Australia's Echo Entertainment shares jump on positive revenue update
SYDNEY, April 11
SYDNEY, April 11 (Reuters) - Shares in Echo Entertainment Group Ltd jumped more than 10 percent to their highest level in a month after the company said stronger gaming revenue had boosted third-quarter earnings and named Matt Bekier as its new chief executive.
In a trading update Echo said normalised gross revenue grew by 5.7 percent in the March quarter compared with the previous corresponding period, on the back of higher gaming revenue at its casinos in Sydney and Queensland state.
Echo shares leapt 12.45 percent to A$2.71 by 0142 GMT and are 9.4 percent higher for the year, well ahead of the 1.5 percent rise on the S&P/ASX 200 so far in 2014.
"The cost optimisation programme and improved profit focus has continued to support improved earnings growth in the third quarter of the financial year," the company said.
Previous chief executive John Redmond retired in February after just over a year in the job, sending the Brisbane-based company's shares to a record low as it struggles against stiff competition from Crown Resorts Ltd.
Echo has come off second best so far in a fight against Crown for new casino licences on Australia's eastern seaboard, losing its monopoly in Sydney and facing a similar prospect in Queensland state capital Brisbane.
The company's share price plunged 34 percent on Redmond's watch, compared with a 52 percent gain for Australian billionaire James Packer's Crown over the same period.
"They've given the market an indication of where profit will come in and I think that's really what the market was looking for, some sort of reassurance around earnings," Peter Esho, chief market analyst at Invast Securities, said.
Bekier previously filled the roles of chief financial officer and executive director at Echo and has been with the company since it was carved out of Tabcorp Holdings Ltd in 2011.
His elevation to chief executive was flagged in February.
(Reporting by Thuy Ong; Editing by Stephen Coates)