SYDNEY: Echo Entertainment Group Ltd chief executive John Redmond announced his retirement on Wednesday just over a year into the job, leaving the Australian casino operator to fend for itself in a turf war against Crown Resorts Ltd.
Redmond called it quits as Echo beat expectations with a slight uptick in first-half underlying net profit, and the veteran US casino executive said he was leaving the company in "much better shape" than it was when he took the helm in January last year.
But investors sent Echo shares sharply down to a record low after they had already lost 34% on Redmond's watch, compared with a 52% gain for Australian billionaire James Packer's Crown over the same period.
Echo has come off second best so far in the fight against Crown for new casino licences on Australia's eastern seaboard, as the country aims to boost its slice of the US$34 billion Asian gaming market from its current one percent.
Echo Chairman John O'Neill said in a statement that Redmond, 55, the former president and CEO of MGM Grand Resorts, had "established solid foundations" for future growth and had retired for personal reasons.
O'Neill said there had been "no disputation whatsoever between the board and John" when he was quizzed about Redmond's departure during a media briefing.
"It's not great for investor sentiment, the market will be asking why he's leaving if operations were about to turn around," he told Reuters.
Echo shares plunged as much as 8% to A$2.13 in afternoon trade, their lowest since the company's June 2011 listing.
The company earlier said underlying net profit in the six months to the end of December, excluding significant items, rose 1.3 percent to A$71.5 million ($63.60 million), slightly above five analysts' forecasts of A$65.9 million.
Net profit was A$46.1mil compared with A$66.5mil the previous year, hit by one-off expenses and a lower win rate in the VIP business.
Echo, which counts Southeast Asia's biggest gaming group Genting Bhd among its major shareholders, has come under mounting pressure since it lost a campaign last year to retain its exclusive casino licence in Sydney.
Lawmakers agreed to grant a second gaming licence to Crown, which is planning to open a high-roller facility targeting wealthy Chinese gamblers on Sydney Harbour in 2019.
The fight has now shifted north to the Queensland state capital Brisbane, a gateway for tourists to destinations like the Gold Coast and the Great Barrier Reef. Echo has the sole casino licences in Brisbane and the Gold Coast.
Crown announced plans to build a new A$1.5 billion casino, hotel and retail complex in Brisbane after the Queensland government said it would seek expressions of interest for a second casino development in the city, one of three new licences it has said it will put out to tender for the state.
Genting representatives were unavailable to comment. - Reuters