If
anyone needed any convincing that James Packer has inherited a cash cow
at PBL which is essentially a gaming business with magazines, TV and
some new businesses tacked on, then the interim result provides the
final confirmation. Casinos
powered PBL to an after tax profit of $387 million, as the
contribution from the Nine Network fell. Cash
flow was $442 million for the half and PBL trimmed its debt by $210 million to
$1.5 billion.

It’s a company with cash coming out of its ears despite the continuing
problems at Nine, which is still the second most profitable part of the
business for all its many problems. Casinos contributed $265 million on
a “normalised” basis ($295 million, up 60% on an “actual” basis) to
group earnings before interest, tax, depreciation and amortisation.
With total EBITDA of $537 million, casinos at Crown and Burswood are
now contributing more than half PBL’s earnings, with the contribution
from half of Betfair and any Asian expansion to come over the next
couple of years.

The
Nine Network saw EBITDA fall 13% to just over $148 million, on a 4.6%
fall in revenues. Nine’s share of advertising on the East Coast (where its Brisbane, Sydney and
Melbourne
stations are located) fell to 37% from 38.5% a year earlier.

More
interesting was the way the magazine business, which has been run by CEO John
Alexander, has run out of puff and couldn’t move past Nine as the major media
earner. Magazines EBITDA rose 6.5% to
$134 million on a 9% rise in revenues, a sign the solid growth has come to an
end. Total costs were up 11%, including the launch cost of new
titles. Excluding those, costs rose 5%. Circulation revenues
rose 8% as sales gains were mixed and hit by fickle consumer demand. Ad revenues
jumped a very solid 12%, but overall ACP could not grow profits faster than
revenues.

Interim
dividend is up to 30c a share (27c), making a total payout of $202 million.
James Packer’s interests are entitled to around $76 million of
that.