SkyCity optimistic over growth, plans

Peter McIntyre.
Peter McIntyre.
SkyCity Entertainment Group has made a good start to the new financial year with figures released yesterday showing momentum gained in the second half of 2014 had continued.

Overall revenue for the casino group grew 5.9% in the three months ended September on actual currency and rose 7.5% on a constant-currency basis.

Chief executive Nigel Morrison told the annual meeting Auckland revenue was up 9.1% excluding international business, or 12.4% including it.

There was strong international business performance with record group turnover for the quarter of $2.3 billion, representing growth of about 56% and with an international business win rate above theoretical for the quarter, he said.

Craigs Investment Partners broker Peter McIntyre said SkyCity had been concerned about the absence of high-rollers in its business but indicated to the market yesterday those high-rollers had returned.

''This result is pretty positive for the market and investors.''

The figures provided to shareholders showed total New Zealand revenue was up 10.1% to $158.8 million in the quarter compared with the previous corresponding period.

Total Australian revenue was up 3.5% to $95.4 million.

Adelaide's revenues continued to contract but at a lesser rate with September 2014 revenue now back at September 2013 levels, Mr Morrison said.

Darwin's revenue for the quarter was ''effectively flat'' but better expense and marketing subsidy management provided earnings growth of 9.3%.

''While general economic conditions have been buoyant in Auckland, conditions in Hamilton, South Australia and, to a lesser extent Darwin, have been more challenging.''

The problems associated with currency were diminishing and the impact of the disruption at Adelaide was reducing, he said.

Chairman Chris Moller discussed the company's three key developments which were set to underpin medium-term growth.

The were: The New Zealand International Convention Centre; the transformation of the Adelaide Casino into a world-class integrated entertainment complex; and the construction of an additional 300-bed hotel to complement the convention centre development.

The convention centre plan also included additional car parking, new retail space, further restaurants, an air bridge over Hobson St to the main site and laneway access.

Resource consents were expected to be applied for by the end of the year, he said.

In Adelaide, the proposed new six-star boutique hotel, VIP gaming and signature restaurants would deliver an integrated entertainment complex. The anticipated completion date was at the end of 2018.

''These developments in Adelaide and Auckland are intergenerational changes. They will underpin our strategic growth over the next decade.''

Mr McIntyre said the company made much of its dividend policy during the year.

Total dividends paid were $116 million which, at the current share price, was a dividend yield of about 7%.

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