Casino operator Echo Entertainment's full year profit has plunged more than 80 per cent but says business is starting to pick up.
Echo, which operates The Star casino in Sydney, saw its net profit drop to $42.2 million for the year to June 30, from $226 million in 2010/11.
Revenue rose by just 0.2 per cent to $1.6 billion.
Echo today said its earnings had been hit by a raft of significant items, lower win rates in its VIP business, slower growth at The Star and soft consumer sentiment.
Earnings at The Star, which was hit by controversy earlier in the year with an inquiry into allegations of harassment of senior staff, dropped by more than 50 per cent.
Chief executive Larry Mullin described the 2012 financial year as a transitional one, with the second half particularly challenging for The Star.
He said revenue momentum had begun to improve, with growth to be driven by new products and expansions in 2012/13.
"Operating margins will also improve as the business completes its launch phase and the benefits of the cost optimisation program launched in the second half of 2012 come through," he said.
Mr Mullin said the group's Queensland casinos, which had flat revenues in 2012, were expected to trade in line with general market conditions, with earnings to benefit from cost cuts.
Echo declared a partly franked interim dividend of four cents a share.
Echo said the statutory profit figure was not comparable to the prior year's figure because, at that time, Echo was part of gambling group Tabcorp Holdings.
Echo demerged from Tabcorp in June 2011.
Echo said the redevelopment of The Star was substantially complete, and the company was now looking towards maximising the potential of the Sydney casino and refurbishing its casinos in Queensland.
Echo chairman John O'Neill said Echo was now focused on maximising the revenue from The Star.
"With the significant capacity and product improvements made at The Star, the business is well-positioned to drive earnings that are more consistent with the potential of our valuable licence," Mr O'Neill said.Shares in Echo were four cents higher at $4.22 at 8.18am.
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