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Skycity Entertainment Group reported a full year profit up 12.9 per cent to $120.1 million today, but the result left investors unimpressed.
In the hours after the announcement the company's share price fell more than 4 per cent, at one time taking it down 23c to $5.14.
Managing director Evan Davies said the share price fall was probably a result of some misapprehension about the results for the company's Auckland business, the "principal driver within the group overall".
He did not share that view and considered Auckland to be performing well and was confident in the way it was moving forward.
The casino operator reported group operating revenue in the year to June up 11.8 per cent to $757.9 million.
Earnings before interest, tax, depreciation and amortisation (ebitda) rose 5.6 per cent to $294.5m, while earnings before interest and tax (ebit) were up 4.3 per cent to $229.5m. Earnings per share were up 11.8 per cent to 28.5cps.
Skycity Auckland operating revenues rose 7.9 per cent to $427.5m, but increased expenses reduced the ebitda gain to 0.5 per cent taking it to $194.3m.
AdvertisementAdvertisementHigher depreciation and amortisation resulted in a 2.9 per cent decline in ebit to $154.6m.
Gaming machine revenues rose 1.9 per cent to $194.5m, gaming tables were up 9.6 per cent to $140.3m, food and beverage up 11.3 per cent to $37.4m, and hotel and convention up 44.3 per cent to $43.3m.
Higher corporate expenses came partly from increased regulatory and host responsibility costs.
Second half gaming revenues appeared to have been affected by higher petrol prices and interest rates, and by lower international programme play.
In its result, Skycity said a year of consolidation of the group's core business was expected in the 2007 financial year, based on existing assets and development capital expenditure.
Skycity Auckland and Skycity Hamilton were expected to consolidate trends. Adelaide was expected to continue to increase revenues and market share, although smoking bans would have an impact in the 2008 financial year.
In the year to June revenues from Adelaide were up 21.4 per cent to $A131.2m ($NZ157.4m), with gaming up 18.1 per cent to $A114.4m, ebitda up 53 per cent to $A27.3m and ebit up 94 per cent to $A17.1m.
In Darwin, total revenues rose 9.9 per cent to $A89m, with ebitda up 6.7 per cent to $A33.6m and ebit up 16.7 per cent to $A28m.
Hamilton, revenues were up 14 per cent to $34.9m, ebitda up 15 per cent to $17.4m, and ebit up 20 per cent to $13.1m.
Skycity Leisure, which owns cinemas, had revenues steady at $37.7m but ebitda and ebit down $2m and $2.3m respectively due to increases in the overall cost base.
The performance of Skycity Queenstown was lower than expected, hurt by a poor ski season, lower international tourist numbers, and reduced visits from international player groups.
Revenues were down $1.8m which led through to reduced ebitda and ebit by $1.6m.
Mr Davies said that in the past decade Skycity had grown from a single construction site in Auckland to now have $1.7 billion in assets spanning casinos, hotel and conference accommodation, tourism and cinema complexes.
The result showed New Zealand operations had largely recovered from the impacts of the smoking ban implemented in December 2004, he said.
He would not comment on whether any takeover approaches had been made to Skycity.
"It would always be disappointing to see it move out of New Zealand control, but my attitude to these things is if somebody believes the business is worth more than the business' shareholders believe it's worth, then they'll buy it."
Planned major capital works include a major $40m renovation of the Auckland main gaming floor in the 2007 and 2008 financial year, and an estimated $A55m on redevelopment in Adelaide between 2007 and 2009.
Spending of $A35m to $A40m was being considered for Skycity Darwin.
A final dividend of 14c per share will be paid, bring the total distribution for the year to 26cps. As previously announced the distribution will be in the form of non-taxable bonus shares.
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