Rating changes, courtesy of Bloomberg
- Aurizon: Aurizon Reinstated Underweight at JPMorgan; price target of $3.10. Last traded at $3.39.
ASX 200 events include Ramsay Health Care investor briefing, day two, and Crown Resorts investor briefing at Crown Sydney
Crown Resorts is flagging additional corporate costs of $130 million in 2021 as it wades through a subdued reopening of its businesses following statewide lockdowns in its three key local markets.
The briefing showed Crown’s rebound had been clipped by hospitality staff shortages and a still subdued Melbourne CBD midweek.
The extra costs will including extra legal, consulting and other costs associated with regulations and three royal commissions. However, it also has a new $150 million debt facility from a domestic industry superannuation fund and has had it rating watch removed by S&P and Fitch. Crown has total debts of $1.3 billion and maintains low credit ratings of BBB and Baa3 (negative outlook).
Betfair and digital gaming revenue was also down 12 per cent, in part a representation of the strong performances of those businesses in 2020.
In Sydney, Crown said it’s hotel offering had been well received. Crown is yet to open its gaming floor at the Barangaroo casino as it works through restrictions with the NSW regulators.
“Occupancy has progressively improved since reopening, averaging about 40 per cent since mid-November with higher occupancy on weekends and average room rates around twice the competitor set in the Sydney market,” the company said in its presentation.
Crown shares closed at $11.45 on Friday. They have been as low at $8.61 and as high as $13.15 over the past year.
Crown Resorts will spend an extra $150 million this year on legal costs, consultants, and meeting regulatory hurdles. Credit:Jason South
The casino operator provides a brief update on its performance in the first five months of full-year 2021 ahead of its investor briefing today.
It has a new chairman, Ziggy Switkowski, a new board, and new chief executive, Steve McCann, and management team. It noted this new leadership team will drive “tone from the top” and a comprehensive culture transformation program is being implemented with new values and purpose.
It noted the gaming areas of the new Sydney Casino were ready for opening “pending a determination of suitability by Independent Liquor and Gaming Authority” and hopes to have the gaming floor open early in the new year.
Crown also provided a brief update on its performance in the first five months of full-year 2021 ahead of its investor briefing today.
In regards to its Melbourne business, Crown said its main floor gaming revenue was around 75 per cent of pre-COVID levels over the two weeks ending 5 December, 2021.
Non-gaming revenue was around 65 per cent of Crown’s pre-COVID levels over the same two-week period.
Crown said weekend visitation had been encouraging.
“However mid-week performance continues to reflect subdued activity in the CBD and reduced foot traffic,” it said.
In Perth, main floor gaming revenue was down 8 per cent in full-year 2021 compared to a year earlier. Hospitality takings at its Burswood casino was up 31 per cent this year compared to full-year 2020.
Private hospital giant Ramsay Health Care will enter the UK mental health care market with a planned $1.4 billion acquisition of services provider Elysium.
Ramsay announced the deal ahead of an investor strategy update on Monday, with chief executive Craig McNally explaining the buy would provide an ”excellent opportunity for Ramsay to expand its successful health care services platform in the UK”.
The company has been working hard to gain a stronger foothold in Britain’s private hospitals market this year.
It surprised investors back in May with a $1.8 billion offer for hospital operator Spire, but that deal ultimately fell over after key Spire investors insisted the offer undervalued the company.
Elysium employs 6,000 staff across the UK and operates a range of mental healthcare hospitals and services.
It is owned by private equity firm BC Partners and Ramsay intends to buy 100 per cent of the company on an enterprise valuation of £775 million ($1.4 billion).
“The mental health market is a growth market with favourable demographics including increasing awareness and improving diagnostics. There is strong strategic alignment with Ramsay’s leading positions in mental health care in Australia, France, Sweden and the Nordics,” the company told investors.
Ramsay’s UK operations generated $606.5 million in 2021, a 21 per cent drop on the year prior.
This was largely due to the additional waves of the COVID-19 pandemic, with Ramsay treating public patients for the virus through agreements with the NHS.
The company has long been focused on expanding its reach across the UK. It currently holds 8 per cent of the region’s private hospitals market.
Shares closed down 0.75 per cent on Friday to $69.50.
- ASXSPI 200 futures +0.2% to 7366
- On Friday, S&P 500 +1%, Dow +0.6%, Nasdaq up 0.7%
- AUD -0.04% to US71.68 cents
- Bitcoin 2% to $50,402.61
- Ether +1.7% to $4,159.60
- Iron ore -0.5% to $US108.03 per tonne
- Gold +0.4% to $US1,782/oz
- WTI Crude oil +1% to $US71.67/barrel
Hello,
And welcome to another week of Markets Live.
Your editor today is Lucy Battersby, while Colin takes a well-deserved break.
Local business confidence numbers come out this morning and at 6pm tonight the UK’s latest unemployment data is released. But most traders will be waiting for Thursday, 6am local time, for the outcome of the latest US Federal Reserve meeting.
This blog is not intended as financial advice.
ASX futures up 0.2%: Ramsay Health makes $1.4bn acquisition
Source: Philippines Alive
