Today SKYCITY Entertainment announced a Net Profit after tax of NZ$71 million (US$50.2 million) for the half year ended 31 December 2009, up 29.6% on the same period in 2008. Contributing significantly to this result was the reduction in net interest cost, down by NZ$11.1 million (29%), to NZ$27.0 million from $38.1 million, following the NZ$177 million buybacks of US Private Placement debt in July and August 2009, from the proceeds raised from the share placement in April 2009, as had been previously announced.

Chief Executive Officer, Nigel Morrison said: “This was a pleasing result in what is still a challenging economic environment. While earnings of our New Zealand businesses were flat, our Australian businesses delivered 7% earnings growth. It was pleasing that we were able to deliver earnings per share growth for shareholders after our equity raising last year and that we have been able to declare an interim dividend of 8 cents per share, fully imputed, representing approximately 65% of our NPAT for this half.”

The CEO added, “The economic environment in New Zealand remains challenging with increasing unemployment, a further contraction in pub and club gaming by 5% compared to the same period last year, together with the first full period of PIDs (player information displays) implementation on all gaming machines in New Zealand. As a result, our Auckland revenues were flat against 1H09 with gaming revenues down marginally, (albeit with continued market share growth in gaming machine revenues) offset by modest growth in non-gaming revenues.”

Revenue from the Christchurch, Hamilton and Queenstown properties rose marginally, with earnings steady. In Australia the company saw continued growth. The Adelaide Casino had revenue growth of 5.3%, across all sectors of the business. Following its refurbishment, revenue growth at Darwin Casino was 6.4% over the period. These figures were achieved in an environment of ‘fiscal fade’ with the fiscal stimulus of the 2009 financial year no longer present, softening retail activity, and a softening of pub and club gaming revenues across Australia.

The company believes that they will be faced with a continuing challenging environment in both New Zealand and Australia. In New Zealand unemployment has risen above 7% and continued contraction of gaming machine revenue in pubs and clubs is expected although business should remain relatively resilient. The stated objective of the SKYCITY Group is double digit NPAT growth in FY10. “We confirm we are on track to deliver this objective and advise our current expectation for Normalised NPAT is in the range of 10%-15% up on last year’s NZ$115.3 million, excluding the gain on the cinemas divestment.” said Mr Morrison.
(E-02.16.10)

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