Echo profit falls and CEO quits

Action at Echo’s flagship The Star casino in Sydney was “soft” due to “subdued” discretionary consumer spending and a hot streak by VIP gamblers. The Star’s revenue fell 6.5% year-on-year while earnings fell 4.3% to $134.6m. Echo’s Queensland casinos suffered from the same negatives, with revenue down 8.7% and earnings down 15.5%. 

Echo’s overall VIP gaming revenue was down 20.5%, with amounts staked down 3.5% and win rate falling 0.13 points to 1.56% (normalized VIP win rate traditionally runs in the 2.7% to 3% range). Echo says all is not lost, because VIP action has experienced “a strong start” in January. Electronic gaming machine revenue is also faring well in 2014, “particularly in Queensland.” 

Redmond and his wife will be returning to the United States after a three-month transition period to make sure Bekier has things under control. Echo chairman John O’Neill expressed confidence that Bekier, a veteran of the days when Echo was still part of bookies Tabcorp, was “the right person to lead the group forward.” 

Redmond had only assumed Echo’s helm a year ago, but it was a tumultuous 12 months that saw Echo shares shed over a third of their value. The year saw Echo lose its Sydney monopoly to archrival Crown Resorts, which is now threatening to end Echo’s monopoly in Queensland as well. Echo is hoping the money it made by selling off its Townsville casino will give it sufficient ammo with which to protect its Brisbane casino from James Packer’s assaults.