SkyCity shares hit 7-week low as fire encapsulates convention centre

Tuesday 22nd October 2019

SkyCity Entertainment Group shares dropped to a seven-week low in a knee-jerk reaction to news of a major fire at the already-delayed building site for the international convention centre.

The stock fell as low as $3.82 after headlines started to emerge at 1.10pm, and was recently down 2 percent at $3.90. Shares of Fletcher Building, which is building the centre, were recently down 1.7 percent at $4.64.

Emergency services are still fighting the fire in downtown Auckland, with 20 trucks and 16 specialist and support vehicles responding to the blaze, according to the latest media update.

Grant Davies, an investment adviser at Hamilton Hindin Greene, said the fire was obviously bad news for the project, but that there was a dearth of information for investors on how to judge the impact of the fire.

"A lot of people are operating on rumour and just guessing. Is there is an argument for trading to be halted until there's more certainty? It's a grey area," Davies said

The convention centre had originally been slated to be completed in the first quarter of this year, but delays by lead contractor Fletcher Building meant the current anticipated date has been delayed to the second half of next year. The casino operator had noted about $40 million in liquidated damages when it announced its annual result while Fletcher's liability is believed to be capped.

SkyCity has previously said it was already reviewing all 2020 conference bookings. Davies said further delays would push out its ability to secure signature conventions the company had hoped to secure.

(BusinessDesk)

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