Support our sponsors:

NZX 50 Index	3326.74	0.00
S&P/ASX 200	4282.90	7.80
Dow Jones Industrials	12888.10	4.20

Twitter

Facebook

RSS

Daily ShareChat: Sky City Entertainment Group

By Jenny Ruth

Wednesday 24th February 2010

Text too small?

Sky City Entertainment Group reported a solid earnings uplift driven by growth in operating earnings at its Adelaide and Darwin casinos, both up 7%, and lower interest costs following last year's capital raising, says Marcus Curley, an analyst at Goldman Sachs JB Were.

Sky reported a 29.5% rise in net profit to $71 million and a 7.8% rise to $160.1 million in earnings before interest, tax, depreciation and amortisation (EBITDA) with earnings from its key Auckland casino flat.

The Darwin casino is benefiting from its expansion, although the initial benefits from greater machine numbers are smaller than expected, and the impact of the smoking ban from January 2 seems milder than expected.

"As EBITDA from Australian casinos diminishes in the second half, investor focus is quickly shifting on the prospects for Auckland casino," Curley says.

"While some people may find disappointment in subdued gaming at Auckland casino during the first half, we view this as simply a reflection of a weak New Zealand household consumption backdrop," he says.

"We continue to expect a cyclical recovery in NZ household consumption and gambling to emerge during calendar year 2010 driven by stimulus from lower interest rates and jobs creation."

Sky's good cost control suggests any incremental gaming revenues will drive strong earnings growth, Curley says.

BROKER CALL: Goldman Sachs JB Were rate Sky City Entertainment Group as buy.

Daily ShareChat articles report how the main experts in the market might view a certain share and we provide this commentary as a useful resource for investors. Content on this site does not in any way constitute a recommendation to buy, hold or sell any particular share. Investors should always seek professional advice before making any investment decisions.

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
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.

Printable version

Get quotes for Sky City Entertainment Group Limited (NS (SKC)

NZX Annoucements for SKC

7 Feb 2012	SSH: SKC: SSH - AMP Capital Investors (New Zealand) Limited
24 Jan 2012	SSH: SKC: SSH Notice - (AMP Capital Investors (New Zealand) Limited)
12 Jan 2012	GENERAL: SKC: SKYCITY ENTERTAIMENT GROUP 1H12 RESULT