Publishing & Broadcasting (PBL) Share Trading Update

Uncertainty surrounding the opening date of Publishing & Broadcasting (PBL)'s Crown Macau casino has been observed by the Macquarie Research Equities (MRE) analysts. The analyst s are now confident that the opening date pegged for next month is unlikely. However, late second quarter (calendar 2007) remains a possibility. With PBL shares down 15% since December, the question arises – are the shares representing good value at these levels, and what impact will the delays to the opening date have on PBL's bottom line? With regard to the timing of the Crown Macau opening, the Melco/PBL SEC filing for the US IPO indicated the following: "Crown Macau Hotel Casino targeted to open in the second quarter of 2007 and the City of Dreams integrated casino complex, phase one is targeted to open in late 2008".

It is worth noting that this timeline took into consideration recent changes and improvements in the design of the Crown Macau project. The construction contract (for Crown Macau), with Paul Y Construction, listed the revised date of practical completion to be on or before April 2007. The practical completion date remains subject to permitted extensions (including further contract variations etc) otherwise Melco/PBL is entitled to liquidated damages (circa US$45k per day). Separately, monthly gaming statistics (January 2007) released by the Macau Gaming Inspection and Coordination Bureau confirm strong growth in gaming spend, with gaming receipts up an impressive 71.4% vs pcp. Likewise visitation for the month was up 22.7% vs pcp. The strength of visitation to Macau in January (up 22.7%) confirms a very solid start to the year considering “Golden Week” (which commenced 19 February 2007) saw visitation up 17.8% on pcp. Visitors (in January 2007) from Mainland China represented 56.6% of total visitors, up from 55.8% in the previous January. Hong Kong visitors increased by 14.2% on pcp and represent 29.6% of total visitors to the region. Growth in gaming receipts is the more impressive statistic, up 71.4% on pcp, the highest monthly growth rate recorded in the last 12 months.

Ultimately, the analyst expects that the practical completion date will not be met by several weeks, but to-date MRE have no basis on which to assess who will ultimately bear the responsibility of this. Regardless, they consider delays of this magnitude for Crown Macau to be inconsequential, particularly in light of the strength of the gaming spend in Macau noted above.

Publishing & Broadcasting Limited is listed on the Australian Stock Exchange (ASX) under stock code PBL. You can view their investor website here. PBL was listed on the ASX on 4 June, 1987. James Packer is the Executive Chairman and the managing director is John Alexander. Publishing and Broadcasting (PBL) is involved in gaming and entertainment; television production and broadcasting; magazine publishing and distribution; investments in the internet, pay television; telecommunication and other media and entertainment sectors. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade PBL. Check your charts and good luck with your share trading!