Crown revenue down 31.3% to $1.54bn in chaotic FY2020-21

Australian land-based operator Crown Resorts saw revenue fall 31.3% to AU$1.54bn (£817.7m/€952.1m/US$1.13bn) in an eventful year ended 30 June 2021, characterised by lockdowns and three inquiries into the business’ suitability to operate.

Crown interim chairman Jane Halton said the combination of the novel coronavirus (Covid-19) pandemic and state-level inquiries into each of the operator’s properties meant the year was particularly difficult.

“2021 has been a challenging year for Crown, with intense regulatory scrutiny and unprecedented impacts on business operations from the Covid-19 pandemic,” she said.

Non-gaming revenue, which includes wagering, was Crown’s largest source of income, as it came to $651.1m, down 9.4%.

Main gaming floor tables, meanwhile, brought in $412.9m, down 40.0%, while main floor gaming machine revenue was down 14.0% to $548.9m.

VIP revenue completely collapsed, thanks mostly to strict travel restrictions for entering Australia. This total was down from $306.7m in 2019-20 to just $6.9m in 2020-21.

Breaking revenue down by segment, the flagship Crown Melbourne property brought in $582.5m, a 60.5% drop as it faced extended closures for much of the year.

The majority of Crown Melbourne’s revenue, at $406.9m, came from its main gaming floor, a 54.3% decrease. From this total, $241.2m was generated by table games, down 54.3%, while machine revenue was down $165.7m to 51.5%.

VIP gaming fell to almost nothing from $352.3 in 2019-20, while non-gaming revenue dropped 52.8% to $171.2m.

Crown Perth fared better and became the operator’s leading property, as revenue grew 21.1% to $613.3m. Main floor machines brought in $306.6m, main floor tables $171.7m and non-gaming revenue $264.1m.

“Crown Perth reopened with restrictions towards the end of June 2020 and remained open for the entirety of the first half, trading above expectations,” Crown chief financial officer Alan McGregor said. “Crown Perth faced several short-term closures throughout the second half, and while trading performance has rebounded quickly following each shutdown, overall performance moderated throughout the course of the year.”

Crown Sydney – which is not yet licensed to host gambling after the Bergin Inquiry determined Crown was “unsuitable” to hold a licence – brought in $68.6m, all from non-gaming sources. Crown may still be allowed to operate gaming in the future if the state of New South Wales – which recently implemented changes of its own in response to the inquiry – is satisfied it can be a suitable licensee.

Crown’s wagering and online division brought in $147.0m, an 8.5% increase. The Crown Aspinalls members-only club in the UK took in $2.1m.

The business made a further $207.8m on the sale of apartments in Crown Sydney, which was counted separately from its revenue.

However, expenses only dipped slightly to $1.98bn. Employment costs remained the largest expense, at $695.4m, down 6.0%.

Taxes and levies declined 12.3% to $373.1m, while depreciation and amortisation expenses rose 5.5% to $290.3m. Other costs included $112.7m in costs of sales, $102.7m in property costs and $28.0m in asset impairment.

After these costs and an $8.7m loss from businesses in which it holds a non-controlling stake, Crown made a loss before tax and finance costs of $239.5m. Adding in $69.1m in costs for financial items, Crown’s pre-tax loss was $308.6m.

The business then received a $47.3m tax benefit, resulting in a final loss of $261.3m. 

The business continues to face difficulties going forward. Crown Melbourne closed again on 5 August in what was initially a seven-day lockdown, but has remained closed since. 

Meanwhile, Crown still awaits the outcome of reports into its suitability to hold a licence for each of its two Australian properties that currently hold gaming licences. In July, Adrian Finanzio, the counsel assisting the Victoria state commission into Crown Melbourne, told that inquiry that Crown was “not a suitable licensee”.

Following the Bergin Inquiry, Crown made a number of major personnel changes. Ken Barton resigned as chief executive, with then-chairman Helen Coonan taking over on an interim basis. Steve McCann was later appointed as Barton’s full-time replacement.

Last week, the operator announced that Dr Ziggy Switkowski would take over as Crown’s new chairman.

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