Sharechat Logo

SkyCity first-half profit jumps 17%

Wednesday 15th February 2012

Text too small?

SkyCity Entertainment Group first-half profit jumped 17% to a record on improved earnings from its flagship Auckland casino and hotel complex, which benefitted from the Rugby World Cup and a turnaround in gaming revenue.

Profit rose to $78.8 million, or 13.7 cents a share, from $67.1 million, or 11.7 cents, a year earlier, the Auckland-based company said in a statement. Sales rose 10.3 percent to $494 million.

The company said the momentum of the first six months continued into January and February, giving it the confidence to forecast ‘normalised’ full-year profit at the top end of its guidance, in “the high $140 millions.” SkyCity spent $50 million revamping its Auckland operations, including new VIP gaming facilities.

The biggest improvement in Auckland came from slot machines, where revenue jumped about 17 percent, while non-gaming revenue from hotel, restaurants, the Sky Tower, conventions and parking, rose about 23 percent.

The improved results were “mainly due to strong fundamentals in our Auckland gaming business,” said chief executive Nigel Morrison. That momentum “has continued through the first half of the 2012 financial year and through in January and February.”

Shares of SkyCity traded yesterday at $3.64 and have gained about 7 percent in the past 12 months. The stock is rated ‘outperform’ based on a Reuters poll of 11 analysts. The company will pay a first-half dividend of 9 cents, up from 8 cents a year ago and beating the 8.5 cents payment forecast by Forsyth Barr.

SkyCity said talks are continuing with the government over the construction of a National Convention centre, which if concluded would see the company invest $350 million in the project. In return it wants an early renewal of its Auckland casino .licence beyond 2021, an increase in gaming and changes to gaming regulations.

“Discussions have been progressing proactively” since the National government t was returned in last year’s elections, it said.

The Rugby World Cup provided a one-time revenue boost of $11.5 million and added $4.7 million to profit, the company said, adding that the impact “was less significant than expected.”

In Auckland, gross gaming revenue rose 12 percent to 197 million and non-gaming revenue climbed to $71.9 million from $58.5 million. Slot machines generated $117.9 million in sales, up from $101 million.

The company’s Adelaide casino lifted sales by 6.9 percent to A$82.6 million, with gains of above 8 percent for both slot machines and local gaming tables, while food and beverage sales fell by 1.1 percent to A$8.9 million.

SkyCity Darwin revenue growth was just 0.2 percent to A$63.6 million. At SkyCity Hamilton, revenue climbed 14 percent to $26.5 million.


NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SkyCity's Queenstown growth ambitions face test with convention centre decision tomorrow
SkyCity buys TVNZ land for $10.6 mln, broadcaster to put cash into upgrading main building
SkyCity shares fall as results show struggle to squeeze growth out of Auckland
SkyCity FY profit falls 8 percent on flat Auckland result, one-off 2012 benefits
FMA recorded Allen's role in SkyCity talks as potential conflict of interest
South Australia approves ‘game changing’ SkyCity casino licence, allowing A$300M investment
Government roped in FMA chair Simon Allen to help close SkyCity deal, papers show
SkyCity cleared to buy Queenstown's Wharf Casino
NZ govt, SkyCity take another 5 days on $402M convention deal
NZ government, SkyCity extend deadline for deal on $402M convention centre