Crown puts hold on dividends

Covid, probes hit casino group

CROWN Resorts has posted a massive full-year loss and reached a deal with its bankers to suspend dividend payments until at least halfway through the financial year.

The under-fire casino group dived to a full-year loss of $261.6m after it battled Covid shutdowns that cost the company’s bottom line $120.6m.

It has also had mounting costs related to the scrutiny of two state royal commissions.

It means the group’s 37 per cent shareholder, James Packer, will go without a payout for another year, and potentially longer if the Victorian or West Australian royal commissions into the group follow NSW in revoking Crown’s casino licences in their respective states over money-laundering concerns.

Mr Packer’s ability to sell off his shareholding in Crown has also hit another road block, with the company confirming it had ceased discussions with US private equity giant Oaktree about funding a $3bn buyout of his shareholding. But incoming Crown CEO and former Lendlease boss Steve McCann – taking the reins following executive chairman Helen Coonan’s resignation last week – said the group would not rule out future takeover offers.

That is despite Crown knocking back an $8bn takeover bid from Blackstone and a $12bn merger proposal from Star Entertainment earlier this year.

“We will consider all options to maximise shareholder value in the context of however the regulatory environment plays out, and what the constraints might be that come from that,” he said.

Crown’s group revenue fell 31 per cent to $1.53bn, but some relief came in the form of a $179.6m JobKeeper wage subsidy from the Morrison government.

Aside from the Covid impacts, the burden of the NSW inquiry and two royal commissions more than doubled corporate costs to $111.6m as legal bills mounted and insurance premiums shot up.

Chief financial officer Alan McGregor told shareholders this cost may never revert to historical levels of less than $50m.

Crown said, in return for a waiver of certain events of default that would “otherwise arise” if its licence was lost or if any of its licences were revoked in the future, it would withhold dividend payments for the next half year.

Mr McCann said beyond that point, Crown should return to paying dividends if it retained its casino licences and lockdowns lifted for good.

Crown shares closed 1c down at $9.31.