In its 2010 Annual Result Presentation SKYCITY Entertainment Group contributed its record net profit to its effective capital management and tight control over capital expenditure. For the year ended 30 June 2010 SKYCITY today announced a 22.9% increase in net profit, before a deferred tax adjustment for buildings depreciation, to $141.7 million. Chief Executive Officer, Nigel Morrison said given the continued challenging economic environment it was a pleasing result.

SKYCITY continued to grow its share of the Auckland gaming market with machine revenues down just 2.4% compared to the 7.6% drop in pubs and clubs. Table revenues were down 6.6%, almost exclusively in the premium play market because of the challenging economic conditions. The decline in premium play was almost fully offset by the increase in international business.

Nigel Morrison said, “We’ve built on a strong half year result to deliver a record net profit. Strong competition for discretionary spend of consumers in the retail space has resulted in flat returns for our New Zealand business, with our Australian businesses delivering modest earnings growth. However as a result of prudent and effective capital management and the successful divestment of cinemas we have been able to declare a final dividend of 9.25 cents per share, fully imputed and representing approximately 70% of our NPAT which is at the upper end of our dividend range.”

Christchurch Casino experienced softening revenue and profits as a result of the challenging urban economic environment but the Waikato rural economy continued to show strength resulting in a pleasing EDITDA growth of over 7% at the Hamilton property. In Australia Adelaide had its second consecutive record result with EBITDA up 7.1%. Darwin revenue was down 1% given a softer second half as the smoking ban and the late arrival of the dry season, affecting tourist arrivals, impacted results.

International Business turnover increased 23% to $1.84 billion. Total revenue for the year was $29.5m up 53% on the prior year. Two thirds of International Business was transacted at the flagship Auckland property, with strong growth coming from China and other regions of South East Asia.

Morrison commented, “SKYCITY is developing a range of exciting strategic opportunities for growth. Key projects are planned for our Auckland, Adelaide and Darwin properties that are focused on delivering strong returns. With a very strong balance sheet we are well positioned to take advantage of these opportunities as and when they become available.”

He added, “The economic environment in New Zealand and Australia remains uncertain and this will continue to impact on gaming markets and consequently earnings. However we expect to continue to deliver improved returns as the economy recovers.” (E-08.17.10)

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