Skycity reveals record net profit

Skycity has opened the books on a record net profit this morning and says momentum at its casino and hotel businesses is strong on the eve of the Rugby World Cup.

Underlying net profit for the casino and hotel operator rose 4% to 130.9 million for the year to June 30, on revenue of $877 million (up 4.5%).

But stripping out the $15 million write-down of the 50%-owned Christchurch Casino - affected by the Canterbury earthquakes - reported net profit rose $20.9 million or 20.5% to $123 million.

Results from the Auckland business were particularly strong - rising $7.4 million to $435.2 million.

Auckland gaming machine revenues had returned to levels not seen since before the global financial crisis at $206.2 million, and the momentum was continuing, with revenue from Auckland gaming machines rising  15% in the first six weeks of the new financial year.

Earnings from Australian casinos rose 50% to $2.76 billion and the Adelaide casino, which is being redeveloped and expanded delivered a third consecutive year of record growth. 

Skycity chief executive Nigel Morrison said the result was a solid platform for growth.

“This is an improving result, with good momentum, especially considering the mixed economic conditions that prevailed across New Zealand and Australia during the year.

"With a stronger Auckland economy and a more optimistic consumer outlook, our Auckland gaming machines are showing an encouraging return to levels not seen since 2008," said Mr Morrison.

“With Rugby World Cup upon us in less than a month and our Auckland flagship property in great shape, we are excited and optimistic about the future.”

Capital expenditure in Auckland was expected to continue to deliver results, said Mr Morrison. This included new international and VIP gaming facilities, luxury accommodation and new signature restaurants and bars on Federal St.

Skycity is also the preferred developer of the proposed New Zealand International Convention Centre, estimated to cost $350 million to build.

Mr Morrison said the company's balance sheet was strong and provided a solid foundation for growth.

"And with committed but undrawn banking facilities of $400 million we have significant financial flexibility," he said.

Shares in Skycity were unchanged at $3.51 this morning.