Casion operator SkyCity Entertainment has delivered a ''flat
and disappointing'' result, as expected, with revenues and
after-tax profit down 5.4% and 7.9% respectively.
Overall revenue dropped from $444.5 million to $423.5 million
and after-tax profit fell from $66.3 million to $61.1
Aside from losing about $2.4 million because of the high New
Zealand dollar, overall revenue from international business
was down 8% because of the timing of visits ''from a small
number of large players'', the company said.
With its $402 million commitment to an Auckland conference
centre, in partnership with the Government, and $A350 million
($NZ379 million) Adelaide site development under way, capital
expenditure over the next two to three years will be closely
scrutinised by investors, Craigs Investment Partners broker
Peter McIntyre said.
Flying under the radar, but crucial to Adelaide's
redevelopment, the South Australian government on Tuesday
confirmed it would be developing a 1400-space car park near
the Adelaide casino, with 1000 parks for exclusive SkyCity
Mr McIntyre said the announcement gave SkyCity more certainty
on its Adelaide redevelopment, parking being such a critical
part of the equation.
On the half-year result, he said, ''Overall, it was was a
flat and disappointing result, but it had been well flagged
by the company in December.''
SkyCity shares were unchanged at $3.60, following the
Forsyth Barr broker Suzanne Kinnaird the result was ''broadly
in line'' with expectations. Darwin was ''a bit
disappointing'' and the soft Adelaide result not as bad as
''Most properties were slightly softer than our forecasts,
with total earnings before interest, tax, depreciation and
amortisation of $150 million, versus forecast of $155
million,'' she saidShe noted small ''one-off'' gains, which,
in aggregate, boosted reported numbers by $5 million and
lowered the quality of the result.
January trading had started ''very strongly'' and New Zealand
revenues were up 14.5%, driven by Auckland, and Australian
revenues up 7.5%, Ms Kinnaird said.
Mr McIntyre said SkyCity had not given a lot of financial
guidance yesterday, as many components of its outlook ''would
not yet be visible'' to management, but he expected guidance
updates at the full-year report.
''There should be increased earnings in the future, from
2017, but in the meantime it will be challenging for SkyCity
to line up all its ducks in a row,'' Mr McIntyre said.
SkyCity repeated last year's 10c per share dividend, in line
with its guidance to deliver a minimum 20c for the full year.
SkyCity said Queenstown, which had an almost 58% revenue gain
to $7.1 million, benefited from additional international
business in January. Revenue in January was up from $700,000
a year ago to $1.2 million.
SkyCity Entertainment casino revenues
Auckland: Down 2.2% to $258 million.
Hamilton: Down 10.1% to $24.9 million.
Queenstown: Up 57.8% to $7.1 million.
Adelaide: Up 1.1% to $A83.4 million.
Darwin: Up 1.1% to $A72.9 million.
- Christchurch casino sold in December for $80 million.