Crown (CWN) manages a variety of gaming and entertainment facilities, including, bars, restaurants, nightclubs, cinemas and retail outlets. It also develops hotels and conference centre facilities.

The company wholly owns and operates two integrated resorts; the Crown Entertainment Complex in Melbourne and Burswood Entertainment Complex in Perth. Mr James Packer currently owns a 48.09% stake in the group.

CWN also has an interest in several different projects including:

• 33.65% interest in Melco Crown entertainment, which is based in Macau
• 50% interest in online gambling site Betfair
• 24.5% interest in Cannery Casino Resorts in the US
• 50% interest in Aspers Holdings (UK) which operates three regional casinos in Newcastle Swansea and Northampton

The company also recently increased its stake in Echo Entertainment to 10%.

Latest Results

CWN's 1HFY12 results were impressive considering the challenging consumer environment.

The company reported normalised NPAT of $211.6 million, which was an increase of 28% on the prior corresponding.

CWN's Australian casinos reported revenue growth of 10.7% to $1,387.9 million, with normalised EBITDA up 5.2% to $362.4 million.

A breakdown of the two main facilities showed that Crown Melbourne's normalised EBITDA added 3.7% to $269.4 million, whilst Burswood EBITDA gained 8.7% to $116.6 million.

The company declared an interim dividend of 18 cents, which equates to a health yield of over 4%.

CMJ and Echo Entertainment

Today it was reported that James Packer will sell his controlling stake in Consolidated Media Holdings (CMJ).

Whilst it is just a rumour, a takeover is looking like happening sooner rather than later given CWN's increased 10% stake in Echo Entertainment (EGP).

EGP's assets include Sydney's Star City and Jupiter's Hotel and Casino in Queensland; however it is Star City that would be the most appealing to CWN.

Star City is CWN's major, if not only, rival in the highly coveted VIP segment. A merger of the two companies would alleviate any pressure aggressive competition would have on the segment's margins.

Looking forward

CWN"s results speak for themselves, they were able to grow earnings in a tough consumer environment.

The reported move of James Packer selling his controlling interesting in CMJ has already sparked further takeover rumors in regards to EGP.

Mr. Packer also increased his own personal stake in CWN from 46% to 48.1%, showing his confidence in the company.

We believe that the takeover of EGP would be seen as a positive move for CWN.

As such we think CWN is a stock to watch in the coming months.

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Weekly Buy Recommendations: Crown (CWN) is a post from: Australian Stock Report Share Tips

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