SkyCity Entertainment plans to bring more of its high-rollers to Queenstown. Photo by Gerard O'Brien.
Queenstown is set to get a boost from high-rolling casino
clients following a swap in ownership between listed Auckland
company SkyCity Entertainment Group and Queenstown-based
Skyline has bought SkyCity's 50% share of the Christchurch
casino for $80 million and Sky City has bought Skyline's 40%
share in Queenstown Casino.
SkyCity chief executive Nigel Morrison said the purchase of
the remaining shares in Queenstown Casino was an exciting
''This enables SkyCity to build our international and VIP
business in a major tourism destination, which is already a
very popular destination for our overseas VIP guests.''
Increasingly, the VIP customers in Auckland wanted to visit
Queenstown because of its high international profile, he
The VIP guests generated much needed export dollars for New
Zealand and would bring extra economic activity to the
Queenstown region and the country as a whole.
However, the current offering at Queenstown Casino was
limited and the venue had been unable to live up to the
experience international customers had enjoyed in Auckland.
''The purchase today gives SkyCity the chance to focus on
providing an exceptional experience in Queenstown.''
SkyCity had always preferred to be the outright owner of the
properties in which it was involved. Skyline expressed an
interest in acquiring SkyCity's 5% stake in Christchurch,
which fitted the Auckland company's strategy, Mr Morrison
The Christchurch casino contributed $5.6 million to SkyCity's
2012 earnings, 9.7% lower than a year earlier as it struggled
with post-earthquake operating environment. In contrast,
Queenstown's revenue climbed 12% to $8.6 million and
contributed earnings of $1.5 million to SkyCity on rising
numbers of Asian visitors.
Skyline chairman Ken Matthews said the purchase of the
remaining shares in Christchurch Casino would be funded
through its bank.
''While the prevailing difficulties in Christchurch have been
outlined previously to shareholders, your directors consider
there is an upside consistent with the rebuild of the former
inner city, in particular.''
Directors had full confidence that in time, the region would
regain its former status, he said.
The purchase was consistent with the company's philosophy of
investing in strategic assets in key locations.
The outright purchase of Christchurch Casino was a
significant acquisition for Skyline which had held an equity
interest right from its inception in 1994, Mr Matthews said.
''Skyline is very fortunate to have had continuous board
representation from that date and it is important to record
that no management changes are contemplated as a result of
this outright purchase.''
Craigs Investment Partners broker Peter McIntyre said
Queenstown was New Zealand's ''hot tourism market'' and it
made sense for SkyCity to take over the Queenstown Casino so
it could push more of its high-rollers south.
Increased flights from Auckland had helped boost tourism
numbers and Auckland International Airport's stake in
Queenstown Airport had helped further lift the town's profile
Craigs rated SkyCity as a ''hold'' and viewed the proposed
redevelopment of the Adelaide casino and associated
regulatory and tax changes to be net positive for the
company, Mr McIntyre said.
SkyCity last traded at $3.79. Craigs had a 12-month target of