SkyCity says on track to meet earnings guidance

Friday 10th December 2010

SkyCity Entertainment Group said it is on track to meet earnings guidance it provided at its annual meeting in October and personal income tax cuts seem to be having an impact on its casino business.

The comments were made in a prepared briefing for an open day for investors today.

At the annual meeting the company said it would be disappointed if it did not achieve an consensus of a normalised net profit after tax for the 2011 financial year of $127.4 million.

The casino operator reported a record $129.1m normalised net profit after tax in the 2010 financial year.

It has since said first-quarter normalised net profit after tax was up 3.7% on last year.

The presentation said that Auckland gaming machine revenues, after a softer start of the 2011 financial year, were starting to gain traction with revenues up 5% for three months ended November compared to the same period last year.

The company said that the overall picture for the wider New Zealand economy remained subdued but signs for SkyCity were more encouraging.

Auckland revenues for the first five months of the 2011 year were up marginally on last year. Gaming machine revenues for September and November were up 5% on last year.

"Personal tax cuts appear to be having an impact on visitation and spend," the company said.

Trading on local VIP tables was described as soft but was expected to recover as the economy recovered.

"Rugby World Cup in September and October 2011 will be a significant event for New Zealand and will generate additional revenues for SkyCity Auckland and our Hamilton, Christchurch and Queenstown properties in the first half of the 2012 financial year," the company said.

NZPA

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