REDMOND TO DEPART ECHO
Written on the 5 February 2014
JOHN Redmond (pictured) will retire as CEO of Echo Entertainment (ASX:EGP), to be replaced by chief financial officer Matt Bekier.
It comes as the company announced a 30.5 per cent drop in first half statutory profit to $46.1 million, blamed on increased wins by high-rolling gamblers and new regulatory costs.
Normalised net profit after tax for the first half was up 1.3 per cent to $71.5m.
Redmond is expected to leave the company in after a three-month transition period. He tendered his resignation for personal reasons after a year in the job and will return to his home in the United States with his wife Carla.
“There can never be a perfect or ideal departure, I do strongly feel that a three month transition provides a good window for all involved, given how closely matt and I have worked together over the last year and considering Matt’s skills and experience,” says Redmond in a statement this morning.
The leadership transition comes at a critical time for the company, as it spruiks its plans for a $1 billion new Brisbane casino, while attempting to fight off James Packer’s Crown Limited as it makes a play to enter the city.
EGP already lost its Sydney monopoly this year when Crown’s plans for a casino at Barangaroo were given the green light by the New South Wales state government.
Gross revenue was down 7.3 per cent to $901.3 million, but EGP did make headway on its cost-cutting measures, reducing operating expenditure 4.5 per cent to $425.3 million, a saving of $10.1 million on the previous year.
It also recently sold Jupiters Townsville to Colonial Leisure Group for $70 million.
Chairman John O’Neill says Redmond has established “strong foundations for profitable future growth” by delivering the first stage of the company’s plans for South East Queensland.
Bekier joined Tabcorp Holdings in 2005 as CFO, where he worked on the demerger and establishment of Echo in 2011. O’Neill says Bekier knows the company and the Australian market well and has been working closely with John in re-establishing a path towards profitable growth.
“The board is confident that Matt is the right person to lead the group forward on the foundations that have been built, and looks forward to the continuity that Matt’s appointment will provide,” says O’Neill.
“This year is about fully implementing improved operational programs now developed across our properties building on the early momentum we have seen this calendar year and preparing for our Queensland investment program,” says Bekier.
The company will look for another non-executive director with international casino experience, the search for a new CFO has commenced and significant progress has been made in the search for a new managing director of the Star.
EGP is trading down 0.86 per cent at $2.300. It has been a difficult year for the company on the stock market, having plunged from a high of $3.780 in April.