Resorts World helps parent group return to profit
The first full year of trading at the £150m Resorts World Birmingham complex has given a significant revenue boost to parent group, Genting UK.
The performance of the multi-use facility is one of the reasons why the main group has returned to profit after a difficult 2015.
Full year results for 2016 show Genting overturning a £36.7m loss in 2015 and converting it into a surplus of £20m.
Genting is one of the largest casino operators in the UK with 44 casinos – four of which comprise its High End division, with the remainder forming the Core segment.
Resorts World Birmingham (RWB), which comprises the Genting International Casino, Genting Hotel, Santai Spa and Gym, 11-screen cinema, the Vox conference centre and a number of shops, restaurants and bars in the wider mall complex, is a separate entity.
Group revenue on continuing operations for the year ended December 31, 2016 was £319.7m (2015: £228.2m). In 2016, revenue increased by 232% over the prior year in the High End division and by 7% in the Core division.
RWB completed its first full year of trading generating revenues of £24.9m (2015: £3.3m). Gross profit before exceptional items for the group was £26m, an increase of £78m over the prior period.
Revenues at the Core casinos was £211.1m (2015: £196m).
The pre-tax profit and exceptional items on continuing operations for the year was £18.2m (2015: loss of £60.6m) before exceptional income of £11.2m (2015: £4.8m). The profit for the year has resulted in an increase in the group’s net assets from £308.6m at year-end 2015 to £326.3m at the end of 2016.
“The significant improvement in performance in comparison with the prior year is due predominantly to the volatility of the High End division. The group suffered a poor performance in this division in 2015, with revenue of £24m, increasing to £79.6m in 2016 as a result of strategic changes made by the directors to mitigate risk,” said director Peter Brooks.
The company has a vested interest in improving performance, largely due to the £175m loan Genting UK has from Genting International Investments. The loan comprises Facilities A (£150m) and B (£25m). Facility A is fully repayable by the end of 2017. The first of two 10% instalments was repaid at December 31, 2016, with a second payment due at the end of this month. Facility B is fully repayable by the end of December 2018. Interest on the loan is 3% per annum.
Mr Brooks said the focus of the group over the coming year included strengthening the position of its Core business segment and improving business efficiency.
The group will also focus on growing business volumes at RWB and will continue to monitor its marketing strategies in the High End segment.
