Shares in the Aussie casino operator are edging higher on Monday morning
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After a wobbly start, the Crown share price is now up 0.64%, trading at $9.38.
Crown share price lifts as profit slumps 429%
Crown released its results for the year ended 30 June 2021 (FY21), including the below takeaways:
Revenue down 31.3% on the prior corresponding period (pcp) to $1,536.8 million
Earnings before interest, tax, depreciation and amortisation (EBITDA) down 77.4% on pcp to $114.1 million
Net loss after tax attributable to parent down 429.1% on pcp to $261.6 million
No final dividend
The Crown share price is slumping this morning as investors process the latest results. The company also announced Dr Ziggy Switkowski will join the board of directors as chair following all necessary approvals.
What happened for Crown in FY21?
In today’s release, Crown advised that COVID-19 restrictions continue to weigh on operations and earnings. Tight restrictions across the eastern seaboard have limited foot traffic and turnover at key Crown casinos.
Crown reported closure costs of $120.6 million (net of tax) across Crown Melbourne, Crown Perth and Crown Aspinalls during the year. The Aussie casino operator described FY21 as “challenging” with intense regulatory scrutiny and COVID-19 impacts.
Crown Perth delivered strong performance despite 27 days of closure while Crown Sydney apartment sales reached over $1 billion in gross sales and pre-sales to date.
It’s been a tough 12 months for Crown and its share price. Aside from COVID-19 restrictions, the company is under pressure amid a Royal Commission and multiple inquiries.
What did management say?
Crown’s interim chair Jane Halton said:
2021 has been a challenging year for Crown, with intense regulatory scrutiny and unprecended impacts on business operations from the COVID-19 pandemic.
Looking ahead, COVID-19 continues to create uncertainty, with variable operating restrictions remaining a feature of everyday life and likely to continue to materially influence business performance.
Company CFO Alan McGregor added:
Unfortunately, COVID-19 related restrictions are continuing to impact performance as we enter the 2022 financial year. Crown Melbourne has been closed for the majority of this financial year, whilst stay at home orders were imposed in Sydney on 26 June 2021 and remain in place.
What’s next for Crown and its share price?
Crown has reached an agreement with its relationship banks on restructuring its financing arrangements, including an extension of near-term maturities. The additional flexibility includes a waiver of the 31 December 2021 covenants and an additional $250 million debt facility commitment.
The Crown share price was down 5.9% in 2021 prior to Monday’s open, compared to a 12.0% gain for the S&P/ASX 200 Index (ASX: XJO).
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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.