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CR62-p60&61-Business0&2:SJC-Casino Review 25/11/07 02:13 Page 1
Packer splits business
and eyes North America
While casinos might
splashingout Crown Macau, plus 50 per cent venture with CVC Asia Pacific
have been Kerry
PBL/CROWN share in UK operator Aspinalls, earlier this year for A$5.2bn
are now part of Crown. (3bn euros), he is already in
Packer’s pleasure,
Shareholders in James Shareholders will receive talks for casinos in North
they are very much
Packer’s Publishing & Broad- a share in each of the new America that would see him
James Packer’s
casting Ltd (PBL) have decided companies for every PBL spend nearly all that money.
to split the company in two, share they own plus A$3 Although the company has
business as he
separating its media interests (1.77 euros) in cash; the not revealed its target, com-
expands and
from its gaming businesses. Packer family company, Con- mentators believe that Packer
develops his
The long expected move solidated Press Holdings Ltd, has been in detailed talked
interests in the
sees the creation of two new retains a 38 per cent share in with Harrah’s to acquire the
companies: Consolidated both CMH and Crown. famous Chester Casino and
gaming industry all Media Holdings Ltd (CMH) Packer’s strategy is to Racetrack in Pennsylvania for
over the world.
takes over the remaining TV allow the maximum flexibil- more than A$2bn (1.18bn
channels, websites and ticket- ity to develop his gaming euros). Chester has only oper-
ing concerns, while the interests, and he is not ated slot machines since
casinos in Melbourne and holding back. Having sold off January and has now has
Perth, the 41 per cent share of 75 per cent of the TV and mag- more than 2,700 in 9,300sq
Melco PBL, which operates azine business into a joint m. Harrah’s itself is the
process of being acquired for
$17bn (11.5bn euros) by
private equity companies
TPG and Apollo Management
in the biggest deal ever in the
gaming industry.
Any purchase would be machines. In November, PBL A$1.3bn (767m euros).
subject to regulatory also announced that Cana- In April, Packer also bought
approvals which could take dian regulators had approved a 19.6 per cent stake in
up to 18 months to obtain. the acquisition of Gateway Fontainebleau Resorts, which
There are reports that Casinos, which operates nine is building a new venue at the
Crown could also buy the venues in the country, north end of the Las Vegas
Meadows Racetrack and through a 50-50 joint venture Strip on the site of the former
Casino, not from Chester, with Macquarie Bank. The El Rancho and Algiers casinos.
which has 1,700 slot deal, agreed last April, is worth It is expected to open in 2009.
Rapid expansion
affects Olympic profits
upsanddowns Latvia and Lithuania account- and delays in the launch of
OLYMPIC ENTERTAINMENT GROUP ing for another 30 per cent casinos in Ukraine and
and 18.5 per cent respectively. Belarus.”
Now quoted on two stock The company’s Polish opera- At the start of the year,
exchanges, Tallinn and tions have now overtaken its Olympic predicted an annual
Warsaw, Olympic Entertain- Ukrainian operations in terms growth in revenues 60 per
ment is showing revenue of revenue generated. cent to 2.67bn kroons (170.5m
growth that will keep share- In a statement the euros) and an operating profit
holders in both places company said: “The revenue of 595m kroons (38m euros).
encouraged, despite a drop in and profit for the first nine The company has now revised
operating profit and margins months of 2007 were influ- its predictions downward to
in the first nine months of the enced by major third-quarter annual revenues of 2.3bn
year and a revised profits wins at the Polish Sunrise kroons (147m euros) generat-
forecast. Casino, which reduced ing an operating profit of
Revenues from the group’s revenue by about 10m kroons 450m kroons (28.8m euros).
114 casinos reached 1.69bn (640,000 euros). In addition, The company is blaming
kroons (108.1m euros), up operating results were unexpected delays in the
45.7 per cent on the first nine adversely affected by the con- acquisition and opening of
months of 2006. However the tinuing renovation of the hotel new casinos.
net profit decreased over the building where our leading Olympic’s biggest cost is
same period by two per cent casino in Kaunus [Lithuania] is staff, whose ranks swelled by
to 283.3m kroons (18.1m situated, a decline in the more than 59 per cent com-
euros) as the net margin fell revenue generated by our pared to the first nine months
from 24.9 per cent to 16.7 per Rocca al Mare and Grand of 2006. As at the end of Sep-
cent. Nearly 37 per cent of the Hotel Tallinn casinos in tember 2007, there were 3,779
company’s revenues were Estonia (caused by the reno- employees, of whom 1,055
generated in Estonia, with vation of related premises) were in Latvia.
60 December 2007 businessnews
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