Crown recovery drives Packer to $505m profit

In Business Resources, Featured Home Page News, Gambling, National Headlines
James Packer

The recovery in the share price of Crown Resorts has driven a $505 million net profit for James Packer’s private wealth vehicle.

 

The Tourism News Related Stories

Related Gambling: Hearings into Star Casino’s ability to counter organised crime

Related Business Resources: Australian’s working upto 8 weeks upaid WFH

from AFR 1.12.21

A recovery in the share price of casino operator Crown Resorts has driven a $505 million net profit for James Packer’s private wealth vehicle.

Consolidated Press Holdings (CPH), which houses Mr Packer’s 37 per cent holding in Crown as well as various properties and other investments, also recorded a near forty-fold increase in revenues to $636 million, in FY21 accounts lodged with the corporate regulator on Tuesday evening.

Nearly $480 million of that revenue was attributed to “fair value gains on financial assets”, driven overwhelmingly by the recovery in Crown’s share price since March. That was when US private equity giant Blackstone lobbed the first of three takeover offers for the beleaguered business, which narrowly avoided having its NSW casino licence torn up in October.

At the close of FY20, a year in which Packer’s private vehicle suffered a $402 million net loss, Crown’s ASX-listed shares were trading around $9.60. By the time the FY21 accounts were being signed off, the shares were up 24 per cent to $11.91.

CPH paid Mr Packer a $111.5 million divided in FY21, down from $127 million the year prior. That was still an impressive result given Crown Resorts did not declare any dividends last financial year, ending a decade-long run which had seen the mogul entitled to about $150 million in annual dividend income from his major asset.

Apart from the revaluation of the Crown shares, the other major item on Crown’s revenue line was “management fees” of $151 million, up from just $1.5 million in FY20.

It is understood these are not related to payments from third parties but from wholly owned CPH subsidiaries. It is unclear exactly what they relate to, but it is known that Mr Packer is placing increasing focus on technology investments.

He was previously a backer of Will Vicars’ Caledonia Private Investments, but his interest in that concentrated tech stockpicker went to sister Gretel in a 2016 estate settlement.

The Square Peg venture capital funds of Paul Bassat, whom Packer first backed in the 1990s with job ads disrupter Seek, are now understood to be his main outlet for new economy plays.

Investments through Square Peg’s funds and co-investments in the likes of Uber and Israeli gig marketplace Fiverr are thought to be increasingly material next to the Crown stake, which Mr Packer has pledged to sell down below 5 per cent in the next five years.

While Mr Packer resigned most of his directorships in 2019 as he battled mental health problems, he remains a director of CPH’s ultimate parent, the Bahamas-domiciled Consolidated Press International Holdings.

The $2.7 billion Crown Resorts stake dominates CPH’s net asset base, which rose from $3.9 billion to $4.4 billion in FY21.

But it also houses a grab-bag of other assets, including a one-third share in the South Sydney Rabbitohs rugby league team, a 40 per cent stake in The Upside, the yoga pants business of first wife, Jodhi Meares, luxury properties in Mexico and Brown Resorts’ Barangaroo complex, and interests in peer-to-peer lender SocietyOne.

You may also read!

Campbelltown Council, scraps the Gums Reserve dirt bike track

Campbelltown Council has backflipped on their support for a track to be built at The Gums Reserve, after agreeing

Read More...
Qantas

Qantas to use green fuels

Qantas will use greener aviation fuels on its flights from London to lower its carbon emissions. The fuel is four

Read More...

Australia’s best selling beers revealed

The results from 2021 beer sales in-store have shown a seismic shift in Australia’s beer market since 2016, as

Read More...

Mobile Sliding Menu