown said in a statement.
Crown chief executive Rowen Craigie told reporters on Friday that the Crown board had made no decision on what its next step would be in relation to Echo.
“We’re going to await the regulatory approval process,” Mr Craigie said. “Until there’s an outcome there, the board has not made any decision on what the next step may be.”
Mr Craigie said the Sydney casino licence held by Echo was “one of the best licences in Australia”.
“Sydney is Australia’s gateway as far as the rest of the world is concerned,” Mr Craigie said.
Both Echo and Crown have been redeveloping, or are set to refurbish, their properties in a bid to attract more high-rolling gamblers, particularly from China.
Mr Craigie said VIP gamblers from China were always inclined to move around the country and to different casinos.
Crown operates the Crown casino in Melbourne and Burswood casino in Perth, and has a 33 per cent stake in casino operator Melco Crown Entertainment in Macau.
Echo operates The Star casino in Sydney, the Jupiters casino on the Gold Coast, the Treasury casino in Brisbane, and Jupiters at Townsville.
Crown on Friday posted a $274.4 million net profit for the six months to December 31, 2011, up 79 per cent from the $153.1 million profit in the prior corresponding period. Crown said higher win rates against VIP gamblers at its Australian casinos and improved returns from its Macau joint-venture had helped boost the bottom line.
The company said that in the first seven weeks of the second half, main floor gaming revenue at Crown and Burswood were up by 5.7 per cent, and non-gaming revenue was 5.3 per cent higher.
“VIP program play volumes have been reasonable,” Crown said.
Crown chief executive Rowen Craigie said that, overall, the first half results for the Australian casinos were “reasonable” given the challenging operating environment and the state of the consumer economy.
Crown said turnover from VIP gamblers rose 27.7 per cent compared to the previous first half, reflecting the benefits of major redevelopments of the elite gambler areas of Crown’s Australian casinos, especially Melbourne.
Mr Craigie said competition from casino/resorts in Singapore remained, and Crown continued to source new VIP customers from China to offset that.
He said Crown had been attracting VIP gamblers from southern China and was looking more closely now at northern China.
Crown said general gaming activities in the first half posted 5.5 per cent revenue growth compared with the same period in the previous year.
“We are still seeing evidence of a softening in consumer sentiment, while the premium markets continue to exhibit strength,” Mr Craigie said.
“Some parts of the business continue to be impacted by the ongoing refurbishment programs at both properties (Crown and Burswood).”
