Chairman Barry Thomas was confident the company could continue to perform and produce the excellent results of the past three years, but profit margins were under pressure.
For the year to March, Skyline's before-tax profit was $21.7 million, compared with $18.6 million the previous year, which was itself up 16% on the $16 million reported in the previous corresponding period.
"While the business has performed well, we are generally battling increasing costs, particularly in labour, all overheads, food and liquor," he said in a statement yesterday.
Although costs were heavy, Skyline was continuing with upgrading programmes, at present concentrating on a major refurbishment of the Queenstown Skyline Restaurant.
"This [increasing costs] puts pressure on our profit margins and, with a slight downturn in tourism numbers, we need to work hard to maintain our strong profitability," Mr Thomas said.
Skyline's after-tax profit for the year was $16.2 million, compared with $14 million the previous year.
Mr Thomas said last year's 25c dividend would rise 3c to 28c - a total of $9.5 million in dividends compared with last year's $8.5 million.
The Skyline gondola properties in Queenstown and Rotorua were the main contributors to overall profitability while the group's outstanding performer was the Sentosa Skyride and Luge in Singapore, which almost doubled its after-tax profit.
Mr Thomas said the Dunedin Casino had "traded consistently" and was now paying dividends, and the profitability of the 15-year-old Christchurch Casino was "slightly ahead" of the previous year, but "reasonably major repairs and renovations" were required in the next two to three years.
The Sky City Queenstown Casino was "gradually improving in performance".
Construction is also due to begin towards the end of the year in Queenstown, following a fire which destroyed a commercial building on the corner of Rees and Beach Sts, promoting the demolition of the existing arcade.
"Our other properties around Queenstown have performed well with good rentals and some increases," he said.
The Blue Peaks Lodge and Mercure Leisure improved occupancy and equalled or exceeded the previous year's profitability.
