Undeterred in reporting a lacklustre full-year result
yesterday, casino operator SkyCity has launched expansive plans
for a new 12-storey, 300-bed hotel, with a string of
hospitality and boutique outlets, in Auckland's CBD.
Reported revenue was down 4.8% to $821.4 million and
after-tax profit slumped 22.6% to $98.5 million for its
trading year to June.
The new hotel is part of the controversial agreement with the
Government to pay for construction of the $500 million-plus
New Zealand International Convention Centre.
The casino operator took hits from several directions during
the year, including a $9.9 million loss in Australian foreign
exchange, $A4.1 million ($NZ4.5 million) in Adelaide
redevelopment disruption and a waning win rate - from what
was a record International Business turnover of $6.5 billion
- which, in theory, should have reaped $88 million but came
in at $63.2 million.
SkyCity chief executive Nigel Morrison said the five-star
hotel with its 570 car parks, restaurants, boutique shopping
and linking air bridge would be built on land it owns in the
Nelson and Hobson Sts block.
''This new 300-bed hotel is a major New Zealand tourism
project and will complement other hotels being built in
downtown Auckland,'' he said.
''Taken together, these developments are a major vote of
confidence in Auckland's future as a vibrant, evolving city
of international standing.''
Estimated to cost $170 million to $180 million, the hotel
would bring SkyCity's total beds and car parks in its
precinct to almost 1000 and 1350 respectively.
SkyCity shares were initially up 2.8% at $3.65 following the
Forsyth Barr broker Haley Van Leeuwen said the result was
''very close'' to the brokerage's forecast.
''As expected, the result was impacted by soft economic
conditions in Australia, translating Australian dollar
earnings at a strong New Zealand dollar, and disruption
during the redevelopment of the Adelaide casino,'' she said.
The second-half performance was more pleasing at several
properties, Auckland in particular, and this momentum had
continued into early 2015 trading, which was encouraging.
Craigs Investment Partners broker Peter McIntyre said the
result was ''disappointing and lacklustre'', largely because
of the foreign exchange losses and low win rate from
''The only real positive was a solid performance from
For the current financial year to August 10, SkyCity said
revenues were up 4% and the International Business win rate
was back to its theoretical gains.
While SkyCity Auckland's revenue had started the new year up
9%, the company did not expect that to continue.
Mr McIntyre said: ''With the capital expenditure envelope
expanding and performance remaining subdued, some attention
is turning to funding.''
Net debt was $659 million, with $330 million of undrawn
Capital expenditure during the next six years was about $807
million, for the Auckland conference centre and entire
redevelopment of the Adelaide casino.