Yes, pretty sad. Will it fall further??? Deutsche Bank has a...

Yes, pretty sad. Will it fall further??? Deutsche Bank has a HOLD with a target of $3.00, citing the sale of the Townsville casino was a positive and the $70m was above their expectation. What happens to the sp will depend on a number of things - Brisbane decision and (a long shot) Genting's holding - either one of these could see the sp rise or fall - so hang onto your shorts :)


Chips are down for Bekier's run at Echo

Tim Boreham |
The Australian |
February 05, 2014 1:43PM

IF THE cards fall the right way for him, "CEO designate" Matt Bekier will be luckier than the whales who are winning more on the casino operator's tables than the immutable law of averages eventually allows.

The Echo (EGP, $2.30) head numbers man and former Tabcorp CFO is taking over from John Redmond, who is returning to the US for personal reasons having presided over a joyous 13 months (if trench combat with the Packers can be described as such).

For once, "personal reasons" appears to mean just that and there are no sinister circumstances.

Echo's reported earnings this morning were nothing to get excited about, mirroring the soft trading update at November's AGM.

The big "but" is that trading at all its properties - notably Sydney's Star and Jupiter's on the Gold Coast - perked up in January, helped by VIP bookings relating to the earlier than usual Chinese New Year.

"It was a tale of two quarters with the second part starting to see the traction of a lot of the programs we have put in place,'' Redmond says.

Echo's official reported earnings slumped 30 per cent to $46.1 million, but Redmond says the more pertinent number is "like-for-like, normalised" ebitda, which climbed 11 per cent to $221.7m.

This adjusts for the impact of the high-rollers winning more than they should (theoretically), new levies in NSW and Queensland not imposed in the previous period and "normalised" VIP rebate commissions.

Still, soft revenues across the venues are cause for concern, prompting one analyst to query why VIP visitations are down while the Macau money bins are doing well in this business.

In part, a couple of valued patrons dropped in the previous corresponding half, but not this time around. "These folk can show up at any time,'' Redmond says.

While management's brighter tidings on trading carry more caveats than an ageing enterpreneur's prenup, Echo does seem to be recovering from last year's shock of losing its Sydney exclusivity to the Packers.

Criterion last rated Echo as a buy at $2.32 on December 18 last year. We'll retain the call in the hope that Bekier picks up $2.5m - the value of his short and long-term incentives - and that the VIPs resume losing their silk shirts.

http://www.theaustralian.com.au/business/opinion/chips-are-down-for-bekiers-run-at-echo/story-e6frg9lo-1226818624383#