SkyCity Entertainment is looking forward to the Rugby World
Cup. Photo: NZ Herald.
Transtasman casino operator SkyCity Entertainment
yesterday released a confusing set of accounts for the year
ended June, brought on by the need to comply with international
financial reporting standards.
SkyCity used terms like underlying record profit, normalised
profit, reported net profit and normalised revenue, where
normalised was taken to meet an adjustment to the profit for
Accountants told the Otago Daily Times that changes to the
depreciation rules had also added confusion to the way
financial accounts were presented. Since financial reporting
rules had moved away from cost-based to fair value, the
accounts were not as useful as they once were.
The media release said the group reported a record underlying
net profit after tax of $130.9 million for the year, up $5
million, or 4%, on the $125.9 million normalised profit for
Normalised earnings per share increased by 3.7% to 22.7 cents
Reported net profit after tax was $123 million, up 20.5%.
This was after a write-down of the Christchurch Casino
investment by $15 million after the Canterbury earthquakes.
Normalised revenue was up 4.5%.
Normalised earnings before interest, tax, depreciation and
amortisation (ebitda) of $290.9 million.
A final dividend of 8 cps was declared, taking the full-year
dividend to 16 cps.
SkyCity chief executive Nigel Morrison described the 2011
results as a solid platform for further growth.
"This is an improving result, with good momentum, especially
considering the mixed economic conditions that prevailed
across New Zealand and Australia during the year."
With a stronger Auckland economy and a more optimistic
consumer outlook, the Auckland gaming machines were showing
an encouraging return to levels not seen since 2008, he said.
The international business was up 50% and Adelaide had
delivered its third record year of growth in a tough market.
With the Rugby World Cup less than a month away, the Auckland
flagship property was in great shape.
"We are excited and optimistic about the future," Mr Morrison
Craigs Investment Partners broker Chris Timms said SkyCity
had a strong balance sheet and relatively low debt.
The company's net debt was lower than forecast and it
appeared strong cash flow had allowed SkyCity to pay down
more debt than expected.
The operating revenue had been driven by Auckland and was
ahead of forecast, but the company had given no guidance.
Comments from Mr Morrison indicated that SkyCity was banking
on good returns from the Rugby World Cup while conditions
remained challenging in Australia.
Asked if tough financial times meant lower revenue, Mr Timms
said that would generally be the case. However, with SkyCity,
people still liked to go out for entertainment, even in tight
SkyCity had spent time and money attracting the Asian
high-rollers. Any fall in tourist numbers from Asia could
affect revenue, he said.