Sky City reveals record interim profit

Sky City says a one-off boost from the Rugby World Cup helped drive its  half-year net profit to a record $78.8 million.

The hotel and casino operator earned $11.5 million from the tournament, lifting total revenue for the six months to December 31 to $451.3 million -- up 10% on the same time last year.

Without the tournament's boost, Sky City estimates net profit would have been $74 million – still close to $7 million higher than the same time last year ($67.1 million).

Chief executive Nigel Morrison said momentum, which started building in January 2011, has continued through the first half of the 2012 Financial Year and through into January and February 2012.

“The 2012 Financial Year has started well with the first six months revenues up $46.3 million (+10.3 %) over last year and up $41.9 million (+9.4%) on a normalised basis.

“This has continued to firm from the 8.8% revenue increase over the first four months, announced at the company’s Annual Meeting in November.

“The positive result was partly driven by the Rugby World Cup finals in New Zealand in October, which we estimate delivered around $11.5 million in revenues and $6.5 million in ebitda (earnings before interest, tax, depreciation and amortisation).” 

On a conference call Mr Morrison said while the Rugby World Cup delivered an extra $4.7 million to the casino operator’s bottom line, the company was disappointed the flow on wasn’t greater.

“The impact was less than we thought but nonetheless it was a fantastic event.”

Sky City shares slipped 4c, or 1.1%, to 3.60 following the result.

Mr Morrison added that a $50 million capital expenditure on upgrading and refurbishing gaming areas had paid off with a 15% return on investment.

Auckland gross gaming revenue rose 12% 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.

Adelaide sales rose 6.9% to $A82.6 million but Sky City Darwin sales were flat at $A63.6 million.

Sky City Hamilton revenue climbed 14% to $26.5 million.

Highlights

* Reported Net profit of $78.8m, up $11.7, (+17%)

* Group revenues $494m, up $46.3m (+10.3%)

* Flagship Auckland Revenues $268.9m, up $33.8m (+14.4%)

* Momentum continues into January and February 2012

* Earnings per Share of 13.7cps up 2 cps (+17%)

* Interim dividend of 9.0 cents per share, up 1.0 cent (+12.5%) on 1H11

* Ongoing negotiations with NZ Government on National Convention Centre

* Continuing discussions with SA Government on Adelaide re-development and expansion