2018 for Personal Use Only Use Personal for for Personal Use Only Use Personal For
Total Page:16
File Type:pdf, Size:1020Kb
ANNUAL REPORT 2018 For personal use only For personal use only CROWN RESORTS LIMITED ABN 39 125 709 953 Contents Executive Chairman’s Message 2 Financial Performance 4 About Crown Resorts 6 Crown’s Resort Portfolio 8 Australian Projects 10 Australian Resorts 11 International Interests 17 Crown Digital 18 Corporate Social Responsibility 19 Corporate Governance Statement 23 Directors’ Statutory Report 37 Remuneration Report 51 Auditor’s Independence Declaration 73 Independent Auditor’s Report 74 Financial Report 80 Directors’ Declaration 133 Shareholder Information 134 Additional Information 136 Corporate Information Inside back cover Financial Calendar Record date for final dividend 21 September 2018 Payment of final dividend 5 October 2018 Annual General Meeting 1 November 2018 2019 half year results February 2019 For personal use only Annual General Meeting .am (Perth time) Thursday, 1 November 2018 Crown Ballroom Lobby Level, Crown Towers Perth Great Eastern Highway Burswood, Western Australia FRONT COVER IMAGE: PROPOSED CONCEPT RENDER OF CROWN SYDNEY Crown Resorts Limited Annual Report 2018 1 Executive Chairman’s Message Crown is committed to its strategy of focusing on its high quality core Australian operations and development projects as well as maximising shareholder returns. Consistent with our objective to increase cash returns to shareholders, in financial years 2017 and 2018 combined, Crown’s capital management, which included ordinary dividends, a special dividend and two on-market share buy-backs, exceeded $2 billion. Crown has also announced its intention to undertake a new $400 million on-market share buy-back. Looking forward, our focus will be to continue to improve Crown is one of Australia’s largest entertainment groups the underlying performance of our existing businesses as and makes a major contribution to Australian tourism, well as execute on our development project pipeline. employment, training and social responsibility programs. Crown Melbourne Crown’s continued investment in our Australian resorts has ensured that Crown’s portfolio includes some of the most Normalised EBITDA from Crown Melbourne was valuable current and future tourism assets in Australia $645.0 million, up 9.5%. Reported EBITDA was across Melbourne, Perth and Sydney. $586.0 million, up 2.7%, which takes into account an unfavourable variance from the theoretical VIP program We are proud to be the largest single-site private sector play result. employer in both Victoria and Western Australia with approximately 18,000 people working across our resorts in Normalised revenue at Crown Melbourne was over 700 different roles. Crown also continues to be a $2,279.0 million, up 14.2%, with VIP program play up significant tax payer, having incurred more than $650 million 73.9%, main floor gaming up 2.9%, driven by solid growth in taxes to all levels of government in Australia in financial in table games, and non-gaming slightly down. This year 2018, representing over two thirds of Crown’s profit recovery in gaming revenues, combined with all three before tax from its Australian operations. hotels operating at over 90% occupancy, reaffirms Crown Melbourne’s position as Australia’s leading Results integrated resort and one of the most visited tourist destinations in Australia. For the financial year ended 30 June 2018, Crown announced a net profit of $326.7 million before significant Following the end of financial year 2018, the Victorian items, which was up 5.8% from the previous year. This Commission for Gambling and Liquor Regulation (VCGLR) result reflects a solid performance from our Melbourne released its final report concerning the Sixth Review of the operation, with VIP program play turnover up 73.9%, Casino Operator and Licence held by Crown Melbourne. partially offset by continued subdued trading in Perth. The report concluded, among other matters, that Crown Melbourne remains a suitable person to continue to hold A final dividend of 30 cents per share, franked to 60%, its licence to operate the Melbourne Casino. Crown will was declared, bringing the total dividend for the year to continue to work with the VCGLR to improve the 60 cents per share. operations of Crown Melbourne. Major Focus Crown Perth We have maintained our strategy of focusing on our Normalised EBITDA from Crown Perth was $248.8 million, world-class Australian operations and development up 1.6%. Reported EBITDA for the period was $221.5 million, projects as well as maximising shareholder returns. down 13.9%. The reported EBITDA result takes into Our actions over the past year demonstrate our ongoing account an unfavourable variance from the theoretical VIP program play result. commitmentFor personal use only to this strategy. In financial year 2018, we completed the sale of a number of significant assets Normalised revenue at Crown Perth was $844.5 million, up including the Alon Las Vegas land for US$300 million, our 1.7%, with main floor gaming down 2.1%, VIP program play interest in CrownBet for $150 million, our interest in down 5.8% and non-gaming up 12.5%, primarily due to the Ellerston for $62.5 million and our shares in Caesars full year impact of Crown Towers Perth, which opened in Entertainment Corporation for US$53.3 million. Crown’s December 2016. balance sheet, with a net cash position of $221 million at 30 June 2018, is well placed to fund our Australian development project pipeline. 2 Executive Chairman’s Message Despite subdued trading due to the challenging economic Our Commitment to Community conditions in Western Australia, we were pleased to have Crown’s Melbourne and Perth resorts are significant tourist maintained the level of visitation to the complex during the attractions, serving millions of visitors each year with period with approximately 10 million local and international approximately 18,000 people working towards the delivery visits in financial year 2018. of a world-class customer experience. We are grateful to Crown remains focused on continuing to identify our employees for their dedication and acknowledge our opportunities to deliver improved operating performance responsibility to create a safe and rewarding workplace. at both Crown Melbourne and Crown Perth. Similarly, we recognise our responsibility to the communities in which we operate, and are proud of the Australian Projects employee-led community partnerships and work undertaken through the Crown Resorts Foundation. Work continues on the delivery of the Crown Sydney Hotel Resort at Barangaroo, Sydney’s first six-star hotel and a Crown’s commitment to providing strong skills-based landmark building with views of some of Australia’s most training and leadership development to all employees has celebrated icons, the Sydney Harbour Bridge and Sydney again been recognised, with Crown College Perth being Opera House. named by the Tourism Council of WA as the Gold winner for Tourism Education and Training for the second year in a The Crown Sydney Hotel Resort podium is rising on the row. This is Crown’s fifth year in a row to win this category Barangaroo foreshore and the tower core structure has in the combined state tourism awards, with Crown College been constructed to Level 12. The Crown Sydney Melbourne winning in 2013, 2014 and 2015 and receiving Residences have received strong interest from both Hall of Fame status in 2015. domestic and international buyers and the project remains on schedule for completion in the first half of calendar We have maintained our focus on diversity and inclusion year 2021. through programs including the Indigenous Employment Program, CROWNability, Gender Equity, Crown Pride, the We believe that Crown Sydney will become an international Family Support Network and the Cultural and Linguistic tourism icon and will help Sydney attract high net worth Diversity Employee Network. Through our Indigenous travellers from all parts of the world. Employment Program, we have provided more than 775 In Victoria, Crown and its joint venture partner, the Indigenous employment opportunities. In addition, our Schiavello Group, were granted planning approval CROWNability program was a finalist at the National in February 2017 to construct the proposed Employment Services Association Excellence Awards for One Queensbridge project. The project would include a Innovation. new 388 room luxury six-star hotel, which would be The Crown Resorts Foundation continues to support connected to Crown Melbourne by a sculptural pedestrian effective programs which provide young Australians with bridge. The project remains subject to financing. opportunities to engage in education, the arts and culture, and continues to partner with organisations that encourage Crown Digital and foster social cohesion. In financial year 2018, in Crown’s wagering and online social gaming operations partnership with the Packer Family Foundation, support saw strong revenue growth and improved profitability was provided to more than 120 programs across Australia. during the year, with EBITDA of $26.9 million, up 81.8%. This includes CrownBet’s consolidated result from 1 July On behalf of the Board, I wish to sincerely thank you, as a 2017 to 28 February 2018 (during which Crown held a valued shareholder of Crown Resorts, for your support as 62% interest in CrownBet). we continue our strategy to maximise the performance of Crown Melbourne and Crown Perth and progress our For personal use only The current assets and investments in Crown Digital — Australian development projects. Betfair Australasia, DGN Games and Chill Gaming — are expected to provide a continued source of future growth for Crown. John Alexander Executive Chairman Crown Resorts Limited Crown Resorts Limited Annual Report 2018 3 Financial Performance The 018 full year result reflected a solid performance from our Melbourne operation and continued subdued trading in Perth. • Crown’s Australian resorts normalised EBITDA increased by 7.2%, with normalised revenue increasing by 10.6%. This was primarily driven by normalised VIP program play revenue, which increased 54.5% across Crown Melbourne and Crown Perth combined.