Burswood’s hopes of reviving its earnings before its takeover restrictions are removed next year have hit a setback, with the Perth casino operator revealing a $2.8million loss for the September quarter.
Burswood managing director John Schaap said on Friday the unaudited loss was due to a low win rate of 0.6per cent on the casino’s volatile international commission business.
In contrast, Mr Schaap said Burswood’s expected ICB win rate of 1.35per cent would have produced an after-tax profit of $2.8million.
The announcement saw Burswood shares trade as low as 76¢ before recovering to close 2¢ weaker at 79¢. The pressure on Burswood’s share price comes at a sensitive time when the company is assessing its capital raising options to pay a $67million balance owing on its five-star hotel.
Burswood will benefit from lower ICB tax rates from December 24, when the Perth casino’s flat 15per cent tax rate is changed to a three-tiered structure under legislative changes backed by the West Australian Government.
The tax rate Burswood pays on its ICB trade will fall to 13per cent on December 24, and to 11per cent by December 2006.
Those legislative changes will also scrap the 10per cent shareholding cap for Togel investors who meet probity checks.
The share ownership restrictions won’t be removed until September 2003, when the company hopes the benefits of its recent $96million casino and resort upgrade will be flowing through to earnings.
When outlining the legislative changes to State Parliament last month, West Australian Racing and Gaming Minister Nick Griffiths said the cap would stay until after Burswood’s 2003 results were announced “so that any potential buyer of shares would be required to pay fair market value”.
Mr Schaap said Burswood hoped to reduce costs and improve margins across the business to achieve a full-year result similar to the $20.6million profit in fiscal 2002.
India Looks at Casino Proposal
HARYANA, India – As reported by the Haryana Tribune News: “The Haryana Cabinet will take up the issue of having casinos in the state at its meeting on October 16. Official sources said this was decided at a meeting held here today, which was presided over by the Chief Minister, Mr Om Prakash Chautala, and attended by officials of the Tourism Department and the Haryana State Industrial Development Corporation (HSIDC).
“`A comprehensive memorandum regarding having casinos in the state and the functioning of the casinos will be put up before the Cabinet for approval on October 16’, the sources said.
“They added that it was decided to have a five-member committee comprising the Tourism, Excise and Taxation, Finance, Town and Country Planning and Home secretaries, which would examine and approve the licences of private operators interested in running casinos in Haryana.
“…The state would be considered open for setting up casinos, provided the licencing authority was satisfied with the credentials and the technical competence of the interested parties.
“…The Chief Minister also held a meeting with the Finance Secretary today, in which the tax structure of casinos, formulated by the Excise and Taxation Department, was believed to have been examined.
“On September 28, the HSIDC and Vista Star Leisure Limited of the UK had signed an MoU for setting up a hotel project, including a casino, in the state. The sources said that the MoU was signed by Mr Harbaksh Singh on behalf of the HSIDC and Mr Manjit Sandhu, a representative of the London-based company…”