Jubilant Sky City predicts growth

By Nick Stride

Friday 30th August 2002

A record profit before abnormals and strong growth prospects propelled Sky City Entertainment's share price to new highs this week.

The June-year profit before abnormals was a record $85.1 million but a $27.9 million writedown of the company's 50.2% stake in cinema operator Force Corporation cut the bottom line to $57.2 million, down from $68 million a year ago.

Sky City has written off the whole of its $16.7 million equity investment. Accounting practice also required it to write off its pro rata share of Force's advances to its Argentinian operation, which have themselves been written off.

However, even Force contributed to profits, increasing ebitda (earnings before interest, tax, depreciation and amortisation) from $300,000 to $10.1 million.

Revenues rose across the group's activities to a total $510 million, up 17%.

Gaming revenue was up 10%, food and beverages 9%, hotel and conference 9%, Sky Tower 6%, and Sky City Adelaide 15%.

The company has a number of positives to look forward to in the current year.

The $53 million Sky Riverside casino in Hamilton opens next month and the Louis Vuitton and America's Cup racing, running over the next few months, is expected to boost revenues.

A new Auckland convention centre is under construction and is expected to open late next year. Next year Force will open a new 10-screen cinema complex at Auckland's St Lukes shopping centre.

The ugly ducklings of the company's portfolio failed to break even.

Revenue at 33%-owned Canbet, an online betting operation, rose 44% to $A410 million ($477 million).

Sky Alpine Queenstown Casino was "working hard to position itself in the Queenstown market."

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