Despite weaker Auckland trading conditions and losses from VIP/commission play, SKYCITY Entertainment Group yesterday reported a NZD45 million interim net profit for the six months to December 2006. This was 23% down on first-half profit although revenues rose 8.5% to NZD419.2 million (US$293 million) with gaming contributing 72%.

SKYCITY Managing Director Evan Davies said, “In the past ten years, we have become a diversified trans-Tasman company with $1.7 billion in strategic assets. This is a strong, established business. By investing in the customer experience we have acquired market leadership, market reach and market brand. Our focus is now on ensuring we deliver profitable growth by driving revenues, minimising costs and maximising margins.”

SKYCITY Auckland revenues declined with the major impact coming from significantly reduced revenues from international commission play. Evan Davies commented, “Our priority now is to reinvigorate our gaming customer experience. Our main Auckland gaming floor upgrade - the first in a decade - is critical to re-engaging our customer’s sense of gaming excitement and fun. We are enhancing customer service programmes and introducing a programme to help customers make choices that best match the entertainment experience they seek. We must unlock the value growth in the business, while maintaining strict capital management and cost control.”

In Australia SKYCITY operations delivered sound results. SKYCITY Adelaide saw revenue growth of 7.5% and SKYCITY Darwin was up 6.7%. In New Zealand SKYCITY Hamilton delivered strong revenue growth of 19%; whilst SKYCITY Queenstown and Christchurch Casino both performed in line with expectations. For the future the Group is intent on maximising business growth. “The Auckland result has been disappointing and we will be focusing particular effort in the remainder of the 2007 financial year on regenerating gaming revenues and tight management of costs in order to rebuild gaming gross margin performance,” Evan Davies said. “Across our other business activities, we will concentrate on consolidating and building value from the strong positions we’ve established, to ensure we maximise the potential of our recent capital investment programmes.” (E-03.01.07)

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