How does Crown stack up again Star Entertainment?
The post How does the Crown Resorts (ASX:CWN) earnings result compare to Star Entertainment (ASX:SGR)? appeared first on The Motley Fool Australia. –
The Crown Resorts Ltd (ASX: CWN) share price has gone through some tough months during the calendar year. Since reaching a 52-week high of $13.32 in May, its shares have fallen 30% on the back of regulatory enquiries and COVID-19 impacts.
On the other hand, Star Entertainment Group Ltd (ASX: SGR) has also faced challenging market conditions from snap lockdowns. Its share price hasn’t suffered the same fate though, surging since the release of the company’s full year results.
Let’s see if there are any similarities between the two companies’ reporting numbers.
A recap on the Crown Resorts earnings result
Crown posted its full-year result for the 2021 financial year on Monday, revealing expected losses across the board.
Here’s a summary of the financial details that Crown posted for the full year ending 30 June 2021.
Statutory revenue of $1,536.8 million, down 31.3% on the prior corresponding period;
Reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of $114.1 million, down 77.4%;
Reported net loss after tax of $261.6 million, down 429.1%; and
No final dividend declared.
The weak result came as Crown faced a challenging year, with severe restrictions weighing down on business performance. The Royal Commission and multiple inquiries have also led the company into uncertain times.
At Tuesday’s market close, Crown shares finished the day flat at $9.31.
How does this compare to Star Entertainment?
Star Entertainment revealed its own numbers on August 19, highlighting the struggling casino and gaming market. Here’s a peek at the company’s performance for the 12 months ending 30 June 2021:
Gross revenue of $1,561.1 million, down 20.9% on the prior corresponding period;
Normalised EBITDA of $429.7 million, unchanged;
Normalised net profit after tax of $116.4 million, down 5.2%; and
No final dividend declared.
Star Entertainment also took a hit due to severe disruptions throughout the year. This came from a reduction in operational capacity, particularly in Sydney and Brisbane.
Nonetheless, the group continued to execute its strategy in firming up its balance sheet for a post-COVID-19 world. Star Entertainment also highlighted that it had a number of valuable long-term licences in attractive locations, underscoring its competitive portfolio.
Investors reacted positively to the news, sending the company’s shares within sight of breaking its 52-week high of $4.30. At yesterday’s closing bell, the Star Entertainment share price finished 0.99% higher at $4.08.
Comparing the earnings reports, it’s evident that COVID-19 has caused revenue losses of between 20% to 30% for both companies. However, Star Entertainment has fared better on the bottom line, managing its operating costs and capital expenditure.
Crown share price snapshot
Investors would be disappointed by the 12-month return of the Crown share price, up just 3%. Year to date has fared no better, down 3% following a sharp sell-off during the May to July.
On valuation grounds, Crown presides a market capitalisation of roughly $6.3 billion, with more than 677 million shares outstanding.
Should you invest $1,000 in Crown right now?
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Motley Fool contributor Aaron Teboneras 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.