Echo expects lower earnings
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Casino operator Echo Entertainment Group expects a drop in its full year earnings due to weak consumer sentiment.
The update came as rival casino operator Crown, controlled by James Packer, increased its stake in Echo to 10 per cent, and announced its intention to take an even greater ownership stake.
Crown says it has bought another 68.8 million Echo shares in a $256.6 million deal, and has written to the NSW Casino, Liquor and Gaming Control Authority and the Queensland Attorney General seeking permission to take an even larger stake.
Echo on Friday said it expected to report earnings of between $270 million and $315 million for the year to June 30, which would be down from $347 million in the previous financial year.
"Trading conditions have remained difficult in (the second half of financial year 2012) with revenues negatively affected by soft consumer sentiment," Echo said in a statement.
The forecast was provided as the company announced a sale of new shares to raise up to $454 million to pay down debt and strengthen its balance sheet.
Echo will offer one new share for every five held by existing shareholders, at a price of $3.30 per new share.