Hong Kong-listed International Entertainment Corporation (IEC) has touted diversification of its business through new gaming and sports related opportunities as the way forward after announcing losses of HK$67.3 million for the year ended 31 March 2018.
The loss represents a 61.0% increase on the company’s 2017 losses of HK$41.8 million and comes despite a 2.0% increase in revenue for the period to HK$296.4 million. Gross profit was also up 3.9% to HK$225.1 million.
IEC currently earns the bulk of its revenue via the leasing of properties in the Philippines to local gaming regulator PAGCOR, with monthly rental income determined on an agreed percentage of net gaming revenue generated from gaming areas. In the 12 months to 31 March, IEC generated revenue from the leasing of properties of HK$188 million, up 2.3% year-on-year and representing 63.4% of the group’s total revenue. The company also generated revenue of HK$108.3 million from the hotel operation of New World Manila Bay Hotel and Casino in downtown Metro Manila.
However, since being acquired by Brighten Path Ltd last year – a company controlled by Hong Kong businessman and well-known high stakes poker pro Stanley Choi – IEC has made significant efforts to broaden its interests.
Most notable is the planned acquisition of Wigan Athletic Holdings Limited, which runs English Championship side Wigan Athletic Football Club and its home ground, DW Stadium.
IEC has also signed a cooperation agreement with The Stars Group, owner of the world’s dominant online poker site PokerStars, that saw it gain exclusive rights to operate PokerStars-branded poker rooms and run live PokerStars events in a number of Asian countries including Macau, Vietnam, South Korea, Singapore, Malaysia, Myanmar, Japan and Cambodia.
In its 2018 results announcement, IEC said that it will “actively diversify its business portfolio whilst making efforts to expand its current business.
“The group believes that the deployment of expanding its entertainment and sports related businesses will broaden its source of income and create synergies among the group’s businesses.”
IEC’s expansion plans include looking for further opportunities in the Philippines with the company stating it will “continue to focus on its existing business operations and investments in the Philippines riding on the business environment to strive for exploring potential business opportunities. The company plans to renovate its properties as well as facilities for travelers by creating a more seamless travel experience to establish their loyalty as well as expand the customer base.”
In Wigan, IEC “will also acquire three properties, such as a disused restaurant adjacent to the DW Stadium, sports academy facility and sports training ground.
“The group will firstly invest and develop the football performance operation at academy and first team level and will look to develop further the football performance model around elite performance and academy development to support the first team club operation.
“On the football business side, the group will implement a business plan around increasing match day and non-match day revenues through development of sponsorship, hospitality, retail, ticketing and fan engagement strategies to increase overall turnover.”