ZB

SkyCity trading 'stronger than expected'

Author
Anne Gibson, NZ Herald,
Publish Date
Tue, 14 Jun 2022, 9:51am
SkyCity has issued an earnings update today. Photo / Peter Meecham
SkyCity has issued an earnings update today. Photo / Peter Meecham

SkyCity trading 'stronger than expected'

Author
Anne Gibson, NZ Herald,
Publish Date
Tue, 14 Jun 2022, 9:51am

SkyCity Entertainment Group's trading lately has been stronger than expected and it has issued new full-year profit guidance.

The company referred to pandemic restrictions being relaxed, allowing it to open its properties again, as well as the beginning of the tourism recovery.

"Following stronger than expected recent trading and increasing certainty around its full year result, it is now in a position to provide earnings guidance for the financial year," the Auckland-headquartered company said.

"Following recent relaxation of Covid-19 operating restrictions, SkyCity has seen strong performance from its local gaming businesses, particularly in New Zealand," it said.

Its non-gaming businesses continued to recover, benefiting from positive domestic tourism, particularly during weekend and holiday periods, and the reopening of international borders.

"Subject to there being no material changes to SkyCity's current operating settings before June 30, 2022, SkyCity expects group normalised EBITDA of between $135m and $140m and group normalised net profit after tax of between $3.5m and $7m," it said.

Due to the uncertainty around the potential accounting adjustments required as part of the FY22 result process, SkyCity is unable to provide guidance for reported or statutory results at this time.

The result is due out on August 25.

Today's announcement follows chief executive Michael Ahearne telling the Herald on June 7 how trade has returned here and in Australia.

The boss heralded a new phase after pandemic shutdowns since March 2020.

Ahearne was upbeat about how the business had recovered in the second half of its June 30, 2022, financial year.

Guests and customers were returning to hotel, gaming, restaurant and bar properties in New Zealand and Australia, he said.

"We're now in a new phase where people are coming back, borders are opening up, tourists are travelling and the second half of the year has definitely been better than the first," Ahearne said.

He was comparing this second half to the first half when SkyCity was hit by Auckland's 107-day lockdown from last winter to spring.

Then, the company lost around $1 million/day revenue for every 24 hours its Auckland properties were forced to remain shut.

On August 3, the company's landmark SkyTower will turn 25 and celebrations are planned for that - including perhaps the launch of a new tourism activity but executives are remaining tight-lipped about that.

Auckland produces the bulk of the revenue out of the four areas where SkyCity operates.

Shares are up trading around $2.79, giving a market cap of $2.1b. At the end of last month, the company was only trading around $2.62.