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Sky City reports higher revenue, seeks director fee rise

Sky City reports higher revenue, seeks director fee rise

Sky City Entertainment Group, the casino and hotel operator, said the impact of Rugby World Cup was less than expected but it is still forecasting a rise in annual profit after reporting increased revenue in the first four months of the year.

The company expects annual normalised group net profit after tax for the year ending June 30, 2012, to be in "the $140 millions", up from $130.9m last year.

Sky City reported an 8.9 percent rise in revenue in the first four months of the financial year. This comprised a 13 percent rise in New Zealand revenue from casinos in Auckland, Hamilton, Christchurch, Queenstown and other income.

In New Zealand dollar terms revenue from the Australian business rose 1.6 percent in the first four months.

The rise in revenue in New Zealand was driven by the Rugby World Cup finals in October and a $50 million revitalisation of the Auckland property.

"Whilst the impact of Rugby World Cup was less significant than expected, our underlying business performance has been very pleasing, with the momentum seen in second half of 2011, continuing into first half of 2012," the company told shareholders.

The rugby tournament provided some boost to consumer confidence but global markets were in an uncertain state and the timing of a sustained economic recovery in New Zealand was uncertain.

"Overall we estimate that $12m of revenue growth was attributable to the Rugby World Cup, primarily earned during the finals period in Auckland from our hotels and our new outlets in Federal Street"

The Christchurch casino is fully operational after the earthquakes in the city but it is not yet back to trading 24 hours a day seven days a week.

"The physical environment around the casino is significantly impacting upon trading," the company said and 500 plus rooms in nearby hotels are no longer available.

The casino building held up very well during the various quakes and there are no issues with insurance claims relating to physical damage.

The company recently renewed insurance cover in Christchurch at a higher premium.

The company also told shareholders that the SkyCity Darwin casino licence has been successfully extended for a further five years to June 30, 2031.

Chairman Rod McGeoch told shareholders, who are being asked to increase director remuneration, that SkyCity was the best-performing gaming company in Australasia over the last 12 months as measured by total shareholders' returns and that the board worked hard.

"So, while the share price remains lower than the board would like, I am satisfied with the returns achieved," McGeoch said.


Sky City issuer page

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