SkyCity remains on track for 'modest growth' in full-year earnings

SkyCity Entertainment Group said revenue in the first four months of the financial year lifted 1.7 percent and it remains on track for "modest growth" in full-year earnings.

New Zealand's only listed casino company said group normalised revenue rose 1.7 percent in the four months ended Oct. 31 compared with the same period a year earlier, helped by a 3.1 percent gain from its New Zealand business. Based on the year-to-date performance, SkyCity remains on track to achieve modest growth in group earnings before interest, tax, depreciation and amortisation in the 2018 financial year, the Auckland-based company said in presentation notes for delivery at a UBS Investor Conference in Sydney today.

SkyCity, which has four casinos in New Zealand and two in Australia, said its New Zealand properties were "performing well", particularly its largest business in Auckland where it said successful marketing and promotional initiatives had helped counter the impact of disruption in the CBD. In Hamilton, its operation continued to benefit from a strong macroeconomic environment in the Waikato region, but growth rates had moderated slightly due to stronger comparable periods, it said.

In Australia, SkyCity said it was benefiting from improved gaming activity at its Adelaide casino following implementation of new gaming concessions which was helping to offset the impact of construction disruption from early works ahead of its expansion. In Darwin, the impact of increased competitive pressures is stabilising but the trading environment "remains soft overall", it said.

SkyCity said momentum is building in its international business with particularly strong activity levels over the Golden Week holiday period in October. However turnover was slightly weaker on the previous period, which largely pre-dated the disruption caused by the arrest of staff employed by its Australian rival, Crown Resorts, by the Chinese government.

The company's shares last traded at $3.93, unchanged since the start of the year. The stock is rated a 'hold' based on the average recommendation of eight analysts compiled by Reuters.

(BusinessDesk)